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tv   Barrons Roundtable  FOX Business  March 6, 2022 11:30am-12:00pm EST

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have seen what, 31 departures of democrats who are not going to run again now. a lot of democrats have clearly i think given up on the possibility they will control the house next year. spent i've got to go with ink very much indeed for my guest this week probably back next week with more commentary and interviews on the wall street journal at large. thank you so much for joining jack: welcome to "barron's roundtable". we get behind the headlines and look at the week ahead. why a leading expert on geopolitical risk, ian brehmer, says vladimir putin has painted himself into a corner and how to invest in natural gas was we begin with the most important things investors ought to be thinking about, the war in
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ukraine pushed the market lower overshadowing friday's jobs report, market values of russian companies have evaporated exchanges have halted training. oil topped 120 by dollars a barrel this week, companies increase production and send prices lower. on "barron's roundtable," ben levinsohn, jack hough, we've seen the fourth straight week of stock market losses which are investors panicking yet? >> i don't think so. it was a bad week but if you told me there would be a worn ukraine oil prices would spike over $100 and the fed is raising interest rates, it would be much slower. it is in a tough spot. bonds have been rallying as investors seek safety and that cause the yield curve to flatten. we are not far from the yield curve inversion signaling that a recession could be coming. jack: it was a decent week if
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you were a bond investor but what will happen to be economy is rough. you didn't mention the jobs market. with that kind of jobs number is the recession really high? hosier of it was a stronger number than expected. it was the best kind of number you could get. it got overshadowed by what is happening in ukraine but the impact of covid is starting to fade. we had to get past what is going on in russia and ukraine. jack: any good news for stock investors? hosier of i'm not sure you can call it good news but there's a lot of cheap stuff, tech was expensive, neither are
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industrials, you have delta and bank of america, ford motor and tech stocks that have gotten beaten up to the point that if you liked them at the start of the year you love them now. a set up that could be good for investors if even a little good news shows a. jack: and they still have earnings power. carleton, a lot of investors own russian stocks and don't even know it because they are buried in mutual funds and there's nothing they can do about it. russia has become an investable. carleton: that is true. long before russia's invasion of ukraine investors have not had exposure. many russian stocks are no longer trading on exchanges, look at something like fairbank in russia, trading on $15 a share, now trading less than a
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dollar, both fell 80% and was halted. knowingly or unknowingly you are in a bind right now. jack: the strange thing is people are trying to get into the market. jan vanek saw in flows earlier this week. was with that? carleton: is interesting with the etfs the trade in russian securities and when you look at etfs holding bonds there was a liquidity mismatch and now you see it with stocks where the stocks are not trading but etfs still are and there are some investors, a lot of people want to sell the stocks but some investors are looking at depressed asset prices, down 80% and even with geopolitical
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concerns these companies have hard assets worth more than they are trading so a certain sector of investors are trying to buy that dip. jack: assuming vladimir putin would even allow them to own those things. oil, $115 a barrel last i checked, way below 147 but $-37 was nicer at the pump. how far can this go before company start pumping more oil? jack: you need more supply or less demand. we have tons of shale oil, why not drill, shoulder list a competing during the pandemic. the oil price came back, stocks came back and the shareholders said hold the line on production. don't want you to oil --
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overproduce which i reached out to the ceo of devon energy. do you have any wiggle room? he says no wiggle room. he's looking at flat production this year. the plan is the same. he starts going after new barrels now, he won't have them for 9 months, 12 months. he will have to pay 20% more rigs than he did a year ago because of inflation and if you look at futures curve the futures curve tells him price will fall the next year to $85 and that may or may not happen but for publicly traded oil companies to enter to shareholders, he says you need to change the shape of the curve for them to get excited about drilling, might be try that drillers but not public ones. i spoke to the head of commodity strategies at rbc, four countries have quick easy access to new barrels, saudi
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arabia is the most important, they are not eager to increase output, that leaves the possibility of oil demand, if prices get so high. the problem is during the oil spike you didn't see that until oil was trading in the 140s. jack: how would sanctions play if we reduce the amount of oil coming out of russia? >> steve told the investment bank if all russian oil was off the market you see $200 a barrel crude, a 2 percentage point hit in economic growth a bear market for stocks. jack: vladimir putin's worn ukraine cause economic
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jack: wild market fluctuations. extraordinary western cooperation since russia invaded ukraine. what is the a likely outcome? joining us is the author of the power of crisis, ian brehmer. appreciate it. i would like to start at the end is what are the likely outcomes of russia's invasion? any off ramps that could allow him to santa clara face-saving victory? >> my response is what makes you think it ends? the way off of an offramp is if you believe there is anything vladimir putin would be willing to accept as our climbdown and my problem with that, the reason i think it is unlikely
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is i can't see a circumstance where putin won't be dramatically less powerful in his domestic political position correct's economic position and in terms of russia's geopolitical position. then they were and putin was. ukrainians are the big losers but putin is a close second. as a malignant narcissist dictator, it is hard to imagine him accepting a negotiated climbdown was for the foreseeable future this is the end of the peace dividends come a new cold war with russia and a permanent decoupling economically of russia from the advanced industrial economies of the world. jack: i want to ask about the other extreme, how bad could
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this become? does the west escalate with a no fly zone or does putin feel more emboldened or more crazy and go into mold over? >> that doesn't feel like an escalation after 44 million americans were invaded by russia. you are not going to drive that headline. it is clear that the west will not impose a no-fly zone, will not send soldiers on the ground to defend the ukrainians and the reason is the west believes that would precipitate direct conflict with the russians and could lead to world war iii. the russians don't perceive the conflict that way. for the russians they believe sending advanced military systems to defend the ukrainians against russia, providing intelligence on the
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real-time disposition of russian troops on the ground in ukraine to allow them to blow them up. as well as the west trying to destroy the economy and destroy central bank assets. the russians see those as acts 04. the likelihood russians retaliate against nato is almost certain. that doesn't mean world war iii but it means cyber attacks and economic attacks and attacks against western citizens living on the ground in russia. asymmetric attacks, countries providing those weapons, and they are directly responsible, we will find out. jack: it sounds like cold war verging on to hard war. one thing different from the
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old days of the cold war is the oligarchs, the russian citizens are global citizens with yachts in the south of france and penthouses in new york. at some point can we squeeze those oligarchs enough to they decide vladimir putin in powers against their interest or his policies are so against their interests they can do something? >> they would have no money if not for vladimir putin and that is the most loyal and among the most cowardly of russian demographics and those that will turn against vladimir putin are those who are safely ensconced outside of russia. jack: i don't know how closely you watched american domestic politics but democrats and republicans unite on support for ukraine. donald trump has made statements of admiration for vladimir putin.
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does this pull republicans away from him? can we see cooperation or is that cooperation over? >> if you squinted you could have imagined the united states was a representative democracy. >> thanks so much for joining us. jack: europe's oil and gas prices are soa (fisher investments) it's easy to think that all money managers are pretty much the same, but at fisher investments we're clearly different. (other money manager) different how? you sell high commission investment products, right? (fisher investments) nope. fisher avoids them. (other money manager) well, you must earn commissions on trades. (fisher investments) never at fisher. (other money manager) ok, then you probably sneak in some hidden and layered fees. (fisher investments) no. we structure our fees so we do better when clients do better. that might be why most of our clients
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jack: russia's invasion of ukraine highlighting the value of the natural gas reserves we have in the us. how do we invest in that natural gas, andrew? is there anything we can do to
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send more natural gas to europe to reduce their reliance on russian natural gas? andrew:there is a limited amount the united states can do. 10% of us gas production via liquefied natural gas and much of that is spoken for under long-term contract. unlike oil you can't just put a tank and export it. you need facilities to liquefy it and those are expensive and take time to build. in the next couple years you can see a 50% increase in us exports. jack: you make the case that natural gas is here to stay and will be part of our energy future. explain. andrew:gas is the ideal transition to renewables and it could remain the same for the
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next 10, 20, 30 years. it is critical for electricity generation, heating and industrial use and has half the greenhouse gas emissions of call and less than oil. jack: the earnings of these producers could jump in the next 12 months because hedges are rolling out. can you explain? andrew:the gas producers had to much of their 2021-22 production at below market values, many were hedging 12 million btus. the price is around 5. they are missing a lot of earnings and gains. the good news is those bandages rohloff come you could see higher earnings for many producers in 2023. ben: it is ben levinsohn. in asia it is over 20 and in the us four five.
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how is that possible and how long can it stay that way? andrew:it could last a while because you can't arbitrage it by exporting gas. you need to liquefy, there's a limited amount of export facilities and liquidation facilities in the united states. you with the gas start to close. carleton: are there producers in the us you are interested in? andrew:eq t is the largest natural gas producer in the country and it didn't help itself in 2021 by hedging production below market levels but those hedges will start rolling off and that could mean higher earnings in 2023. initiated a 2% dividend and we could see higher dividends later this year into 2023. jack: you are looking at a roll up?
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andrew:a company formed by cabot last year has an excellent balance sheet and low cost of gas reserves in pennsylvania and like many companies in the energy area it is paying a dual dividend and variable dividends, around 8% and that could rise over time. ben: of sound like a dish at the olive garden. why are you going to canada for gas pick when we have this lovely gas right here in america? andrew:it is one of the cheapest gas plays in the world, produces gas in western canada and unlike producers that produce oil is relatively clean in terms of the way it is made. it traces a discount, decades
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worth of reserves. it is in good position, trading of 4% dividend yield so it is off the map. jack: nice yield and earnings futures. futures. i love your insights as always. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq
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take a stand and start a new day with trelegy. ask your doctor about once-daily trelegy. and save at trelegy.com. jack: some of these new easy startups like lucid and rivian look pretty but there stock charts are ugly. jack: three lane electrical stock, rivian lost a quarter
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of their value. company started by raising prices 20% and then walked it back. i don't know what the thought process was was the company is selling a number of vehicles jack up prices maybe and someone else said let's try it. investors did not love that claim. lucid reported earnings. nothing remotely close to earnings. shares got trashed, lordstown lost gm as an investor. san francisco became the first city in the us, $5 a gallon gasoline. when you can't get investors excited about easy startups, i think you have a problem. forward plans to separate to maximize profits.
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i said before going into a rising interest rate environment i would not bet on any not named tesla and i wouldn't bet on tesla. jack: carleton, what do you have? carleton: i think this is the key to the market getting too greedy, it is tough from the prior year's quarter, and one of the few beneficiaries. jack: you buy eight. >> a medical devicemaker, 52-week high unless it is the energy, or mining, in february,
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and the omicron wave, with medical devices. a spinoff of diabetes care, could be another catalyst. jack: thanks for insights. check out this week's addition at barrons.com featuring a list of the most influential women of the most influential women in finis. ... ♪♪♪ dr. michael youssef: the first time i started preaching, consistent preaching ministry in a small church in sidney, australia. i was a student pastor. i'd just enrolled in seminary. i still remember the first sermon i preached, but i was so nervous that the water-- they had a water glass on the lectern, and i was shaking so much, holding onto that lectern that the water was spilling. to this day, almost 50 years later,

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