Barrons roundtable sponsored by global x etfs welcome to barrons roundtable where we get behind the headlines and prepare you for the week ahead i am jack otter, consumers are souring on the economy as fed officials mall interestrate National Economic jason furman on what these mean for investors, then upbeat earnings drive in the market this week analyst expected to see strong results continue beyond the First Quarter, later a rare apology from apple after a controversial ipad advertisement appearing to literally crush creativity we begin with the expert panel on three things investors think about right now on the barrons roundtable ben levisohn, jack cao and elizabeth obrien, it was another good weekend the markets and the gains were fairly broad. Its kind of nice we saw that the dow the market higher up within 2 has an eight day winning streak which is not the longest ever but its pretty nice in a case of no news being good news we didnt have Economic Data and releases of what came out was a little bit weak but not too weak and no Big Companies coming out with the remains in the market was left to the own devices, bond yields did not do much so use all utilities and financials and industrials a weird mix of companies of sectors that are responsive to rates in this economy and that seems to be with the market is looking at right now. Decent or Strong Academy compared to the rest of the world the u. S. Is only place in terms of markets finally we are seeing little signs of right to life in europe and china. Take this with a grain of salt, its only three months but the s p 500 over the past three months is gained 3. 9 im get a look at my numbers but you have emerging markets the etf more than 7 ez you in the eurozone up 8. 8 at the highest level since 2008, ftse 100 up 11. 4 and then the i shares china barge cap etf fx i up 24 in the past three months there outperforming right now. After years of saying diversify. Next week will get an allimportant read on inflation. Thats right, and Inflation Report that has been hot this year and were expecting 3. 4 for the headline down from 3. 5, 3. 6 and down 3. 8 as the numbers come in as expected they should be pretty happy, the big risk is bank of america if it comes in hotter than expected and if that happened julie cannot no rate cuts probably until 2025. Jack lets talk apple, they have all the events in the most recent event had little high poor attention but you say underneath the surface there is Something Interesting going on. New ipad might be a mediumsize, ill tell you what you remember the early 1990s you had to run out to compusa every other year and get a new machine because you needed Processing Power to run the next version of windows that has not been the case the internet and Cloud Computing killed that because the processing moved online you can use a 10yearold machine and get on netflix and what have you but Artificial Intelligence might move things back the other direction were coming off two years of doubledigit pc declines there was about to the First Quarter this year analyst say its related to a. I. Because a. I. It helps to have local Processing Power and its good for privacy and latency, interoperable latest ipad the boasting of the a. I. Copra ceasing 38 trillion operations per second, i dont know if thats a lot but be of a schedule here a lot more as companies boast about their a. I. Computing power, microsoft is going to issue a minimum recommendation for a. I. Computing power later this mon month. Apple the summer is expected to introduce an a. I. App store and that could lead to an iphone super cycle later this year in the fall. Jack should you buy a laptop now or wait until we have more powerful ones. That the early adopter spend the money and get this going so we see use cases for a. I. When he can do more stuff and go one by another machine take the 10yearold machine and use it for two more years. Jack elizabeth i wont ask you for trial under 38 trillions per second, Social Security they came out with a release slightly less bad than we thought. Exactly the good news if you can call it that the trust fund running out at the same rate as projected last year which is 2033 the Retirement Trust fund predicted to run dry if congress doesnt act in the worst Case Scenario that doesnt mean Social Security is going broke payroll will be sufficient to cover 79 of scheduled benefits, of course nobody wanted 21 benefit cut. Medicare is going to run out of money at some point its not enough money to cover cost. Was a little bit money with Medicare Part a hospital benefits projected to be depleted in 2036 which is five years later did was projected last year, thats partly because of government regulation aimed at cutting costs in the Medicare Advantage program. Slightly good news for the finances of the country and bad news for the seniors that see a benefit cut what is this all for the. It would be painful and accommodation of benefit cuts for future generations and future retirees not current ones and tax hikes you cannot borrow your way Social Security is not allowed to borrow its going to be painful but the more they kick the can down the road the more painful its going to be. Jack bringing it up today is career suicide so they probably will kick you down the road. President biden disregarding low Consumer Confidence former economic chair jason furman on why there stil traffic noises the road to opportunity. Is often the road overlooked. At enterprise mobility, we guide companies to unique solutions, from our team of mobility experts. Because we believe the more ways we all have to move forward. The further well all go. If you have wet amd, you never want to lose sight of the things you love. Some things should stand the test of time. Long lasting eylea hd could significantly improve your vision and can help you go up to 4 months between treatments. If you have an eye infection, eye pain or redness, or allergies to eylea hd, dont use. Eye injections like eyla hd may cause eye infection, separation of the retina, or rare but severe swelling of blood vessels in the eye. An increase in eye pressure has been seen. Theres an uncommon risk of heart attack or stroke associated with blood clots. The most common side effects were blurred vision, cataract, corneal injury, and eye floaters. And theres still so much to see. If you are on eylea or a similar type of treatment, ask your retina specialist about eylea hd today, for the potential for fewer injections. President biden said the economy is stronger than ever, watch this. The polling data has been wrong all along we have the strongest economy in the world, no president has had the run we had in terms of creating jobs and bringing down inflation, it was 9 when i came to office. The numbers show a bit more complicated, inflation added 4. 7 in 2021 bidens first year in office and didnt hit 9 until june of 2022, joined even a former Economic Council and chair under obama and harvard professor jason furman, things are coming on the show. Thank you for having me. The comment that we heard the positive misstated the inflation rate in the january when he took office, how much progress have we made in terms of getting to back down. We made a decent amount of progress on inflation, we made more progress than i expected if you ask me a year end a half ago and a lot of people in markets didnt think we would be in the place that we are now in inflation rate probably around 3 and were definitely not there yet but its going in the right direction. Jack how hard talk the last mile three down to two will be difficult, on the other hand precovid everyone said we had structural deflation aging population, technology is just inflationary, globalization has pulled back a little bit but the other forces are still there how do you put that altogether . A think theres anything instructional its a monetary phenomenon and i am worried the last mile will be harder that we could get the progress that we got without higher unemployment but if we want to get it from three down to 2. 0 that that wont happen without a significant down of unemployment and what we have now is baked in to wage and price persistence. Jack on the good side of the coin growth is stronger than you wouldve expected a year ago the latest gdp is 4. 2 i cant imagine that will stay the high for the whole quarter give assistance ever you think growth is and where its headed. The strongest thing and growth in the American Economy is emerging consumer, they may tell pollsters that their nervous and dont have confidence in the economy but when they go to the store they have a lot of confidence in the academy they take up their wallets that they spend. Thats what its looking like in the Second Quarter and all the indication so far that this will be another strong growth for consumer spending, ultimately we need more Business Investment and thats key to the supply side of the academy and thats been dragging a little bit more. Jack to what extent is Government Spending driving this growth in a receipted situation were fiscal and Monetary Policy are at odds . Certainly over the last year part of what we did have the recession that some economist predicted while monetary was tightening the economy, there was fiscal expansion for things like investments and infrastructure, microchips. You are seeing those two fighting each other playing out the numbers, Going Forward the deficit remained large but its not a fiscal expansion of fiscal expansion as if the deficit gets larger, that probably wont happen its more if it stays large so fiscal policy is shifting to a neutral stance so Monetary Policy hopefully by keeping the rates where they are now will keep pushing the economy down. We saw the deficit number is pretty ugly as 0 rate bonds mature and we roll it over into higherpaying bonds, as i recall the problem . Or deficit is an unsustainable course were going to have to deal with it and would have to deal with it sooner than later but if we wait two or three years set down and figure out an agreement then that would be fine to, this is a problem i dont think its an urgent crisis but sooner is better than later. Jack one solve would be ed yardeni cause the magic fairy dust of productivity we seen productivity better recently, do you think thats a sustainable course . Its not a. I. Yet but are numbers looking better to you . Im not seeing anything good about productivity in the data but i see a lot of good things about productivity in the news if you look at the productivity statistics they were good in the Fourth Quarter but bad in the first order, average over the last couple of years and the statistics are not showing mustve a burst in productivity, im using generative a. I. Every day in my own work is making me more productive more businesses are figuring out how to use it, im optimistic its going to show up i just dont know that its going to be on time to help the fed with this part of the cycle it might be to 5 years from now than the next year. Jason furman thank you for your insights. We appreciate it. Have a good weekend. Firstquarter earnings season coming to a close, investors when enamel is gone, you cannot get it back. But you can repair it with pronamel repair. It penetrates deep into the tooth to actively repair acid weakened enamel. I recommend pronamel repair. With new pronamel repair mouthwash you can enhance that repair beyond brushing. They work great together. Earnings season is wrapping up with 90 of the s p 500 already reported the First Quarter results, 80 are beating earnings and 60 beating on revenue, what is your take on earning so far. We came into earnings season and people were feeling down but the number is good revenue is pacing for 3. 7 increase in earnings pacing for several. 4 we see better revision that we normally get during the quarter which means were looking at higher earnings, not much higher by earnings for the year then we did going into earnings season and thats pretty good in terms of how Corporate America is doing. Jack stocks follow earnings this is good but you notice an interesting dynamic that those companies that are beating my bump up a little bit but if you did not look out. We always see more Companies Get punished more for missing then they get rewarded, thats a normal thing but this quarter is worse than normal so we see stocks that be on both earnings and sales are up 0. 7 that is less than normal in stocks that miss our down 4. 2 which is less than normal and were not necessarily seeing that but were seen idiosyncratic moves in the same sector so earlier this earnings season we saw were met or reported it dropped 11 for alphabet when it beat it went up 10 and we saw the Ridesharing Companies who were dropped 6 boatlift gained 7 it depends on whats going on with the specific company. One stock that got creamed was starbucks, what was going on there. Its an extreme case and plunge 16 to start this month, the samestore sales were positive 5 the quarter before they collapsed to a negative 4 and be evasive that hasnt seen a reverse since going back to chipotle in the e. Coli outbreak years ago it is to report solving the scoobydoo mystery of whats going wrong at starbucks, its not the economy theres not signs that customers are trading down or buying fewer items its a social media boycott link to israel and gaza and be of a cause of buying opportunity and spoke to the analyst at William Blair and she said way too many questions about starbucks she downgraded i wonder if its the Dunkin Donuts remodeling the house people going to do condone it instead of starbucks. Right he should drink starbucks and lefties bud light. Amongst the rubble any bargains. I salt to that stuck out Builders First Source sells goods for people who are building houses and they drop 19 . Jack 19 not 90. The bulls are saying the concerns about margins and guidance and reshare purchases are overblown and this is a great opportunity for investors that miss the rally it was up 80 over the past 12 months in the other issue shopify and drop 19 in both say the company will spend more and its raising subscription prices later in the year end potential for market gains both of those could be interesting. Next week we see retailers reporting earnings and jason furman said its holding up strong what is that what youre seeing. Will see what the data bears that you have two big reports the Census Bureau retail sales and Monthly Retail sales in the new york fed Quarterly Household debt and quarter report. Well see what the numbers say. Jack who are you looking forward to a stock report. Walmart coming up next week walmart benefits from the bargain Conscious Consumer they tend to do well with tightening in the following week we have target in their seen as splurge worthy so they tend to not do as well with bargain Conscious Consumer but the hand benefit from low expectation. Thats were the fancy people shop. Any other stocks to keep an eye on. Home depot was next week thats another one that ill be watching to see if there like Builders First Source if they get hit but theyre selling to a different kind of consumer but one to watch for a read on retail on the Housing Market so thats another good one to wat watch. Jack they want to keep the mortgage so they have to renovate. Thank you. Ben and elizabeth have investment ideas and jack weighing in on the piano crushing out and res the virus that causes shingles is sleeping. In 99 of people over 50. Its lying dormant, waiting. And could reactivate. Shingles strikes as a painful, blistering rash that can last for weeks. And it could wake at any time. Think youre not at risk for shingles . Its time to wake up. Because shingles could wake up in you. If youre over 50, talk to your doctor or pharmacist about shingles prevention. Jack apple 1984 ad is one of the best commercials to ever run on tv now for an ad that may not make it to the television. Apple apologize for widely criticized that showing a Hydraulic Press crushing creative stuff of piano, sculpture, paint cans, trump at the end of the ad everything is merged into a new ipad and this is post to pack creativity into the ipad in crushing creativity and lets be honest to be fair to apple a lot of the backlash was from people who go out of their way to be offended by stuff the Company Issued an apology which i think has soothed a lot of the outrage indifferent to the ad but i like the opportunity to say nice job dummies to accompany an Artificial Intelligence business that makes me feel better about my size. I have trouble seeing the ad agency watching thatll happen, that is going to sell stuff, thats a good idea looks good actionable ideas, sit down everyone this is a thriller. This is blockbuster courtesy of Warren Buffett and shortterm treasury bills like equivalent currently yielding about 5 and you get a little nice tax break because interest is exempt from state and local taxes and you could buy it through treasury direct or an easier exposure like bil. Im a gambler i might go for the twoyear and get five plus percent as well. This guy back from vegas. Another buffett pick although we picked up 40 or 50 years ago. A larger gain to sell if he wants to but im looking at cocacola the stock is on the move which kinda surprises me because at this date stock again 1. 8 , staples are doing well, its gotten a boost from its earnings where it shows strong organic growth, up 11 when the consensus was 7 in the worries that the dollar is too strong, coke does a lot of business outside of the u. S. But if the dollar stop goes we up it becomes another tailwind for coke, i would expected to keep making a run its almost a year so im just going to say hey, have a coke and a smile. Unlike buffett is this a trade or hold forever. Not a lot of growth. Its looking good i wouldnt think if you buy now you probably have a year to hold it theres been some resistance but if it breaks through the i think theres quite a bit of upside dad. Thank you very much, ben, jack and elizabeth, great ideas check out this edition of barrons. Com including our list of the top 250 advisor teams in the country, that is all for us we will see you next week on barrons roundtable. From the fox studio in new york city, t