- 2024-09-06
- Posted by: kimsite
- Categories: Commentary, Insights, News
Click here to listen to the full interview.
BRIAN BRENBERG: Alright, joining us now is Scott Martin, CIO of Kingsview Wealth Management and Fox News contributor. Scott, great to see you. Jackie was talking about the recessionary camp. EJ says we might backdate a recession to about now. You’re playing this from a market standpoint. How are you thinking about a recession and where you’re putting your money?
SCOTT MARTIN: I don’t see one. I haven’t seen one for the last two years like many experts, Brian, and I don’t think we’re going to get one. And look, these are the same people—not so much EJ, but others—who told you to get out of the stock market because a recession was coming, and it never came. The corporate debt bubble was supposed to explode, and it didn’t. So, I think there’s a lot of fear out there, especially on days like today when you see bad numbers in tech stocks. But these are stocks that have rallied so hard this year and have contributed a lot to our portfolios, especially the ones we own. You need these pullbacks to clear out the weak hands so the strong ones can come back in. Yes, there’s a big Fed meeting later this month, and I don’t think they should cut rates. They should leave everything as it is. The economy isn’t bad enough to support rate cuts right now. If they stay steady, that’s what the market should want, and that’s what the market needs.
JACKIE DEANGELIS: That’s not what the market wants, Scott. The market wants a 25 basis point rate cut next week. But that aside, is today a day where investors who made a lot of money in tech are just taking profits? Or is it a day where bad news is genuinely bad news and the selling will continue? Also, considering that September is historically a weak month for stocks, what do you think? Some say we’re in a recession and things are bad, while others think this is just business as usual.
SCOTT MARTIN: Yeah, and the S&P and NASDAQ just hit all-time highs a few weeks ago. Sure, we’re down a bit now, and people will say, “Here’s the recession we warned you about for the last year.” But honestly, is today’s data really that bad? It didn’t seem that terrible. And if you look at the overall Fed narrative, I think the media, not the market, wants a rate cut. The market has already priced in about 100 basis points in the 10-year, which has lowered some of the mortgage rates that were concerning everyone in the housing market. The market is doing some of the Fed’s work here. Think about it this way: if we get a 25 basis point cut before the election, with a growing economy, job creation, wage growth, and unemployment at around 4.2%, what comes next? Will we keep cutting rates to 3% just because the market wants it? That’s where the Fed gets into trouble. If you look back at the data from the past decades, the markets and economy perform best when the Fed stays off the front page. If they just step aside for a while, I think that would be the best outcome.
TAYLOR RIGGS: It’s tough when we’re all hooked on low interest rates. Scott, pivot with me and check out the data we compiled from Goldman Sachs. They’re estimating market performance under tax proposals from both presidential candidates. On one hand, Donald Trump’s plan to cut the corporate tax rate from 21% to 15% would boost earnings on the S&P 500 by about 4%. On the other hand, Kamala Harris’s proposal to increase the corporate tax rate to 28% could reduce earnings by 5%, and up to 8% when factoring in other taxes. Is the market appreciating the benefits or risks of these plans as we approach November?
SCOTT MARTIN: I think you’ve nailed it. That’s exactly what’s happening. And it’s no surprise when you dig into the numbers, Taylor, as you did so well. But don’t forget, beyond the immediate impact on market valuations, there’s also the wealth effect that follows these policies, whether it’s Trump or Harris. That impacts how Americans feel financially, which influences consumer confidence. The stock market’s performance, good or bad, has a direct effect on the economy. We need to be mindful of that as we approach November.
BRIAN BRENBERG: Scott, you’re bringing a lot of energy today, and I love it. I hope some of that carries over to our Vikings this weekend against the Giants!
SCOTT MARTIN: Yeah, we’ve got the Giants on Sunday, Brian, and that doesn’t look too good. So I’m bringing what I can while I still have control over it!
BRIAN BRENBERG: We might need you on offense for the Vikings, but that’s a conversation for another day. Good to see you, Scott. Thanks for being with us.
SCOTT MARTIN: See ya!
