Scott Martin – Fox Business News – 8.24.22 Cavuto Coast to Coast.
Program: Cavuto Coast to Coast
Station: Fox Business News
NEIL CAVUTO: Scott Martin right now Kingsview Wealth Management CIO, Fox News contributor as well. Scott, all these crosscurrents and signals that Madison was alluding to were getting in the retail world. I do find it interesting. I’d forgotten that Nordstrom has this lower end business that is taking it on the chin. What do you make of that?
SCOTT MARTIN: It’s tough. It’s a tough environment for the consumer. And as Madison said, tough environment for businesses, Neil. I mean, the interesting thing in Nordstrom case is you’re right, the lower end side of things, the rack aspect of their store is suffering right now. But that’s also reflective of the fact that maybe that higher end consumer will trade down at some point, because as we’re seeing at other stores, look at Target, Wal Mart over the last couple of months, a lot of inventory is now on the shelves and not being sold. So it’s spreading everywhere nowadays and we still have that labor problem to work out as well. Wage growth not keeping up with inflation. The consumer keeping up with their only essential spending and therefore not going to the Nordstrom racks of the world and buying gifts.
CAVUTO: You know, there’s a move afoot as well for, you know, the retail industry seems to want to scream at consumers. You know, the supply chain issues we had for a lot of key items, electronics, household goods, it’s it’s stabilized for the moment. You might as well start your holiday shopping right now. And they’re urging people to get out while the getting’s good. What do you what do you think of that?
MARTIN: All right. Well, tell my wife that you recommended that. So, yes, I’ll go out and take the credit card out, take out the plastic and buy stuff for maybe even next Christmas, because you’re right. Now, the good news is, Neil, this time around, it doesn’t look like we’re going to have a lot of the same delays maybe that we had last year. But it is a good idea. If you see something that you like, you see the price you like, go out and buy it because
it’s a good chance that maybe it will go below as least go disappear and then you’ll have to get it somewhere else or wait for it to come back in inventory. But the other key, too, is that retailers are suffering right now. They’re trying to get inventory moved. So it’s likely the consumer is going to have a lot of the power here around Thanksgiving and Christmas as retailers need to move goods.
CAVUTO: So what you’re saying is late shoppers, last minute, they will still be rewarded.
MARTIN: Yes. And also the stores will be rewarded, too, because that’s where a lot of the sales come for the retailers right around the holiday season. So you kind of have a little bit of a dose. You go with the consumer. Both want to work together to get the economy moving again. Remember, consumer spending is about 70%, seven 0% of the overall US economy and therefore this is key to getting out of this recession.
CAVUTO: You know, speaking of shopping, Scott, I knew you were very avant garde type of guy, so maybe you can help me out with this Apple announcement heralding this September 7th invite for presumably a new iPhone, I guess iPhone 14, some new watches and all. A lot of people are intrigued by the image here of a darkened apple. Silhouettes against a dark sky. People have told me, Neil, blow it up and you realize all those dots are apple watches. We did blow it up. It’s not Apple watches. There’s a reference to far out fancy cameras. Far out might aptly explain the price of some of these items because the new iPhone 14 at the Top End could go for 1200 bucks or more. I’m just wondering, whatever they announce, will people have the money to buy them or a lot of people quite content with with their phones the way they are now and in this environment not to.
MARTIN: Well, we’re all addicted to our electronics. And the iPhone is basically kind of like food for a lot of folks that I know. So I think it’s going to stand pretty well to do well in the release. Now, the point is, you’re right, the Apple products, as you know, they work very well. They’re all part of our lives. But the prices keep going up and the prices keep getting steeper. The technology, yes, gets better. But it’s about the hype, Neil, too. You know, they send out the invitation. People spread rumors about what the pictures are and so forth, as you just noted. But that gets the buzz going. And then leading into
this fourth quarter where consumers are likely to bounce back, I think the economy is going to have growth in the fourth quarter, maybe not so much in the third quarter. Consumers are going to get excited about new products from Apple, even if it is to say the iPhone 20 in a couple of years, because these iPhones do get better and better, but they do get higher in price.
CAVUTO: What do you mean? We’re hooked on our devices. I’m sorry, what were you saying?
MARTIN: Oh, yeah, yeah. That’s why I watch people walking across the street on their iPhones.
CAVUTO: That’s the thing. That’s the tip Off. It’s the best I could do. It was that that fast? You know, I am wondering, though, I think the death of the consumer has been overhyped, though I I’m not trying to dismiss that. People are in a world of hurt and they’re having trouble deciding on what to buy and pick and choose what they buy. But they’re buying now some you could say, but that’s buy data. You have to you have to buy certain food items, you have to the certain clothing items and all. But the resilience of the consumer has come through again and again in a lot of these retail stores, even the tough ones, where people are being very inventive and resourceful, but they’re not giving up. This doesn’t remind me of the seventies experience and the stagflation environment where we’re not only did jobs stop buying stopped. I don’t see that. What about you.
MARTIN: Don’t see it yet. It’s been close. So that’s the thing. We’ve gotten close to the edge and the consumer has come through, like you said. But here’s the thing, Neil. It’s for the consumer. It’s a lot about confidence. And if you think about the biggest item on our personal balance sheet, it’s typically a home. And when consumers feel, say, sketchy about their homes, sketchy about, say, their stock portfolios for one case bank accounts because they’re not getting interest, it probably never will. The consumer will recoil. And so we need to get some of those things stabilized, not that we need to get housing on fire again like it was the last couple of years. Not that we need to get the stock market on fire like it was, say, the last couple of years. Either. That’s a nice correlation piece, but we do need to get things stabilized because the consumer operates on more confidence than they actually do on, say, a personal net worth. And so therefore, if that tends to come through for the
consumer, I think you’re going to have a big fourth quarter and you’re going to have a lot of retailers participate in this rally. It just so far has been, as you mentioned, a select select few that get creative.
CAVUTO: Got it. Scott, thank you for that very, very much.