Kingsview CIO Scott Martin On Fox News Weather Command 12.7.23
AMY FREEZE: You look at trends in weather and you compare them to financial trends and you definitely can coincide the two El Nino trends show up in money charts. Basically across the US You start to look at weather patterns and what happens with our money and a new study reveals very strong economic repercussions. Maybe there could be some opportunity here, but definitely it does affect the financial situation for the worst. Historically, when you look at this, I mean El Nino can threaten to slow down global economics. They say as much as 3 trillion when you shift to the El Nino season. Well, let’s get the expert in here. Our friend, the fan of the Weather Fox business analyst, Scott Martin here,
SCOTT MARTIN: The biggest fan of Fox weather. I’ve been on TV freezer for about 15 years. This is the most nervous I’ve ever been in the whole history of time I’ve been on tv, so my goodness,
FREEZE: That’s because we’re going to have you make it rain.
MARTIN: Yes, let’s do it.
FREEZE: I know we can’t save the world, but we can actually look at how weather impacts money, maybe make the wallet a little fatter, at least protect you. The good news here is that El Nino could save us money.
MARTIN: It could potentially, because El Nino winters are typically a little bit warmer and drier. So we all go out and think, I mean, I’m out shopping on Fifth Avenue last night in Madison Avenue and so forth, and these prices for the coats and everything and all the winter on sale. Well, they’re out of control still because it’s still that belief that, hey, winter’s going to come back. We’re going to make up for last year. But now what we’re starting to see in El Nino years, as you know freezer, is that the prices of those things will go down because demand falls because it’s not as cold, it’s not as snowy, and therefore you’re going to see apparel prices and things like that come down. I think over January and February
FREEZE: For sure. Don’t buy your coat just yet,
MARTIN: Even though it’s fashionable to do so. I know there’s some really cute coats out there. Canada Goose has one. There’s a couple Michael Coors coats that look really great out there. No, I’m not buying that one for you, my daughter and my son. But the reality is those prices will come down because demand’s going to fall.
FREEZE: Okay. That’s something good to think about. Wait for the sale. I like that. What are two reasons that El Nino could actually cost you more money? Yes,
MARTIN: Because typically in El Nino years, we’ve seen in say the eighties and nineties when there’s been El Nino years, wages have actually gone down in the future, say going forward from say El Nino year, we’ve had wages pull back. You mentioned some of the numbers three to 5% over the next several years beyond an El Nino year, and that’s typically because demand falls. So as wages come down, it’s typically service revenue comes down and demand falls, and therefore there’s not as much to pay our workers. So something to keep in mind is we have in El Nino years, we talked about what happens to the economy going forward and how it’s maybe negative sometimes
FREEZE: Because the businesses get a little bit repressed and so that’s passed on.
MARTIN: That’s true. And commodity prices typically go up too. So you look at orange juices, things are my favorite cocoa chocolate and things like that. I saw that.
FREEZE: I saw story because the El Nino powders globally change and affects the farmers who produce
MARTIN: Cocoa big time. Less supply means higher prices for those commodities. Therefore, these businesses have less money to pay their workers and therefore wages go down. It’s kind of like the iguanas when the weather’s a little bit warmer and drier. I eat a lot more and I spend a lot more on food.
FREEZE: Yeah, yeah. It’s crazy. I iguanas fall. They fall from the tree, so they kind of get it as well. Smart financial decisions can be made though during an LO season. Give us some tips here that we can make good decisions.
MARTIN: So I like the commodity space. We talked about some of the cocoa, the sugar and things like that, orange juice. There’ s ways Freeze that we, in fact, as a money manager, I do a money management gig on the side when I’m not watching the weather, when I’m not watching Fox News and Fox Business and doing the shows, there’s actually commodity funds nowadays that we’ve been putting our clients into that benefit from El Nino years because as the commodity prices go up, because we talked about less supply, there’s actually funds that go up in value as those funds appreciate because of the fact that commodity prices are higher.
FREEZE: I love that idea because it’s all about asking the right questions. I know that it can happen, like with corn, say corn’s going to be good or bad. You can make investments that soybeans
MARTIN: Too. Yes, wheat of.
FREEZE: But I think also too, you can take that further. If someone’s going to have a bad season with a particular type of crop, you could say, well, what might they plant instead? How they might handle if there’s going to be some sort of infestation, what money you might invest for, how they solve those problems
MARTIN: And Well, I love it because you know this well from where we met the genesis of our relationship in Chicago. That’s right. The home of commodity trading, the Chicago Mercantile Exchange and so forth. So you can go to those exchanges and make those trades, or you can buy some of these commodity funds, like I said, that benefit from where say commodity prices are going and you can trade those too. So it’s not like you have to buy into the thing for the whole winter, the whole spring, the whole summer. You can trade ’em around to see how you’re doing with regards to what commodity price you’re doing because they do have an effect because of El Nino.
FREEZE: We’re getting you your honorable mention in the Fox weather team because you have made it rain officially.
MARTIN: Well rain and I want to bring out the sun next time. If we can do that, maybe we’ll see.
FREEZE: I’m talking about rain and money.,
MARTIN: I know. Always Always money
FREEZE: Financial Analyst. Scott Martin, thanks so much for being with us. We appreciate you making the connection and joining the conversation here on Fox Weather. Have a great weekend. See you. You too. All right. Good to see you.