- 2024-01-17
- Posted by: kimsite
- Categories: Commentary, Insights, News
Click here to listen to the full interview.
CHARLES PAYNE: I’m going to bring in Kingsview Wealth’s dear Managing CIO, Scott Martin. Scott, alright, so we had a shaky start. There’s no doubt about it. I think a lot of that was profit-taking, but since then, the market has been resistant to going down. Even today, I thought we were going to be down a lot more. What’s holding us up? Because earnings certainly aren’t.
SCOTT MARTIN: They definitely aren’t, Charles. It’s the fact that I think the market is looking at things constructively over the last several weeks, Charles, instead of poorly, instead of negatively. Buyers are out there looking at things optimistically and opportunistically, even if we have a little pullback in some big tech stocks or consumer discretionary names. Those are long-term buying opportunities that will eventually elevate prices.
CHARLES PAYNE: So this tug of war right now, it felt like everything was revolving around buying yields. Right after that 10-year went from 5 to under 4, it was like a free-for-all. We now see fund managers, asset managers, active managers, everyone clamoring to belong, and I think it’s provided some support for this market. But if that starts to break down, if this buying yield, let’s say the 10-year goes to 4.20, 4.02, 4.3, or higher, do you see the overall market beginning to collapse?
SCOTT MARTIN: I do, but here’s the thing about bond yields. I think they got a little bit too sanguine as they dropped from 5 to 4. Equity markets got too excited about it. If rates can stabilize somewhere, maybe around 4.10 or my particular number, which is yours as well, 4.20, I think that’s a number where if rates hang around there, not being so vulnerable, the equity markets can deal with it. The backdrop, Charles, is that the Fed is likely out of this game. Whether they cut or not, the fact that they aren’t going to hike anymore is something equities should be excited about.
CHARLES PAYNE: Alright, real quick before I let you go. Speaking of equities, a couple of names that you like. Waste Management, UNP, what’s going on? Why these are sort of ports in a storm for you right now?
SCOTT MARTIN: They are complete beacons in a terrible storm, like we’ve had. Charles, when things get challenging in the stock market, buy Waste Management. I know that sounds like a joke. A strong balance sheet, good cash flow, a small dividend on that name. It’s great to hold while the equity markets get volatile. Also, UNP, Union Pacific, is an area you can count on in the first quarter as things may get a little bumpy during earning season with cargo loads and shipping costs up, improving margins.
CHARLES PAYNE: Alright, and Scott, of course, introducing a new technical term when things get challenging in the stock market. Scott, my man, thank you very much. We’ll talk again real soon.
SCOTT MARTIN: Use that one. See you. I will.
