Program:  Mornings with Maria

Date:  6/2/2022

Station:  Fox Business News

Time:  6:00AM

MARIA BARTIROMO: And it is time for the word on Wall Street. Top investors watching your money. Joining me right now, UBS Financial Services private wealth advisor Ali Macartney, Kingsview Wealth Management Chief Investment Officer and Fox News contributor Scotti Martin and Strategic Wealth Partners President and CEO Marc Tepper. Great to see everybody this morning. Thank you so much for being here. Scott, kicking things off with you. I want to get your take on the hurricane that’s coming. According to JPMorgan CEO Jamie Dimon warning of an economic hurricane on the horizon as a result of this Fed’s experiment and the monetary policy tightening. Also the war in Ukraine. He says Jp Morgan is going to be very conservative with its balance sheet. Your reaction, Scott?

SCOTT MARTIN: Wow. Well, the hurricanes here, I mean, it’s got landfall already positioned. So I think Jamie’s maybe a few days behind that or a few months. But it’s kind of funny to hear, Maria, the contrasting statements from Mr. Dimon versus Mr. Moynihan, who just a few weeks ago told you some things that were quite different. So, look, the data in the economy is not awesome. It’s not really horrible. So I think we’ve got kind of a soft landing slowdown definitely upon us. I think the hurricane, though, if we want to keep with that motif, is this administration, this toothless punch list almost making me speechless? Absolute lack of problem solving type of issues out of DC when it comes to all the things that the economy is facing. And let’s extrapolate that to Treasury Secretary Janet Yellen, which almost made me smoke my breakfast yesterday when I heard the sound bites you were playing from her about inflation and then her partner in crime, Fed Chairman Jerome Powell, who have completely all three of them, all three entities lost control of this economy, lost control of inflation, and have no policy to deal with it. So, look, the reality is we should all maybe take care as far as our finances here, be a little bit more sensitive to some changes in our lives, whether it’s our jobs, whether it’s our income, whether it’s our spending. And take that going forward, especially our investments, too, as stocks have certainly taken it on the chin here in the first few months of the year. Take that going forward as a way to say, hey, let’s get through this recession, this slowdown, which is upon us right now, faster and smoother than we had before, and come out of this better than we were when we got into it.

BARTIROMO: Yeah. Look, I’m not surprised at Jamie Dimon stance here. He says that the bank is going to be much more conservative. Let’s not forget what happened back in 2006 and 2007. Right. He came across, JPMorgan did and Jamie Dimon did and tried to help. When the US economy was facing a doomsday, he acquired Bear Stearns and he got slammed for it. Remember all the assets that he bought during that dark day? Then he got slammed by regulators. He said, I’ll never be there again. And he’s suggesting this again, that the Fed is going to start unwinding this balance sheet, is going to have lots of assets for sale. Guess what? JPM will not be there as a buyer this time around.

MARTIN: Yeah, exactly. And that’s interesting. Washington Mutual, too, back in those days, I mean, we can think about all those bad banks that were basically zombie banks. And you’re right, Jamie Dimon was a big hero back then. Still a very difficult time for us all to go through. I think the good news is, and pursuant to what some other things Mr. Dimon said yesterday, was that a lot of those conditions are not here this time. But it’s still definitely an economic impact to a lot of consumers and a lot of buyers out there.

BARTIROMO: Yeah. Mark Tepper, what do you say that he’s saying the balance sheet is going to be more conservative, lower earners are going to really feel the pinch if they can’t get the loans that they were expecting.

MARK TEPPER: Without a doubt. But look, I mean, to to Scott’s point, to your point, to Jamie Dimon’s point, they were put in a very, very difficult situation back in the mid 2000. And they don’t want to see that happen again. And to Scott’s point, I think that hurricane’s already here. All of the small business owners I talked to believe were either already in a recession or will be in a recession by the end of the year. And I think business owners on Main Street, I think they have a better pulse on the economy than the Fed who’s been lying to us then? Politicians who’ve been lying to us. So I’ll take my cues from them.

BARTIROMO: Well, what about this inflation rate at 8.3%? I wish that it was 8.3%. The stuff we’re buying is in the double digits. Like I mentioned, eggs earlier, up 22% year, year over year. The price of an airline ticket up 33% year over year. So, you know, the average is 8.3% after all of this is wild spending from this administration. But oil prices this morning are down. We’ve got reports that Saudi Arabia could boost production if Russia’s output falls after European Union sanctions, Mark. But the national average for a gallon of gas is still at an all time high this morning, $4.71 a gallon. Any expectations from your standpoint, from this OPEC meeting today, Mark?

TEPPER: I don’t know exactly what what I expect out of this meeting, what I would expect out of us as a country is that we should begin ramping up production. I mean, energy policy domestically has been mishandled for decades. Maria, if you think about it, back in 2008 when oil was over $140 a barrel, we were importing it. So we were buying it from other countries. A few years ago, when oil was 50 to 60 bucks a barrel, we finally became net exporter. So we finally started selling it. And even a fifth grader can tell you that buying stuff at 140 and selling it or 50, selling it at 50 or 60 is bad math. And this administration under the influence from progressives, they yeah, I mean, they’ve been blindly focused on green energy at any cost. But you need a hybrid approach over the course of the next few decades. You need to take the crosshairs off the industry’s back. But at the same point in time, Wall Street, Maria, has also condemned energy companies for pursuing production at any cost. So, of course, now they’re focusing on managing the pal because that’s what Wall Street has wanted. That means running leaner. That means less production. And all of that is bad for the consumer.

BARTIROMO: Well, I think it was you know, it was President Trump who loaded up the Strategic Petroleum Reserve. He bought oil to load up that reserve in the thirties. It was incredible. He saw the price of oil and said, well, it’s cheap, let’s buy it now. He was spot on. But Ali, we’re looking at more economic data out this morning. We’ll get the May ADP report out at 8:15 a.m. Eastern and get the jobs number out tomorrow, Ali. And, you know, I’m wondering if the jobs picture is going to start worsening, because you’ve already got a whole host of technology companies announcing layoffs. That’s certainly a telltale sign ahead of what could be a recession.

ALLI MCCARTNEY: It’s a great point, Maria. And the truth of it is we have a surplus of work in this country and a scarcity of employees. And right now, to your point, not only is that causing inflation because the employer is losing power and losing money to rising wage growth, but it’s also causing a lot of goods inflation, a lot of services inflation here. And so I think what this number is going to show is actually exactly what everybody is expecting, which is this amazing inflation picture for the employee is behind us and that the you know, what we’re looking at in the future, which is exactly what the Fed is trying to do, dampening consumption, dampening the amount of money that can be spent. Now, to your point, I spent the week before last in Silicon Valley with a group of venture companies. And the way that everybody there is to the Jamie Dimon point battening down the hatches and preparing for a quote unquote recession is by making their first list of employee cuts. Right. So when you talk about the pendulum swing, you talk about recession to expansion. That is definitely what’s coming next. That is battening down the hatches from an employer perspective.

BARTIROMO: Yeah, it’s a great point. But is that changing the way you’re allocating capital right now, Ali?

MCCARTNEY: No, I mean, not really. Right. I think that of all the things that have been hitting the tape and people have been watching since the the pandemic, there is much less sensitivity or reaction now to this number because everybody knows the path. Right. That just like we talk about, is peak inflation behind us. We know that peak unemployment or peak employment, the nature of unemployment is behind us. And so, you know, I think what we’re really looking for is to understand, can the Fed and this is everything that we’ve talked about and you’ve been talking about, can the Fed stop this cycle of inflation? And part of that is the job picture.

BARTIROMO: Yeah, right. We’ll get those numbers and see if it’s a market mover. Ali, great to see you. Ali McCartney, Scott Martin, great to see you both. Thanks very much, Mark. You’re sticking with us all morning and we’re grateful. Thank you so much. Great word on Wall Street.

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