Conversation, what jack dorsey told barrons. My colleagues, ben levisohn, carlton english and jack howe. So, ben, according to lpl, the market had its best 50day streak in all of history, and that was before fridays 800point jump. Is this all about jobs . Whats going on . Yeah, i mean, the market certainly sniffed out something, Something Big happening, and it really, i think, was shown in this jobs report. 2. 5 million jobs were created last month, and to show just how crazy that number is, the most optimistic economy who was surveyed expected a job loss of 800,000. I mean, its just an enormous dishes, and this is difference, and this is fantastic news showing that the recovery from the coronavirus shutdown is going faster than anybody really expected except for maybe the stock market. [laughter] jack so as investors, with we a always want to think about risks, right . There could be a second wave of pandemic, we still have three times as many people collecting Unemployment Insurance as we did at the peak of the great recession. There has been blood on the streets, it could get worse. But what ill ask you is what more can go right . If nothing else can happen that the market likes, this rally could stall. What we need to see now is the rest of the Economic Data start to confirm what the payroll shows. Is it going to show up in our industrial manufacturing surveys, is it going to show up in production, is it going to show up in retail sales, are consumers going to start spending. Thats how this becomes a positive feedback loop that can keep driving markets higher and the economy. If those things dont happen, then there really a lot of risk for a market that may have gotten ahead of itself. Jack one thing that has been happening this past week is bond yields have risen, bond prices have fallen as stocks went up. At some point could those yields get high enough where the stock market would start to get worried . I think they could. This move has been very large. It went up a quarter of a percentage point in the 10year yield this past week which is pretty enormous, especially when yields are this low. And i think the faster that goes, if it continues to accelerate, that could be a problem. Were not at that point yet, but at some point you have to start wondering does the federal reserve, which has certainly helped this rally with all of it monetary stimulus, have to back off of some of that, and all that could impact the market. Jack carlton, the obviously, its been a tumultuous week, and africanamerican unemployment actually ticked up slightly to 16. 8 . Interestingly, the corporate response to whats been going on has been stronger than weve seen in the past. Youve been writing about this a bit, talking to some chiefs. Yeah. And, you know, in the past corporations generally would not want to weigh in on social issues, and i think at this point a company cannot avoid it anymore. So a lot of corporations have issued statements, obviously, deannouncinging racism and sometimes even denouncing, and even showing support of the protests that have been going on. You know, thats part of the issue, but its also, okay, what are you going to be doing next to improve the situation. We have a number of pieces in the magazine this week where management were saying we need companies not just to say, okay, we denounce racism, but what do our leadership ranks look like, what are the pay disparities going on, and what are we going to do to fix those disparities. We also are are an interview with bank of americas Brian Moynihan who talks about its not just charity and government programs, its also about investment and partnering with communities to close some of those gaps that exist. And ive also been talking about how activist shareholders may may a role in this down the line where they urge more diversity on boards. That hasnt been top of mind lately, but a lot of the Institutional Investors that these activists support have the make a factor of their voting, and theyre looking for new ways of finding trekker candidates director candidates. Old ways of doing things are going to get you the old results, so a lot of investors have said theyre using things like linkedin is finding incredibly quality, diverse candidates. Jack jack, these angry conversations in the country have been taking place on twitter. Barrons caught up with the ceo this week to talk to him about his company. Yeah. This story is not about the controversy surrounding twitters efforts to police its content. This is a stock call. Bill albert sees significant upside, he says, for this stock in the year ahead. Twitter is a company thats getting some of the best growth its ever seen, tons of attention. But it has, for a long time now, underperformed in terms of turning that usage into ad dollars. There are now two activist investors on the board, jack dorsey in this conversation with barrons, he says hes accountable. You know, this isnt like one of these other social Media Companies where you have super voting shares and the the company is working on improvements to its advertise thing product and giving advertisers better ability to critical create campaigns. So bill sees upside for earnings and the stock. Jackie yeah. But, of course, he might be picking a fight with the president as well. Well see how that ends up. Coming up, how corporations have responded and should respond to the can killing of george floyd. Morgan stanleys carla harris next. 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I want to ask you a personal question about your personal reaction to the killing of george floyd, so many others before him and then the national response. Yeah. I tell you, jack, first of all, thanks for having me on, and its been a very, very painful experience. First of all, to know that it happens, but second of all, to see it over and over and over in the media. And the other thing thats been painful is to see the aha moment and then, and the associated pain for so many people who are realizing that this has been going on for a long time despite all the other headlines and despite the fact that a lot of other names before this one were in the media. And to see them now having the walkup moment and the associated pain that were all feeling, its been tough. Jack so what do you think of the corporate response . It strikes me that its been a little bit more forceful than it has been in the past. A broad range of Companies Making pretty strong statements. Yeah. I think thats right. And im glad corporations are making the statement that theyre making, frankly, jack. Because were in a period of time where corporate leadership is pronounced, frankly. And has each more power than i think its had in the past. And to make a statement about how they feel about this and what their cultures are like and what theyd like to see them be going forward, i think, is very, very important. Its an opportunity, and im glad companies are stepping up and taking that opportunity. Jack now, of course, to this point its just been words. What can companies actually do to affect meaningful change . Uhhuh. Yeah, i gotta tell you, i dont think its all been words. We were very swift in terms of our response. Weve announced a partnership with the naacp Legal Defense and Educational Fund which, as you know, one of the main organizations thats on the Ground Fighting for social justice every single day. And we have announced a significant financial contribution and partnership with them. All of the black managers and directors at Morgan Stanley stepped up to make an additional investment in ldf, not to mention the firm also matching employee giving. So, again, one of our core values, as you know, is giving back. The second thing we did was add a commitment to inclusion and diversity. The third thing that we did was we set up an institute of inclusion, eni doing it at the outset with 25 million to create policies and metrics that will not only measure us, but hopefully be a guideline for other companies trying to find their i what through this. Their way through this. There are Many Companies that are in various stages of their own diversity and inclusion journey. I think there have been a number of companies that have moved swiftly, but that just gives you one example of what a Global Leader has done. And i think youre going the see more of that. Jack part of the important changes here will be to see more diversity in the companies from all levels, you know, from the boardroom on down. You often hear, oh, i just cant find qualified minorities. Whats your response to that . [laughter] yes. Whenever i hear that, i must admit i think immediately to myself the person is not really serious about finding qualified people of color because they absolutely are out there. And if you dont have an avenue to get to them, then you have somebody in your organization that is of color and dont forget that all of them have a powerful network, and they can certainly give you access to other great candidates, or they can give you an opportunity to partner with other institutions that can give you a pipeline. And there is not one College President that would not take a call from a Major Corporation looking to employ their students. And so reaching out to historically plaque colleges, reaching black colleges, other colleges that have a Large Population of people of color, you certainly can find them. Jack thats a really good point about the college prime ministers. One more question for you. In addition to being a moral imperative, everything weve just spoken about a is good business. Explain some of the reasons why having a diverse work force accrues to the bottom line. Absolutely, thank you for that question. We are all competing around innovation. I dont care what industry you are in, innovation is the dominant competitive parameter, and if you are competing around innovation, just to give you a quick business case, you need a lot of ideas in the room to get to that one innovative idea that will how your company to lead. You need a lot of perspectives because ideas are born from perspectives. If you need a lot of perspectives in the room, you need a lot of experiences in the room. And if you need a lot of experiences in the room, you better start with a lot of different people in the room, because experiences are born from people. So you must start with a lot of different people in the room to get to that one innovate i idea. If you do not have diverse thinking at your Decision Making table, you will have a gap in your go to Market Strategy x. If you have a gap in your go to Market Strategy, you are vulnerable to the competition, and you are vulnerable now to that could cause you valuable market cap. I need to point out a couple of things for you on that point. It used to be the case, as i heard from tim ryan who i have a lot of respect for that was at cwc, companies had three constituents, and they were the shareholders, the employees, obviously, and there were their consumers. But now theres a fourth constituency, and its called community. Anal med and they are quick and immediate. Quick and immediate. If you have a misstep with your brand, it can cost you and cost you quickly. Jack yeah. Weve seen a lot of examples of that in the past week. Carla harris, thank you for opening your heart to us and thank you for your insights. I really appreciate it. Thank you for having me. Jack coming up, the companies that could come out of the covid19 crisis even better than before. Investor henry duggan joins the panel with his picks next. Tada did you know Liberty Mutual customizes your Car Insurance so you only pay for what you need . I should get a quote. Do it. Only pay for what you need. Liberty. Liberty. Liberty. Liberty. I see all the Amazing Things you have been doing. You are transforming business models, and virtualizing workforces overnight. Because so much of that relies on financing, we have committed two billion dollars to relieve the pressure on your business. As you adapt and transform, were here with the people, financing, and technology, ready to help. The first and only full prescription strength nonsteroidal antiinflammatory gel available overthecounter. New voltaren is powerful arthritis pain relief in a gel. Voltaren. The joy of movement. Cc jack as the u. S. Begins to emerge from the covid19 crisis, some companies are poised to come back Even Stronger than before. Managing partner at durable capital partners, thanks for joining us, henry. Since durable is not yet a household name, will be soon, im sure, i want to tell viewers you managed a mutual fund. It ranked first in the mid cap growth category returning a kind of amazing average of 21 a year for the last ten years that you ran it. Could you start out by telling us what youre looking for in companies now . I know youre kind of moving past the obvious beneficiaries of ecommerce and work from home and look for the Second Derivative beneficiaries. Can you explain that . Yeah. What were looking for right now is, you know, well, first of all, you know, we believe that the market, you know, sr. Ed good at very good at, you know, looking backwards. And, actually, its very bad at, you know, basically valuing, you know, change in the future. So what that means today when you had such a significant, you know, event like corona is, you want to look for sec la changes secular changes and understand what underlies them. So, you know, the obvious thing would be ecommerce is, obviously, going forward, but what are the platforms that are going to allow companies to basically, you know, thrive and be built on that. That might be more durable. Or the other thing that weve been spending a lot of time on is that you may have, you have Many Companies where 2020 is going to be, you know, a poor year. You know, certainly much less than one would have thought in 2019. But its about relative competitive advantage in companies. And so they could be having poor years, but if what theyre really doing underneath is building on capabilities and or their relative advantage versus the rest of their competitors, thats something that the market, you know, has a tough time understanding in the short term. And thats what were looking for at the moment. Jack one programming note, henry is kicking off the barrons investing in tech Virtual Conference thats going span six weeks coming up. I know jack howe has a question for you about one of your holdings. Does that come with a song and dance number, henry . You can tell me later. I want to ask you about bright horizons. I know you like the stock. I think of it as a place where parents drop off kids when theyre on their way to the office, a a daycare business. Whats the case for the stock in this environment where you have more people working if home right now . Yeah, you know, jack, its i think its a perfect example of something where 2020 is going to be, you know, a are poor year for the company. But when you look out whether you believe that the economy gets to a normalized in 2022, its actually getting relatively stronger. And ill break it down into two parts. You have their traditional business, the Center Business where they have about 1,000 preschool and daycare centers. And if you look at those companies, you know, twothirds of their centers are basically in partnership with corporate employees. And thats always been veried good for them very good for them because by teaming up with corporates, theyve been able to invest more in their teachers and their curriculum and then create a Virtuous Cycle where you have Better Service and better experience and you attract better customers. And that creates a positive vibe. And then, you know, if you look at that business today, you know, 80 of its been closed, and they havent even announced when theyre reopening. The second thing is if you look at their competition, the two largest competitors are owned by private equity, and then theres a number of, you know, very small competitors who really also dont have a balance sheet. So you think about the competition for teachers on the other end, for real estate and also the ability to really continue to invest in your product, theyre going to be, certainly, stronger on the way out. Jack thank you very much, henry. Unfortunately, we have to leave it there. I use bright horizons, and i like their service. Next time well talk about red fin. Up next, round table members give their investment ideas for the coming week. Stay right there. You ever wish you werent a motaur . Sure. Sometimes i wish i had legs like you. Yeah, like a regular person. No. Still half bike half man, just the opposite. Oh, so the legs on the bottom and motorcycle on the top . Yeah. Yeah, i could see that. For those who were born to ride, theres progressive. Lets be honest. Quitting smoking is hard. Like, quitting every monday hard. Quitting feels so big. So try making it smaller, and youll be surprised at how easily starting small can lead to Something Big. Start stopping with nicorette. Starting small can lead to Something Big. announcer reliability is everything. So, if your networks down, youre down. Verizon knows your customers need to reach you seamlessly. Your team needs to work from different places across many devices. Plus, you want the security trusted by some of the Largest Companies in the world. And thats why you trust us. The most Reliable Network in america. Jack so, jack, during the week when im on a zoom call with all you guys and my sons playing fortnite and my 6yearolds watching big hero 6, apparently theres a Hardware Company making that happen. I thought that was you playing the fortnite on the zoom call. [laughter] yeah, broadcom, its almost run like a Mutual Fund Business filled with chip companies, other types of tech companies. Diversified chipmerrick. They reported maker. They reported in line results for the quarter, so big whup, right . They had serious supply issues, and despite that, theyre okay. Theyre benefiting from 5g, that gives them a 40 increase in iphone content over 4g, making good money on cloud computing, even from Home Broadband with so many people working from home right now. Stock looks cheap at 15 times free cash flow. Jack thanks, jack. Carltons idea a little more old school. It is. Taking a look at caterpillar, its looking interesting to me now. Earlier this week we noteddededd that dividend looks safe, 3 yield, but also about the reopening story. The stock has been running up as some regions have reopened. New york city is expected to allow Construction Projects to continue next week. So it might mean that caterpillar has a little more room to run. Jack thanks. And, ben, youre looking at a financial. I am. Im looking at capital one. With this kind of payroll, more people have jobs, more people are paying their credit card bills, so capital one will benefit. It has a Little Energy kicker in there, thats held it back, but it actually could be a benefit if the energy patch keeps improving. Jack cc one interesting thing, you know, jpmorgan is not with us, al zahner hamilton is no longer with us, but the founder of capital one is still running that company. Great ideas, thank you. To read more, check out barrons. Com and dont forget to follow us on twitter. That is all for us, wear your masks, see you next week on barrons roundtable. From the fox studios in new york city, this is maria bartiromos wall street. Maria and happy weekend, everybody. Thanks so much for joining us. Welcome to the program that analyzes the week that was and helps position you for the week ahead. Im maria bartiromo. We have a lot to discuss this weekend. Don peebles is here to talk about the reopening of the economy and what all of the above has meant for cities. And later, Jonathan Ward is here giving us his take on china and the latest steps to crack down on bad behavior from the communist party. But first, a shocker of a jobs report this weekend. The u. S