- 2024-02-01
- Posted by: kimsite
- Categories: Commentary, Insights, News
Click here to listen to the full interview.
NEIL CAVUTO: We are joined by Scott Martin, Kingsview Asset Manager, CIO, Fox News contributor, and a brainiac.
SCOTT MARTIN: Somewhat.
CAVUTO: When you think about it, Scott, the rate cut shouldn’t have been a shock. It seemed to surprise Wall Street yesterday, perhaps because it’s not expected in March. You had been warning that it wouldn’t come in March.
MARTIN: Maybe never.
CAVUTO: Yes, it might not happen at all this year. But the tax cut development was surprising. Initially, the narrative suggested it would only benefit the rich and there wasn’t enough money to fund it, especially from the left’s perspective. Now, there’s some agreement, whether it’s 78, 48, or 58. This agreement is significant, given the lack of consensus in the House and Senate over the last three years. The market is noticing this, even with a potential new president incoming. It could all fall through, but we’re further along than many thought. The House is one thing; the Senate is another battle. The Trump forces might resist any changes to avoid spoiling their party.
MARTIN: Exactly. This is where Biden and his team might ask, “Hey, can we collaborate on something?” If not, we risk a Trump comeback. Collaborating could create significant momentum going into the election.
CAVUTO: Incredible.
MARTIN: It could be more impactful than Taylor Swift running, or maybe not.
CAVUTO: No, she’s too busy with the election. I can’t believe…
MARTIN: I almost said Britney Spears, but that would be a Biden mix-up.
CAVUTO: It’s madness. But regarding the markets, do you find today’s situation more real than yesterday’s?
MARTIN: That’s a great question, Neil. Yesterday, the market grappled with reality and panicked. We saw the Nasdaq and S&P dive after Powell’s remarks.
CAVUTO: Powell didn’t help by trying to reassure them.
MARTIN: It’s like your parents arriving home at midnight and you’re trying to hide the mess. The market now wonders if we’ll see a cut by the election, or maybe we won’t need one because the economy might be okay.
CAVUTO: Regarding recession concerns and debt worries, how do you see things unfolding, especially in February of this presidential election year?
MARTIN: February will be challenging due to the earnings season. Big companies like Google and Microsoft have done well currently but are cautious about the future, impacting stocks. It’s like the party ending because the parents have arrived.
CAVUTO: You must have been a troublesome teenager.
MARTIN: Those were the days. But eventually, things will sort themselves out. As the election nears, geopolitical issues like Iran and China will remain unresolved, worrying the market.
CAVUTO: We always fear those unexpected ‘black swan’ events.
MARTIN: Yes, but if something significant occurs, like a war, it could be a buying opportunity for investors.
CAVUTO: The 10-year yield dipped today. What’s causing this?
MARTIN: It’s odd. Usually, bond sell-offs accompany rallies, but today’s dip could be due to war concerns. Still, the yield at 4% isn’t too bad.
CAVUTO: Could rising CD rates and treasury rates compete with stocks?
MARTIN: As volatility increases, they might, especially since we haven’t seen rates like this since before the financial crisis.
CAVUTO: Regarding a potential rate cut, when might it be more likely?
MARTIN: Probably right before the election, but that makes the Fed appear political. The market performs best when the Fed is neither cutting nor hiking rates.
CAVUTO: Are you bullish?
MARTIN: I am, as long as the Fed stays out of the way.
CAVUTO: Scott Martin from King’sview Asset Management, always a pleasure having you on.
MARTIN: Catching up, man.
CAVUTO: I wish that were the case.
