- 2023-11-15
- Posted by: kimsite
- Categories: Commentary, Insights, News
Click here to listen to the full interview.
NEIL CAVUTO: We’re uncertain about the outcome, but Scott Martin’s keeping a close eye. The Kingsview Asset Management CIO and Fox News contributor. What are your thoughts? Seems like it’s not a sure thing.
SCOTT MARTIN: Definitely not a sure thing. Not much substantial happening here, as Grady mentioned. I mean, when we talked about this on the day the deal was made, it wasn’t about the 41% pay raise, of which 25% I’d happily take any day. Sounds good to you and me, right? That’s a lot of tacos. But considering, or something along those lines, maybe hamburgers, whatever fits. However, today everyone seems quite agitated, especially the automakers. We presented what we thought was a compromise. The unions and us had lengthy discussions. It’s not like this hasn’t been debated for weeks, perhaps even months by now. Finally, we reached an agreement that the UAW found acceptable. Now, suddenly, they want to renegotiate.
CAVUTO: It’s odd though, and I don’t have all the details, but often when you hear the initial highlights of a deal, it sounds fantastic. Then you delve into the contract, these things can be quite extensive, and you start realizing, hold on a moment, something’s not right. They seem to be in that “hold on a minute” stage. Regardless of their decision, we know the cost of cars will inevitably rise to cover this. What about that aspect?
MARTIN: Indeed, with supply issues and the motivation it gives to other unions or workers in different sectors. We’ve witnessed this in Vegas and the Hollywood scenario for quite some time now. It spills over into other areas, affecting an economy that’s in dire need of workers. Just look around, the countless help wanted signs or try to get something—there’s a scarcity of workers out there. Even the unemployment numbers reflect that. This doesn’t bode well for the overall economy to stand on its own and start thriving again.
CAVUTO: Speaking of concerns about inflation, we’ve seen consecutive reports, one on retail yesterday, the other on wholesale today, with the lowest advances in a couple of years, depending on which angle you’re looking from. So the idea of runaway wage inflation, what’s your take?
MARTIN: Well, as they say in one of my favorite movies, Clueless from ’95, Alicia Silverstone and the gang—funny how things play out. You’re right, it’s about supply versus demand versus wages. Everyone’s talking about these significant wage hikes, like the initial 41% UAW request. Look at all this money, but it translates to increased prices. That doesn’t make you wealthier. True wealth comes from a natural market force, not artificial interventions like government policies. The economy seems poised to break out of this post-Covid funk, and the Fed seems to be stepping back, as we’ve discussed before. It’s like, “Hey Fed, take a chill pill and relax.”
CAVUTO: Some are even getting ahead, anticipating rate cuts sooner than expected. I don’t think that’s in the cards.
MARTIN: Agreed, it feels like rushing headlong into a tree. Lowering rates by 100 basis points, even rumors of 52 or 50 before an election in August, that’s way too much. Markets, Neil, be it S&P 500 or Nasdaq, they thrive when rates are stable, not necessarily dropping. If rates could just stay put here…
CAVUTO: Premature rate cuts might trigger panic, right? What about that?
MARTIN: Exactly! What happened to your earlier resolve with those 11 rate hikes? You were so confident, and suddenly, it’s about renegotiating those 50 or 100 basis points. You’re pulling back just like that.
CAVUTO: I don’t see it happening either. Stay close, Scott Martin. Always good catching up with you
