Kingsview CIO Scott Martin on Fox News Business Cavuto Coast to Coast 2.16.23 (Part 1)
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Program: Cavuto Coast to Coast
Station: Fox Business News
NEIL CAVUTO: And when it comes to markets, so does this next gentleman, Scott Martin of Kingsview Asset Management. You know, Scott, I was looking at the markets well off their lows, still down about 200 points. This wholesale inflation report was like the bump in the road that no one saw coming. It was a lot stronger than people thought. Running at a month over month clip of 7/10 of a percent annualized. We’re talking about a 6% annualized rate versus the roughly 5.4% expected. So we’re worried all over again. Are you?
SCOTT MARTIN: Not too much. You mentioned the reaction’s been somewhat positive off the negative initial reaction, Neal. And I think CPI this week also did the same thing where the market’s just a couple of months ago, Man with CPI and PPI acting like this, a couple of months ago, the markets would have sold off a lot heavier. So I think the market is getting used to maybe this higher inflation regime and also the Federal Reserve hiking rates a couple of more times, which I think is in the market already. And therefore, after that, if the CPI and PPI calmed down, as I expect them to do, I think the Fed has done and therefore the market’s looking forward to that period.
CAVUTO: You know, we’re learning a little bit more about Cleveland Fed President Loretta Mester certainly sounded very hawkish in comments after this wholesale inflation report came out. She apparently really she would have preferred the Fed being more aggressive at the last meeting a couple of weeks ago. That was the meeting where they raise rates a quarter point. She would have preferred a half a point, and that we’ve got to be very vigilant about this. Paraphrasing her, that’s a voting member who is more or less saying, don’t expect me to soften on this inflation fight. What did you think?
MARTIN: A lot of jawboning out there from the Fed governors. You mentioned she’s a voting member, so that’s important. But, gosh, Neal, these days, I think the market already knows the Fed is on its path. It knows what the Fed wants to do. And I think with a lot of these folks at the Federal Reserve, besides maybe Jay Powell, they should just keep their mouths shut because the market is already prepared for the Fed to raise rates a couple more times, as I said. And there’s no need to come out on a day like today where we did have a little hotter than expected PPI and jammed the markets with talk of another 50 basis point rate hike. So for me, I think they can get the job done with maybe a little less talk and just a little less action too, than maybe the market wants them to have.
CAVUTO: All right. We still have a, you know, a ten year note that was teasing 3.9% earlier this morning. Now into the low 3/8. Last time I checked, that’s getting really close to 4%. What do you make of it?
MARTIN: Well, we’ve been there before, so the markets are kind of used to that. And things looked like they were going to run away and they didn’t. The ten year sunk all the way down to three in about .2.3. So this range bound effectively, Neil, I think we’re seeing this range of the high threes where the rate seems to want to settle in until we get some more, say, stringent PPI and CPI numbers, which I don’t think are out there. So I think you can count on the rate kind of hanging around this level and mortgage rates hanging around the level they’re at now six or so percent, which doesn’t feel good. But compared to where they were back in the 1970s when I was buying houses, by the way, the 6% feels pretty good.
CAVUTO: Did I ever tell you what my wife and I paid for? Och, I did. 10,000 times. All right. Don’t wander too far, Scott. I want to pick your brain a little bit on something new Jersey’s doing. I know you’re out in Illinois, but it scares me. I’ll get into that later in the show.