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tv   Barrons Roundtable  FOX Business  August 1, 2021 7:00am-7:30am EDT

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but the u.s. did have a victory to tourists when lee has suffered setbacks in a day later tangled in the all-around individual contest that is something worth celebrating. i'll be back next week with more in-depth interviews. they can bring much for joining us. ♪ >> "barron's roundtable" sponsored by invesco qqq. >> welcome to "barron's roundtable" where we get behind the headlines and prepare you for the week ahead. and jack otter charles schwab chief investment strategist liz and solders with outlook, big tech reported lower earnings why did investors sell the stocks we begin as always with what we think the three most important things investors out of think
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about right now. the market shrugged off as covid news and the gdp report investors focused on earnings news the shortage feeding into the threat of inflation americans go back to work in schools were open and extra benefits expire and trevor milton indicted for misleading wall street about the electric vehicle company that is a lesson for investors, on the barron's roger ben levisohn, carleton english and dachau. so many headlines this week, we had the scary delta variant filling hospitals from florida to kansas, fed meeting and then the gdp numbers came in that were strong but not as strong as expected and investors shrugged. >> there's good reason that the investors shrugged, none really matter the fed did not do anything, the gdp raging should 6.5% growth, what it does care about his earnings, nearly 90% of the companies that are really so far have topped the earnings
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expectation, even though the s&p 500 fell 0.4% more than 300 of the companies in the index finished higher the equal weight to s&p 500 and the russell 2000 finishing up this week and that could be investors are willing to put the back to benefit from a reopening as delta might has gotten as bad as it's going to get. gerry: i sure hope so the small caps are getting better which seems to be economically. i want to ask about one specific headline in the market robinhood had its ipo the stock became public in the shares ended the day 8.4% below where they debuted and that was an interesting distinguish, that was a worse debut of any firm ever of that size. what was going on? >> you can tell things were not quite right when they priced it at the low end of the range was between 38242 and prices at 38
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and they tried to get the trading started about that but as soon as you start trading down the stock goes people are going to make statements about what this means but it was a priced ipo we see it many times over in the one i remember is facebook the ipo was terrible but created great buying opportunity nothing robinhood won't do anything but it's really just a stock. jack: that is good to keep in mind, what are you looking for next week? >> more earnings looking at craft, eli lilly, the host of the retailers will come out and these are the companies unlike the tech stocks that got all the focus is week of the ones that are on the ground and will tell us how consumers are spending and how business is going. jack: one more big number is the jobs numbers and we always look at this carefully but will look really carefully this week because we have all the job openings all the people unemployed are they going to meet each other, shake hands and
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will we see them on friday. >> exactly the number that we expected is in excess of a hundred thousand new jobs added in the month of july as you mentioned we have nine-point to million job openings yeah 9.5 million unemployed as you mentioned those aren't meeting and we would see a return of workers into the workforce in september but some of the hope is anticipating the proponent would say the enhanced unemployment benefits are expiring in schools are reopening that would free appearance to go back to the workforce but then you had the other situations such as the delta variant and rising covid cases, you have businesses saying they're having a hard time finding workers, that will continue and when you talk about the childcare issue our colleague had a really interesting antidote that i think everyone should read there is a daycare owner that has difficulty attracting workers for return to school you can imagine some parents would wonder i might be able to return
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to work for 8 - 3 but what about 3 - 5 hour. >> that was an interesting story another weather, my eye the first time in u.s. history that the workforce is shrinking, baby boomers get past retirement age, it's really fascinating. another factor is inflation the biggest driver of inflation when you see gas prices go up or whatever it is wages it if the employer's have to hike pay to attract people that put people in inflation. >> is not just inflation the it keyword that we have from the 70s where you have low economic growth and high inflation without workers it's tough to have growth, this is a little bit different from the dynamic 50 years ago because we have jobs that are available there just a mismatch in hiring people, it's two waves that this plays out businesses pay out higher wages which turns into
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higher cost, higher prices for consumers or a continued shortage of workers turning to supply shortages which turns into higher prices. jack: i want to get to jack on the hard to swallow claims it turns out he was misleading investors. >> the company is developing on batteries or hydrogen the founder might've been running his mouth on a certain byproduct in an indictment this past week federal prosecutors say he made false and misleading statements to drive demand and nico lost stock he had a fully functioning that is inoperable, it was a video of a big rig driving down the street and he had someone towed to the top of the hill and the brakes and rolled it down nickel luck became public through a deal and so did lordstown motors which you might remember in mid july it was being probed by federal prosecutors, the boom in
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hindsight looks like a green vehicle boom with low scrutiny stock, i'm not say the other companies are doing anything misleading i'm saying the world probably does not need this many carmakers in the stock market certainly does not. jack: could the next tesla behind now amongst these companies. >> no trevor mill tone might be, he said he's innocent and the company has not been charged with anything. >> you heard it here first, why a bull market and high investor sentiment can be the best time to sell charles schwab chief investment strategist liz ann sonders explains. sonders explains. ♪ they said it couldn't be done but you managed to pack a record 1.1 trillion transistors into this chip
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jack: newmarket high's bullish sentiment and blowout tech earnings as it all downhill chief investment strategist liz ann sonders also named barbarians one of the most influential women in finance. thank you for coming on the show. >> happy to be here, thank you for having me. >> what are the things that investors ought to think about a raging bull market can anything else go right in a way, you have done that with really interesting study what is referred to as peak gdp growth and peak sentiment which was news to me how should investors be think about that? >> first i would distinguish between peak earnings and peak earnings growth or peak gdp or peak gdp growth i think were past given that were in the third quarter what will be almost unquestionably the peak growth rate in sap earnings
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probably overall gdp as well and that the second derivative issue the rate of change is the way down, that has not bowed terribly ill for the market but it does usher in more about the volatility and more turn under the surface in the market and i think that's what were possibly set upward for the next month or two. jack: of an important distinction earnings will grow but not quite the rate that we've seen recently for obvious reasons the second quarter was awful. but another possible red flag, evaluation on just about every metric except for those when you compare them to yield and rates there pretty near historical highs i realize that's never a timing issue but investors should be thinking i presume longer-term returns are going to be muted when you start from
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this point. >> evaluation when it starts on the upside are particularly low on the downside is as much of a reflection of sentiment or anything else. they would pay nosebleed evaluation regardless of the underlying fundamentals and in early 2009 we could not give away stocks regardless of the evaluation is not a sentiment indicator but an indicator of sentiment that has to be in the mix as you look at them as well. jack: you get credit in early 2009 for saying maybe you should take the cheap stocks, the question now if everything is a little bit stretched were looking for catalyst, what do you think about inflation could that be something we ought to worry about. >> i think it's important for the equity market of equity investors to heed the messages coming out of the bond market and i think the move in yield from 175 in terms of the tenure in the end of march to a recent low of under one point to i
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think is sending a message that inflation even if it's sticky for a bit longer is not turning into a 70s wage priced spiral version of inflation we talk about psychology as it relates to the market but psychology needs to be thought of anything about inflation what happened in the 70s you kick in the psychological component that beholds the company's to pass higher cost on the consumers to ask for higher wages given the cost of goods i think that is a psychological piece that is not part of this puzzle right now but something to pay attention to. jack: in terms of potential catalyst, copan seemed like we were winning that battle and recently we seen a surge especially in a place where you live in florida how are you thinking about that is there any way to figure that into your
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outlook for the economy. >> the metrics we want to pay close attention to reflect whether human beings adjust like opentable seated diners or tsa traveler throughput or hotel occupancy those metrics and more will be the ones to pay close attention to to gauge whether the impact of the virus is significant enough on individuals and families and business leaders that behavior is changing and that the best way to focus in the absence of what we experienced a year or so ago. jack: you been in the position the best way to handle the scenario is to diversify, you have an overweight on healthcare what looks attractive about that sector? >> it's only outperform that we have among the 11 sectors and that's based on the view that we think we will continue to see significant volatility within sectors leadership literally on
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a day-to-day week to week basis and you don't want to make a lot of sector bets but tied in with our view particular if you're an active investor if you want to focus on both of the factors of value and growth i'm not talking about the indexes but the fundamentals of value and growth in healthcare is a sector where you find characteristics of both you have a little bit of the lower valuation, defensive characteristics but really in the catbird seat where we think significant investment spending and growth is going to be including in the private sector, i think it has hybrid characteristics but again i think is not an environment where investors want to make defined sector bets diversification across and makes a lot of sense and consider slightly more frequently balancing taking advantage of some of the swings and force yourself to do what were supposed to which is added low, trim high. jack: that one always works,
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in all five of the large tech companies you can see for example greater than 60% growth than advertising alphabet parent google similar growth in useful growth apple, amazon and microsoft is on fire that's one thing going wrong other of them into the story is cloud computing never heard them for a long time in large tech companies and amazon and google they all had much higher growth as companies work through the impact, they are throwing money at the cloud and it's really making a big difference in the results of those companies recorded. jack: amazing all that revenue we don't even think as companies have advertising revenue all the great news but every one of the
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stocks except for off about cell on earnings. >> they continue to struggle with component shortages this is a problem for apple which is the problem of making enough iphones will beget the new iphones coming soon, another issue were really seeing and into the pandemic era boom you can see this in amazon numbers for this quarter when it was a big drop off in the growth rate from the e-commerce business, that's a problem and another thing with the ongoing issue with regulation of technology companies and with growth rates this high you know is only going to increase the increase in washington arena big tech. jack: what about alphabet whether they do that they didn't. >> there's two factors in play they didn't rally as much as the others did last year so there's a little bit of catch-up going
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on but a return to growth in online advertising revenue, they saw a pickup in demand from retailers and travelers and the players who are part of the reopening and it's really paying off for them. >> just curious taking a look at apple human to the pandemic era and apples results doesn't appear the laptop sales is over. >> yes, that is interesting they had better-than-expected sales per quarter but it was way down from what we saw in the march quarter they were going 70% in march and back down to the midteens i think there is a sense we've all stocked up and had new devices at homes to work from home in the growth rate is going to slow from here and that's a concern for apple and other players. >> eric unlike when i got my
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first book at jeff bezos rocket a couple weeks ago amazon's latest e-commerce result in shareholders don't seem too impressed can the stock keep riding high on smaller growth numbers than investors think or does amazon need to get the mojo back. >> it's a really good question and debating on the end of the week i think there is largely an agreement that they can return to 20% growth as you move out of the quarters in the pandemic. and they are seeing great growth from advertising in the cloud business they will be fine but there's another offset their spending a lot of money to go with their logistics businesses, amazon has a long history of spending money to make money we will see some of that but that might be dead in the water for a little while but long-term amazon is in good shape.
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jack: eric, thank you so much roundtable members give their investment ideas for the coming week, stay right there oh! are you using liberty mutual's coverage customizer tool? so you only pay for what you need. sorry? limu, you're an animal! only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪ rush hour will never feel the same. experience, thrilling performance from our entire line of vehicles at the lexus golden opportunity sales event. lease the 2021 is 300 for $379 a month for 36 months. experience amazing. trelegy for copd. ♪ birds flyin' high you know how i feel ♪ ♪ breeze drifting on by you know how i feel ♪ [man: coughing] ♪ it's a new dawn, it's a new day... ♪ no matter how you got copd it's time to make a stand. ♪ ...and i'm feelin' good ♪ start a new day with trelegy.
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jack: jack as you know i'm looking for a used car to replace my 18-year-old but you suggest i have to hang on a little longer. >> intel's chief their new chief about the trip shortages past week, that's a big reason there in short supply in prices of used cars are rising the average used car is up $7500 in june
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from a year ago, the chip shortage will last a year or two longer but the worst will hit this quarter, if you have a car then keep driving it if it's not running get it fixed, for stops running pop a hole in the floor and fred flintstone you have to get a a couple more quarters. >> that's good exercise, i'll see if he could get his mojo back. it is time for actionable ideas ben levisohn buddy you have. >> on the span of healthcare it had a tough start to the year but people realize the covid in reopening had a great few months and there's a good chance that continues. jack: that's a good call, carlton what you have undermined. >> when you're ready i want your car, ahead of earnings pulled back from the enthusiasm on the retail sector earlier this year but consumer spending ticking up
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in june and even though a little bit different we will see a return to work season and see what they report next week. jack: a return to stores, this is interesting stuff, thank you very much, to read more checkout don't forget to follow us on twitter at barron's online, we will see you next every day. >> from the fox studio in new york city, this is "maria bartiromo wall street". maria: welcome to the program that analyzes the week that was in helps position you for the week ahead i am jackie deangelis and for maria bartiromo stocks closing out in a while july mark masten on where things go from here. gop results, republican congressman protesting the mask mandate based on politics and not science, i am talking with florida congressman byron na


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