Program:  Making Money with Charles Payne
Date:  4/8/2022
Station:  Fox Business News
Time:  2:00PM

CHERYL CASONE: I want to bring in now advisor groups Phil Blancato and Kingsview Wealth and Fox business contributor Scott Martin. It’s great to see both of you as always. And Phil, I’m going to start with you. I just mentioned this with Bob picking up on earnings. Earnings are coming in hot next week. Do you think we’re going to see anything to get the market out of this Fed rut, especially the banks who normally benefit from higher rates?

PHIL BLANCATO I do. You’re looking at more than half of the S&P 500 has a buy rating right now, 57%. That’s the highest number in ten years. Add to that, I don’t disagree with Bob. We’re just getting back to normal. A normal means normal earnings growth. The normal earnings growth means a positive. S&P 500 is not negative. So we’re going to get through some of this volatility in the next few weeks. Here, we hope to see a resolution, Ukraine and Russia. But more importantly, I think the markets prepare for a Fed hike and the earnings season could give us that little boost we need when things are going to be more positive than negative.

CASONE: Now, Scott, what are you looking at?

SCOTT MARTIN: I agree with Phil. I mean, I think financials are a really interesting aspect of the market right here, Cheryl, because to your point, I mean, the interest rate curve, depending on whether you look at threes versus sixes as far as six months or you look at the three versus the tens, I mean, it’s it’s kind of crazy how you can kind of parse that out and find your own reason to predict the next recession. But the reality is the banks are in good shape. So we’re actually looking at financials here, Cheryl, kind of looking at what I would also say is maybe the tail end of this great reopening trade. I mean, the great reopening trade in our opinion, was March. I mean, that was like the second half of March. So now it’s this April angst, if you will, Cheryl, as we come in to tech earnings, what their outlook and guidance is going to look like going in here to say Q3 and Q4, because those are the areas of the market where we’re likely to see the biggest bounce back once they finally hit some firm lows.

CASONE: Oh, gosh. Okay. Phil, I thought that the great reopening trade was last year story. Maybe not. What do you say?

BLANCATO: I completely agree. I actually think there’s more room to run. I when a consumer got over $2 trillion of spend, look at the regional banks and how they’re set up. Well, they’ll make money and cash balances and be able to loan some money to consumer. Actually, they were in the middle stage of this reopening trade. I think there’s still plenty more to come. I think you can still make money in the hotels and the airlines and the restaurants, and you do better than the growth sector, which gets hurt by rising rates. What’s pivot to a cyclical recovery based on consumer spending and you’ll do just fine in your portfolios. Case in point, value stocks this year are mostly up, not down. Growth stocks are down. So let’s parcel it out for what it is. If you were a tactical mover in your portfolio and you favored the consumer here, you’re doing just fine. I think we’ve forgotten that.

CASONE: Yeah. Now, I’m glad you brought up the airlines. Scott, I want to take this to you. You’ve got Spirit Airlines saying that talks are underway for a $3.6 billion takeover by JetBlue. Do you play either of these stocks or spy another buyout in the works? And we got to bring in the whole frontier side of this drama, which is turning into kind of a movie, to be honest with you.

MARTIN: Yeah, it’s going to be a total catfight. Don’t play those airlines because I don’t fly them. I got to tell you, though, guys, I disagree. I mean, if you look at the airlines and look at some of the restaurants, I mean, the reopening trade looks like dog food, frankly, in the last couple of weeks with respect to those stocks. So it looks like they’re already turning over. So my point is the following. I think the reopening will continue to happen. But you guys know this as well as I do. The market has front run just about every moment of, say, this COVID effect in the last two years. So with respect to how the market does bounce back, I think finding reasonable, appropriate valuation, which is not in the airlines right now, frankly, Cheryl, is how you’re going to make money in this market if you do get back into growth. Phil’s right. Value has been, in a word, valuable this year. But I do think that growth, trade does reignite, especially if we get further and further away from this COVID veil that we’re trying to lift.

CASONE: All right. Let’s pick up on that growth story, Phil, with you and this issue with Elon Musk. I mean, again, another piece of drama playing out. This makes businesses fun, right? You’ve got Elon Musk. He’s going to be meeting with Twitter employees after being appointed to the board. They’re now saying that he’s going to meet with them. We don’t know when, but are you going to buy Twitter or Tesla or anything that comes of this? And what do you think that this really means for Twitter? And also, I got to mention, Phil, those social media stocks were all getting a bounce when all of this news broke earlier in the week.

BLANCATO: So I’m not a fan. For example, a little comparison, Delta Airlines trading down 8% of the year below its historical average. To me, at the cheap stock, that’s got a chance to grow much higher. So I’ll take the other side of that versus the Twitter that’s trading above its P average. Does it have the kind of revenue we’re looking for? Valuations that don’t make sense to me. A classic growth story, looking for a recovery trade when interest rates are going higher. Just because Elon’s in it doesn’t mean it makes it a great stock with great earnings growth, especially as interest rates are higher. So I say, no, it’s not a buy. I’m not there yet. Maybe in the fall. Look back the growth. I just think they’re still too expensive.

CASONE: Well, maybe it’s too soon to see what he’s going to do. Scott But there is a lot of conversation around the fact that he might make it more, more free on Twitter, that they will kind of back off of their woke agenda of silencing let’s be honest here, conservative voices.

MARTIN: Yeah. Because Elon Musk says they should. I mean, look, I love Elon Musk. We own Tesla. It’s been great. And other than sharing a birthday with him, which is June 28th, thank you very much. I don’t think there’s much he can do with Twitter, honest to God. I mean, Phil’s right. Like that’s a tough mountain to climb. We actually sold our Twitter that we had for a lot of our clients this week. Just because we got that final bounce, because the stock has been a disaster.

CASONE: Yeah, we’ll have to see. I mean, I went on the air in the early days, you know, questioning Elon Musk’s outfits and words and, you know, sometimes his relationship choices. And I’ve been wrong on all of that. So, you know, who knows? Phil Scott, guys, thank you very much. Appreciate it. It’s good to.