Program: Making Money with Charles Payne
Date: 7/5/2021
Station: Fox Business News
Time: 2:00PM

CHARLES PAYNE: Dow. Wow, stocks rocking in the first half of the year with investors shaking off those price spikes at the store. So are we in store for more green? Let’s get the read from our market gurus, Scott Martin, any Gábor and Melissa Aamot. Scott, what’s the second half look like?

SCOTT MARTIN: I think it’s going to be bumpy, Charles, and it’s look, it’s great how we finish the first half of the year. There was a lot of anticipation, a lot of sentiment increase and frankly, a lot of deliverance on the part of the economy. But now the expectations are high. We’re expecting a big economic reopening. We’re expecting a lot of folks to go back to work and oh, by the way, be productive. And we’re expecting earnings to deliver from the S&P. Five hundred companies. So for my money, I think it’s more of a say watch and be more careful than we were maybe in the first half of the year just because of all the expectations that are out there, of which one or two of those is likely to fall flat, in my opinion.

PAYNE: You know, Melissa, what’s really interesting is I don’t know we’ve ever seen it. Well, once that we have five quarters in a row of five percent plus gains in the market only happened one other time in nineteen fifty-four, the rest of the next year, it was up twenty five percent. Can lightning strike again?

MELISSA ARMO: Well, I will say this, I think the summer is going to be bullish. I think the next two months we’re going to continue to be on a tear and many people are expecting that we’re going to fall and it’s just not handling. So shorts are getting trapped if you’re in the market long term and just ride it out is what I say. I think the second half of the year in the fall, though, it’s a little harder to predict what’s going to happen. God forbid something happens with this Delta variant that they’re talking about with Covid or any kind of shutdown.

PAYNE: Yeah, no doubt there’s a whole lot of things that normally investors don’t have to worry about exoticness events, things on the horizon, things bubbling up, the Federal Reserve, it’s hard to navigate it. But what do you think’s going to happen?

EDDIE GHABOUR: So, look, it’s been a heck of a six months, and I guess the reason why my Twitter handle is common sensible is when you’ve had a huge run up, it never hurts to take a little bit off the table. So our playbook is we think July, we’re going to continue to see a bullish trend upwards because we’re going to refer to that as our catch-up trade, because a lot of people have missed this move. But Jackson Hole in August has our attention and we think that’s when you’re going to start to see the markets really sell off. And we could see a pretty good sized 10 to 15 percent, because I find it hard to believe that by August, the Fed is going to continue to ignore the inflationary pressure that’s going to hit. It’s going to be higher than they’re anticipating and leading the market to believe. And they’re going to have to change your language and start pivoting. So we think that’s going to be the star of the short term correction that we will see and then we will get hopefully that Santa Claus rally that we’d like to see in a bull market. So 12 months out, we like it, but that’s our playbook here in the next six months.

PAYNE: Scott, you mentioned earnings. I think earnings are going to be phenomenal, like I think this last quarter was one of the best earnings periods ever. I think the next one is going to be better. And I hear what everyone’s saying about the Fed, but they keep fooling everyone, I think Jay Powell is going to ignore the data. What happens if we keep this momentum going? Do you want to guess at where the top is going to be?

MARTIN: Well, Jay Powell has to ignore the data, Charles, because that fits his narrative and he’s right. I mean, come J-Hole or the Jackson Hole meetings, really, I mean, he’s going to have to ignore the inflationary data that’s right in front of his face. As far as the earnings go, though. I’m with you, Charles. I’m expecting great earnings as well, but so are a lot of market participants. So is the market action. So unless these earnings are getting basters, unless they blow the doors off, I think the market might be ho hum.

PAYNE: All right. Let me switch gears here, folks, because more states over the weekend dropping those extended unemployment benefits before they run out in September. Melissa, do you think it’s working? Do you see any evidence that people are now going back to the labor force?

ARMO: As far as New York City where I live, it’s not happening. Yes, I mean, it’s a big, big problem in a city like New York where you have regular people that you need to do the jobs, the delivery people, the people in the retail stores, the people in the salons. People are not back to work. It’s difficult to get a cab. Cab drivers are not even working about 15 percent of the cabs of running the elections in New York City. We have to get people back to work because people are not working. Then it takes longer to get goods, products and services. If you’re ordering furniture or anything that you want right now, even if you call in the phone you want to pay a bill, you’re on hold forever. Why? Because people aren’t working. They’re not handling the service isn’t. Their productivity is low. People got to get back to work.

PAYNE: You know, Eddie, I say this the greatest jobs market ever, and it’s being met with the greatest general strike ever. I mean, it’s amazing. What do you think? Is it going to we’re going to get any relief. People going to go back to work.

GHABOUR: I think they are looking at jobs data. Last week, we started to see an uptick in the states that changed their stance on the extra unemployment benefits. So I think as they start to roll off, you will see an uptick. But look, the labor cost is a big issue, which is another big inflationary thing that I think the Fed is missing. My 14 year old just got his first job. He’s getting paid fifteen dollars an hour to scoop ice cream. I mean, let’s go. I mean, it’s insane what the labor market is going to look like moving forward. So it’s going to be a small, slow recovery. But I think you’re starting to see that trend happen already in a short period of time.

PAYNE: Fifteen dollars a day would have been phenomenal when I was 14. Any Melissa, Scott, thank you all very much.