Kingsview CIO Scott Martin on Fox News Business Cavuto Coast to Coast 12.21.22
Program: Cavuto Coast to Coast
Station: Fox News Channel
NEIL CAVUTO: All right. Another day, another potential rally going on here. The Dow up 471 points. What’s interesting, we have not a seismic shift in thinking on Wall Street, but a more openness to strong economic numbers, strong earnings numbers, because recession got to be the really big worry over the last couple of days. More focus on signs that we’re not going into a recession or that it’s less likely. For example, the markets are digesting just fine. Consumer confidence at an eight month high and better than expected numbers were getting certainly out of the likes of FedEx. That’s a bit of a weird one here because overall revenues, the volume of its packages are actually down from last year, but it’s making more money per package. Of course, Wall Street likes that and the stock is up and that’s leading this charge that maybe we’re we’re through the worst of it. And then, of course, Nike out with far better than expected numbers that its inventories have drastically shrunk and the company even said we believe a lot of those inventory problems are behind us. That was fairly unequivocal and the unequivocal response is to buy. So what to make of that and whether this shift means, look, we’re worried about interest rates hiking. But Scott Martin of Kingsview Asset Management, we’re more worried about the economy tanking. That’s that’s gotten to be a shift, hasn’t it?
SCOTT MARTIN: Yes. Tanking because of interest rate policy, too, Neal. I think that’s really the worry is that the Fed’s going to go too far with this hiking policy, as we’ve talked all fall. I think the Fed needs to just chill out here. I think they need to let some of the interest rate hikes go through the system already. Neil, let them take effect. Let them have their effect on the economy, see how the data sorts itself out and then come back to the table if they need to. But chairman powell seems determinant on throwing more hikes into the system. So therefore i think the market is rightfully worried at times.
CAVUTO: So you’re going to be damned if you do, damned if you don’t, because the better the earnings news looks or when companies start saying, you know, we think we’re over the worst of it, or consumers seem to think that
we could be through the worst of it. The Fed doesn’t like that kind of talk, right? It doesn’t like those kind of developments.
MARTIN: It doesn’t seem to. It seems like the Fed wants to put the kibosh on those things, which I agree with the housing market and some of the other debt markets that were super hot just at this time last year. The Fed did need to cool them. But I think you have to consider not over cooling things to the point where you put them into a recession, depression and so forth. So it’s a delicate, delicate balance. Easy for me to say, but something that the Fed has to very much keep in mind as they go forward into the next couple of hiking cycles here, because the market, if you look at interest rates, as we put those up on the screen, Neil, the market is telling the Fed, look, you’re probably closer to done than you are to start and therefore it’s probably time to start thinking about ending this thing than, say, keeping it going.
CAVUTO: By the way, I’m the one who says we’re going to put the interest rates up on the screen there. The interest rates up on us.
MARTIN: Oh, see that? I try to take over there.
CAVUTO: Yeah, I try to act like a jerk if I can. Sometimes it’s throw myself out. It’s not even an act. You know, one other thing I just had to ask you. I wonder if we kind of hit an inflection point. I don’t want to make a huge deal of it, but I wanted to pick your brain on this, Scott. If you look at Amazon and Disney for a while, like two days ago, they were very close to their COVID lows. In other words, they had been essentially cut in half and then some. And I wonder, just two stocks, I grant you, but I wonder if if those who sort of use algorithms and other reasons to sort of come in or get out of a market might have seized on stuff like that, that was overdone for some big names.
MARTIN: I agree. Algorithm, algorithms, fancy schmancy things that tell you when to buy and when to sell. Sometimes the finger in the air works as well. I’ll tell you, Neil, I think you’re right. I think at some point when you look at price level, as you mentioned, with Amazon and Disney, Nike recently, too, as you mentioned before, the pop that it’s had today, if you look at sentiment on top of price, where it just seems like everybody’s bailing on a stock, everybody is despondent, everybody is forecasting such negative outcomes. Those are the times that we like to go in with some of our free cash here, because what you
oversee or what you see actually is this overreaction. And some of these names where there’s no sellers left, everybody’s already gotten out that we hands are gone and therefore buyers will stagger back in at some point. So therefore, you’re picking off some of those stocks. The two that you mentioned are great picks. They’re picking them off at lower prices than you would have gotten them, say, a few weeks ago.
CAVUTO: Thank you, my friend. Always enjoyed talking to you. Scott Martin, one of the best of the business, taking a look at the business.
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