- 2023-07-31
- Posted by: kimsite
- Categories: Commentary, Insights
Click here to listen to the full interview.
CHARLES PAYNE: All right, folks, Crude having one heck of a July, up at least 15% here. And that’s just West Texas Intermediate showing no signs of stopping, at least right now. This will be the best pace in over a year, maybe finally living up to the hype that it came into the year with. I want to bring in Kingsview wealth management CIO Scott Martin. Scott, so you’ve been on the I think the last 4 or 5 times I saw you, you were like, yeah, you like you’ve been positioned pretty well in crude crude. It was a little sloppy there, but found some support right under 60. It’s come on strong. I did see earlier today one fund saw $200 Million in selling when Brent hit 80. So. Wow. Are you concerned that there might end up being a sort of sell on the rally kind of thing? Or can this be the the beginning of something more meaningful, beginning.
SCOTT MARTIN: Of the end of low prices Maybe? You know, and also to your point, Charles, they’re probably right about that sell. Now, that’s probably a short term trade for that fund because of the fact that Brent has rallied so well. So have the oils, too. I mean, you look at we talked about Pioneer sometimes before. We talked about Fang, we talked about EOG. Those are great areas of, say, the oil market. Oil producers that are paying nice dividends have great cash flow. So they’re paying it back to the shareholders and have great valuations. Man, in a market that’s crazy stretched, in my opinion, we’re somewhat stretched, so that’s where I like to hide out for a little while.
PAYNE: It is interesting, I had a chart last week that showed the cheapest sector in terms of PE ratios was the oil sector and the sector with the most money in terms of companies were the oil sector. There you go. You would say, Golly, that seems like a no brainer. And yet the oil stocks actually seem like they’ve trailed, though the the big move in crude. What’s holding the oil stocks back? How come like even when crude takes off, you know, they’ve made a good move but not the same kind of move that we’ve seen?
MARTIN: Well, I think it’s possibly interest rates and the dollar possibly, Charles, because of the fact that that’s been an inverse relationship. So we know over time the commodity prices in general, especially oil. So I think the fact that the Fed has kept going here has probably kept a lid on oil prices somehow the Biden administration maybe hasn’t blown it as bad lately in the oil sector as far as what their policies have been and the SPR drawdown. So that’s another area that I think to those two things may be combined, which the Fed, I think is going to step out of the way here soon, could weaken the dollar and therefore push up the price of commodities alone.
PAYNE: So stay stay with oil,
MARTIN: Definitely. Man, The picks I mentioned.
PAYNE: Banks have made a good pop. You know, again, that’s another sector that has done very well. That’s been the best performing sector ETF at least the KKR. Yeah, but do you stay with them now or.
MARTIN: Yeah, I think so. I mean, somebody famously said, Why do we rob the banks? Because that’s where the money is or something like that. And I think there’s money in the banks right now. Charles KB. CRE The two ETFs that are regional banks also still like fifth Third Man and CMA, Comerica, great valuations, good dividends, and they’re starting to wake up like oil.
PAYNE: Because of the news out of the SEC last week. I mean, the new requirements that they’re proposing,
MARTIN: Who are they? Again,
PAYNE: they say they say that maybe, just maybe, we’ll start to see the buybacks, which have been, you know, might put a lid on buybacks. I don’t know how much that hurts the regionals. I got to ask you about this. So Subway sandwich shop offering a free sandwich for life to someone who’s willing to legally change their first name to Subway. It’s already an S. I mean, so it’s not really a stretch. You don’t have to change your initials.
MARTIN: That’s right. I mean, it’s just a few letters, actually. It’s great.
PAYNE: That’s what I mean.
MARTIN: Subway, man. I mean, that could be.
PAYNE: A lot of nicknames.
MARTIN: Scott Martin It could be Subway, man. Yeah. I mean, I would have preferred to change my name to Taco Bell. Why didn’t I get that offer? But, hey, Subway, I’m up for it. Just give me a call. Five, five, five, whatever the last part of my number is. And let’s set this up because I’ll do it and I’ll take you there as my first guest.
PAYNE: I’m thinking all the cool nicknames you can have to the subway. I like way I’ll be like, Yo way. What’s up, baby?
MARTIN: What’s up, Sub man? I mean, there’s so many good things.
PAYNE: Yeah. I mean, there.
MARTIN: Could be a lot of things coming out of that. I’m down with that. Is it for life or is it like for a set time? Because what if somebody else comes to the table that’s cuter and eats more food than I do?
PAYNE: I hope I hope you do talk to a lawyer before you change your name, because the winner will be chosen at random.
MARTIN: Come on. I don’t believe that for a second.
PAYNE: You don’t want to be Subway.
MARTIN: Can I at least, like, audition. Look at that. See? There you go. Subway. Williams.
PAYNE: You don’t want to. be Scott Subway. Martin And not get these sandwiches.
MARTIN: That would be that would be horrible. But I hope you guys would still talk to me. Would you still have me on the show if that was the case?
PAYNE: Of course, Absolutely. Okay. Thanks a lot.
MARTIN: See you.
