Program: Making Money with Charles Payne
Date: 7/2/2021
Station: Fox Business News
Time: 2:00PM

CHARLES PAYNE: All right, I want to bring in Veritas financial managing partner Greg Branch, along with Kingsview Wealth Management CIO Scott Martin. Scott, you’ve been cautious on this market, but does this report give the Fed in your mind, ammo to stay the course? And if so, shouldn’t that generally help stocks move higher?

SCOTT MARTIN: Yeah, we’ve been careful, Charles, with these valuations, especially in some of the big tech names now granted, we own a lot of those still and we didn’t sell them, we didn’t sell the apples, the adobes, the Microsoft, the videos. But I just want add to them here, it gives the Fed, Charles, another thirty one days to relax until the next jobs report. And the one after you’re talking about with Constance, which is probably what they need leading up into the Jackson Hole meeting a couple of months from now, Charles. So to me, yes, the market is obviously relieved from what we saw this morning. I mean, but you noted it in the intro here to the show. I mean, you’ve got stocks rallying, you got bond yields dropping, which a lot of people aren’t talking about. How much that has been reversed from the top that we saw just a few months ago when people are freaking out about two percent, three percent on the 10 year that’s totally gone. We’re headed back towards one, my friends. So it allows the Fed a little pass here, gives the market some relief. But there’s a lot baked in here, as we’ve talked about over the weeks, Charles, that I think the market needs to see happen. And I’m not so concerned or because so sure, rather and I’m concerned that a lot of that stuff not not going to come to fruition.

PAYNE: You know, Greg, of course, when we saw that spike that Scott just referenced, most folks on the street said, hey, we’re going to real quick, maybe two and a half that listen to the bond market. It’s smart. It’s the canary in the coal mine. Since then, it’s gone the exact opposite way. And a lot of people on Wall Street are saying, well, ignore the bond market. Where do then?

GREG BRANCH: So, you know, when we look at history, I think it teaches us how to react in some cases. And after the GFC, it took us actually 10 years to get beyond two percent. Now, my interpretation, though, of this data is probably the exact opposite of yours, Charles. I think that this will actually turn attention to the other of the Fed’s mandates because the labor market is well at hand. Right. We see that our problem was that job consumption problem and we see that that is starting to abate. Like you said, we had nine million openings last month. So our labor market failings were not due to a lack of job offering or job growth. It was due to job consumption. And I think that we’ll see that trend continue as we move into the school months, as we move into some of the rich benefits starting to to expire. And so the question now becomes second.

PAYNE: And Greg, let me jump in. Let me jump in one second. President Biden, he spoke this earlier this morning. You know, he took a victory lap, but he said something that struck me about black and Hispanic unemployment. And the reason I bring that up is because it feels like this has become a de facto next mandate for Jay Powell. And while, yeah, they’re there, the you know, the job growth is good. We’re six point eight million away. And those and those unemployment numbers for blacks and Hispanics are significantly higher than other folks. So it seems to me that the Fed wants to get those down. They’re going to have to go way past to two and a half, maybe even three percent inflation for quite a period of time. And I think maybe the market knows that.

BRANCH: Maybe, Charles, you know, the question is, is are we using the right tools to address that? Right and easy money and a low, low interest rate environment is great for stimulating job growth, but those aren’t the tools in terms of job consumption that would spur on job consumption. And so the larger question you raise is, are we creating jobs that are available across all segments, races, genders of our economy? And that’s a very different question than saying let’s keep interest rates low and liquidity high.

PAYNE: Well, listen, by the way, I agree with you on that, it’s just that the Fed has picked up and they think they can play a role. I don’t have a lot of time, gentlemen. So let me ask you, all these jobs, all these wages, all this money, you know, seven percent GDP, wherever we’re going, it’s got one benefits from that. Isn’t aren’t there, like, in your mind, do any retail names or these specific industries, neches stocks that should benefit at least short term from this big boost, this big bonanza of money that people have in their pockets?

MARTIN: Yeah, MT numbers, money supply numbers are off the charts, as you mentioned, Charles. And the benefits here, I mean, we’re in the thick of it. I mean, this is the fun part. The hard part, I think, is three to six months. But I a couple of suggestions, a couple ideas we put into portfolios recently because of valuation, because of, say, strong free cash flow. And I love these names. I mean, there’s so much affection in these names. Charles is like love. Southwest Airlines and Honeywell, each win, I mean, love. And when you’ve got to love the stock and how they pick these tickers, but also stuff like waste management, for example, bloomin onions, bloomin brands. Yes. And my friends, Outback Steakhouse. Yes. I think those are areas, like you said on the retail side, that help kind of go with things, waste management, kind of a little bit more of a gross initiation there. But still, it had great company, great free cash flow and ones that benefit from the flows in the markets.

PAYNE: And only thing is, you got the wrong holiday, you should have given me those right before Valentine’s Day. Hey, Greg, I wish we had more time sharing with you here. Greg Scott, have a great fourth, gentlemen. I appreciate it. Charles.