Program:  Mornings with Maria
Date:  1/20/2022
Station:  Fox Business News
Time:  6:00AM

MARIA BARTIROMO: Let’s get to the word on Wall Street. Top investors watching your money join me right now to talk stocks and investing in this market, Strategic Wealth Partners President and CEO Mark Tepper. UBS Financial Services Private Wealth Advisor Ali Macartney and Kings View Wealth Management Chief Investment Officer Scott Martin. Great to see everybody this morning. Welcome and thank you so much for being here. Ali kicking things off with you in an important market and an important week. Bank earnings in the spotlight this week. Yesterday, we heard from Morgan Stanley reporting a record profit for the full year, capping off a mixed bag for the big banks. Give us your thoughts on what we’ve seen from the bank earnings so far, Ali. What does that tell you about the macro story?

ALI MCCARTNEY: Good morning, Maria. So good to see you back. So you said it, right? The the banks every earnings season, four times a year like clockwork, they kick off the earnings season. And this year, especially this quarter, because of all the angst and the changing narrative about what’s the Fed going to do? And is the Fed too late? The banks even have more of a spotlight on them. They also have really tough year over year comparisons, right? Because if you think about what we were doing a year ago, we were all at home sitting here trading. There was tons of volatility. So what we’ve seen with the exception of some of the banks, but some of the really large consumer banks have missed on earnings. The importance of missing on earnings as opposed to missing on revenue is the exact story that we’re talking about and everybody is looking to in the economy, which is labor force inflation cost pressures. And can you earn more than you more than you have to pay out? That’s what a lot of the banks are facing. Right? Compensation charges are higher than they’ve been. And so what that for tells for the rest of the economy in the earnings season is what everybody’s looking to.

BARTIROMO: Yeah, and look, Ali, we heard that from Jamie Diamond last week when he joined me on this program, he said for the first time in my life, I’m seeing huge pressure on wages and on people. I mean, I thought that was compelling coming from the chairman and CEO of one of the largest banks in the world, saying the first time in his life, he’s seeing huge pressure. His word, not mine. Huge.

MCCARTNEY: Yeah, so when you talk about, you know, a the lack of labor force and how we recover not from the pandemic, but how we move to the next chapter of having a robust, retooled labor force so that companies like that run by Jamie Dimon, like those manufacturing companies, can control their costs. That, I think is exactly what people are looking to. And that is why the market reaction has been so strong.

BARTIROMO: So, so, Scottie, we’re going to get another window into all of this this morning, we’ll get jobless claims and the Philadelphia Federal Reserve. The Philly Fed report out at 8:30 this morning, and then we’ll get existing home sales out at 10:00. All of this in the face of expectations that the Federal Reserve is going to raise interest rates multiple times. We spoke with Satori Fund founder and portfolio manager Dan Niles last week, and he was really ahead of the sell off. Here’s what he told us last Thursday washes.

DAN NILES: (Clip) I think the Fed’s going to raise rates five to six times. I think they’re going to start to work down their balance sheet this year, and I think you’re going to have 10 year Treasuries get close to three percent when all said and done and twenty twenty two. And I think that’s going to drive a 20 percent correction in the stock market, the S&P 500 at some point during the year because I think you’re going to see multiples compress a lot.

BARTIROMO: So, Scottie, we already have the Nasdaq in correction territory, down ten point seven percent from the highs. Marathon Asset CEO also says he’s expecting Get this eight interest rate hikes eight. Your reaction, Scott? What are you expecting?

SCOTT MARTIN: I’ll take the under. Maria, I’ll take the under on that. As well as what Dan said, because remember, the Fed tried to do this a few years ago and it didn’t go so well and they quickly reversed course. This could be the same thing all over again. I liked what you and Ali talked about with regards to cost pressures and things, Jamie Dimon said. A lot of the cost pressures that are out there, Maria, are related to supply. Supply of labor. Supply of good supply of materials. If those things get rectified, the Fed can step out of the way again and let the economy breathe as it should because the economy is actually slowing down the rate of inflation. Yes, it’s still high, it’s actually slowing at a decreasing rate as well. So therefore the Fed can kind of still playing this game a little bit. Yes, get rates off the floor, but they don’t have to go crazy with eight interest rate hikes, for example.

BARTIROMO: Yeah, it’s interesting because one of our guests said that yesterday that they will try raising rates, but the reaction in the markets will not be good. So then they’ll take to the sidelines and take a pause again. We’ll see. I mean, look, where oil is Scott OK? Eighty seven dollars a barrel and the price of oil? Would you buy energy related stocks or buy a commodity on that?

MARTIN: We have been married and we’ve been buying commodities materials as well. Now the energy situation is probably more related to kind of these domestic policy out of D.C. But just one quick thing about the Fed to worry is that the Fed is a very dovish embodiment right now. So if you’re talking about the Fed going all the way hawkish and staying that way. Remember, the Fed probably is going to stick to their knitting long term and stay dovish as they have been.

BARTIROMO: Well, Mark, I know you’re looking at dips and trying to find opportunities to get in you like Teladoc and other health care names. All these questions, same issues. What do you think? How do you see all of this?

MARK TEPPER: Yes. So we’re actually I mean, right now we’re we’re we’re looking to buy quality stocks on the dip and we own Teladoc. In the past, we booked a good profit on it. We’re not in it now, but I’m really starting to look at it and it looks very interesting here right now. And if I told you that like Teladoc before you looked at the chart, you might possibly think I’m absolutely insane because it’s it’s one of those companies that kind of fits into that, that Cathie Wood basket of stocks that’s been getting absolutely hammered. But after you look at the chart, here’s what you’d see. You’d see that in January of 2020, pre-COVID, this stock was over $100 a share. And today it’s below that. It’s around seventy five bucks a share. And we all know telemedicine is the future. It was really an incredibly slow grind from traditional medicine towards telemedicine before COVID struck. But then it accelerated super fast, probably transitioned a decade’s worth of change in a few months. More and more people are doing E visits now. So when I look at Teladoc, twenty five percent lower than it was pre-pandemic, I feel like I’m able to get all of that transition that happened during the pandemic for free. So I’ve got a heck of a lot of margin to say if you could Teladoc go lower? Absolutely. It could be sixty five bucks next week. It could be fifty five bucks the week after. But if I’m confident that at seventy five bucks, it’s going to be at least one hundred and fifty bucks, whether it’s three years or five years from today. That’s a risk worth taking.

BARTIROMO: Well, I like the fact that you’re looking at places to hide, even if we do have a broad sell off, and it seems like this is an area that has a long runway. Mark, how many hikes are you expecting in terms of the Fed?

TEPPER: So if I’m looking at the Fed funds future, what they’re telegraphing a little over for right now, I think four point one and it’s interesting because a week ago it was three and a half. Yeah, so it’s gone from three and a half to four point one over the last week. And what’s the S&P done over the same time frame down three percent and not looking good?

BARTIROMO: Yeah, that’s a good point. All right, Ali McCartney, Scott Martin, great to see you both. Thank you so much for being here, Mark. You’re sticking around. We’re so happy you are here all morning long.