A new ceo at ford, what jim farley needs to do to get the stock out of the breakdown lane. And microsoft in talks to acquire tiktok. Why the videosharing app is so popular and what it means for microsoft investors. On the barrons roundtable, ben levisohn, carlton english and al rupe. Ben, before we get to the dollar and gold, i just want to ask you, were most of the way through earnings season right now. We knew it wasnt going to be pretty, but is we learn have we learned anything new about the health of Corporate America Going Forward . Its a lot better than people originally thought. 82. 3 of companies beat, which is a really amazing number. The last four quarters was about 71 . And historically, the average is around 64 , and they beat by 22 , so these are huge beats. But theres also worries that these numbers cant be sustained, that they were onetime factors that held to the fact that things were going to get tougher ahead. A lot of it is being explained away. Jack ben, you write in barrons about the negative real rates trade. What is it, will it continue, and should i just pile into gold at this point . I think of it like einsteins theory of everything. People want something to explain why the market keeps going up and why we have these other things happening like gold at alltime highs. And when you look at negative real rates, it can do that. Negative real rates are simply the fact that when you buy a treasury. Bond, inflation is higher, so youre going to lose money over the life of that bond. And in that situation, Everything Else looks a lot more attract the i e. Gold, which doesnt bear interest, doesnt matter when rates are negative. So its really helped to get the nasdaq over 11,000, to help apple do well, it helps small cap get a boost. The biggest problem if they dont stay low, you could see a lot of reversals here. Jack okay. Hey, al, weve seen a changing of the jims over at ford, jim hackett is out, jim farley is in. Fords stock is down 26 year to date, tesla is up 245 year to date. Give me three things that the new jim has to do to get that stock moving. Yeah. Good question, jack. I would say three things, like you said, right . So, one, ford needs to protect their truck business. Ford makes most of their money in north america, most of the money in north america comes from truck profits. So hes got to protect that franchise which also means investing in electrification. Theres a lot of electric trucks coming including the cyber truck from tesla next year. So thats something hes got to take real good care of. Second thing, probably do something with europe. Europe has lost money for ford six of the last ten years. Gm sold its european operation a few years back. And number three, hes got to cut costs. Margins are not at pure levels, and hes got to cut costs while managing the existing pension, labor legacies as well as investing in these electric truckings. Its not an easy task. Do you think hell be able to do it, al in or, you know, is this a time for investors to get in . Well, carlton, the answer to that is probably twofold, right . You know, will he, you know, lap tesla, will he, you know, win the electric truck race or the electrification race, thats one question. The stock has been so beaten up over the past three years, just basic blocking and tackling in terms of cutting costs, getting margins up a little bit, successfully launching a popular electric vehicle or two, that would probably be enough for the stock over the next year or two really. Jack hey, carlton, i want to move to tiktok. Youve got to help me with my tiktok problem. Look, my daughter asked if she could download it on her phone, and i said no. Then i downloaded it to see what it was i didnt like about it, and now i cant stop flipping through those videos. The president saying hes going to shut it down in the u. S. Unless its Parent Company sells its operation, and microsoft is the most likely buyer. Give me your perspective. First off, why is tiktok such a big deal . Well, jack, i think youre much cooler than i am right now for all your time on tiktok. [laughter] laugh this reason its been a big deal, it was a popular app for the last two or three years, they make e these 15second short video, you can set music to them, its been a great way for new artists to showcase their talent. But now there is nothing else to do, so tiktok has seen this surge in downloads because people are just filming videos of them dancing, others doing little pranks. Theres nothing else to do at home, so also theyre filming the videos and consuming them because what else are you going to watch. Jack why is it that all the other Big Tech Companies are in the antitrust naughty corner right now, and everyone says microsoft has a clear path to buying tiktok . Well, you have to look at microsoft. So, i mean, it had its own antitrust problems 20 years ago, but microsoft doesnt really have a product like tiktok. They do have linkedin, that is a social media app, of course, but they dont really is have something that kind of is going to get that ad revenue, thats so consumerfacing, thats going to get those 100 million or billion users actively using it. Right now microsoft has a clearer path for Something Like that versus facebook which, you know, has instagram, has tried to compete with tiktok in a lot of ways. You know, microsoft is kind of the natural buyer for it among u. S. Companies. Jack thanks, carlton. Im still working on my dance moves. Im not ready to start posting videos just yet. [laughter] coming up, pets and the pandemic. Working from home and spending more money on our furry friends. The ceo is here to talk about it, thats next. Weve always put safety first. And we always will. For people. For the future. And there has never been a summer when its mattered more. Wherever you go, summer safely. Get 0 apr financing for up to five years on select models and exclusive lease offers. Jack pet adoptions have soared during the pandemic, so has time spent with pets. During the Second Quarter, tummy rubs for my dog ginger for up 30 from a year ago. True story. This past week zoetis reported a strong Second Quarter and the stock jumped. The ceo, kristin peck, joins me now. Kristin, i think of your company, i dont know if this is the right way to put it, but kind of half and half. Its the animals i like to pet, and its the animals i hike to eat. The pet business, you had strong growth there. What has changed during the pandemic for spending on pet medicines . Thanks so much, jack. Yes, whether you are, you know, curled up with your dog on your couch or put mil in your coffee milk in your coffee this morning, we have products that impact your life. We saw great growth in our pet care business growing at 13. And i think 13 . And i think the 30 rise in the petting of yours is definitely part of it. People are spending more time at home with their pets, and theyre noting more things about their pets, and theyre investing in them. Theyre important parts of the family and really the trend is the humanization of pets. Its definitely driving growth. We launched our biggest product ever for flea, tick and heart worm which led that group for us. Jack the other side livestock x their results werent as strong during the corner. I understand thats related to the restaurants shut down and some change in eating patterns. What can you tell me about that . Yeah. I mean, the big trends there were, you know, as we moved home, we went out less. Those are very different supply chains, and it took a little while for that to adjust. We also saw some packing plant closures in the u. S. Which significantly impacted our producers and our customers. Because those are very efficient supply chains, and even if youre operating, you know, approximately at 95 , thats still backing up the animals. The good news for zoetis in the quarter was our livestock business outside of the u. S. , which is 50 of our business, did grow, which was great, at 4 . But there was some significant challenges in the u. S. Which will likely take some time to work through. Jack until me about the lock term tell me about the long term after the pandemic is gone. I was looking at your stock, your company was spun out from pfizer about seven years ago. Its multiplied six e times. Thats a wonderful trajectory, and i can see a growing middle class around the world spending more on protein and pets, but i also think about meatless burgers. What about that meatless burger craze here in the u. S. . Is that a headwind for Going Forward . You know, the good news about the Animal Health industry overall is it is quite resilient. And particularly our portfolio is quite diverse. As you opened, you know, part pets, part livestock, half the u. S. , half outside the u. S. So the trends youre talking about with regards to, you know, great growth and alternative proteins, its still a pretty small number. And if you look at the overall trend for Animal Health on both sides, its been growing at 46 x. Those macro e trends will still drive that. Even if alternative proteins remain high, the growth in overall protein consumption giving, you know, a growing middle class will still be there. Jack youve been with the Company Since the spinoff, this is your first year as chief. Whats it like being a new chief at a company at a time when the world is going nuts . Sure. Its been a little crazy. It wasnt exactly my 100day plan, but i have been with the Company Since the beginning, and we just have tremendously resilient colleagues and really creative customers. An industry that i am so proud of, and as i reflect back at my First Six Months on the job, im just incredibly proud of how our colleagues have, you know, worked through it. You know are, we have a lot of essential colleagues that are still making vaccines and medicines in our manufacturing site and still discovering new drugs and customers who have been incredibly creative. My vet came to my house in my garage in the middle of the pandemic to take care of my dog and did an ugh that sound there the ultrasound there. So i think the creativity and resilience has just been so amazing. Jack final question, kristin. I want you to settle something once and for all for our viewers. Is it true that dog people are cooler than cat people, and while you answer [laughter] im going to put up a picture of my dog ginger taken from before the show. Go ahead. Well, obviously, we really cant take sides in these dogs versus cats, we adore them back, but i see the sparkling personality, and people start to look like their dogs. Jack no way, my dog is lean and mean, and ive put on some pandemic pounds. Kristin, thanks an awful lot for coming by to talk with us. Thanks so much, jack. Jack coming up, are you on the trump train or riding with biden . What different Election Outcomes could mean for your portfolio. The panel makes their predictions next. Usaa is made for whats next were helping members catch up by spreading any missed usaa insurance payments over the next twelve months so they can keep more cash in your pockets for when it matters most find out more at usaa. Com for when it matters most we do things differently and aother money managers, dont understand why. Because our way works great for us but not for your clients. Thats why were a fiduciary, obligated to put clients first. So, what do you provide . Cookie cutter portfolios . Nope. We tailor portfolios to our clients needs. But you do sell investments that earn you high commissions, right . We dont have those. So, whats in it for you . Our fees are structured so we do better when our clients do better. At Fisher Investments were clearly different. Jack now, im a little nervous about this next part of the show. Im a allergic to talking about politics, but whether President Trump is reelected or joe biden wins the white house, the outcome could have a major impact on your portfolio. And thats the subject of our cover story in barrons magazine this week. Lets get into it. Our panelists are going to represent one particular outcome. Al, all aboard the trump train. This is not necessarily e a reflection of anyones politics or views but,al, if the president reelected, what happens financially, whats the agenda, and what should investors do if they expect that outcome . Yeah. I should probably be wearing a red hat. I am on the trump train for this discussion. I think investors expect three thicks in a trump things in a trump second term; more deregulation, potential tax cuts. Thats generally good for markets. I think they should expect Defense Companies to continue to perform well. Take a look at a company like lockheed, its doing well. It actually trades at a discount to the market. Definitely the election plays into that. Recent polling plays into that. That would bounce. And i think investors should expect trade tensions with china, and i think that means two things. I think a company like deere where President Trump wants to see china buy more u. S. Agricultural products, thats good for them. And then on the tech side, a lot of these supply chains that originate in asia, itll continue to be a story for the next four years. Jack thanks, al. Now to blue sweep ben. If biden wins the white house and the democrats take the senate, what happens financially, what goes on in the stock market, where should i position my money if i think thats going to be the outcome . Well, it really means higher or or taxes. Higher taxes both on corporations, youre likely to see the tax rate go from 21 to 28 . And youre also likely to see taxes, especially on the wealthy, go up. Theres talks of making the Capital Gains tax equal to what the income tax is. But, and that could cause about an 8 hit to earnings on the corporate side if that would go through. The part that would offset that would be the spending that you would expect the democrats, spending on infrastructure and on different areas of the economy to really get things moving. When we think about what will do well, its really going to be a few things, green stocks. Those are going to do well. Things like tesla and first solar, because people are going to be incentivized to buy electric cars and to put solar panels on their homes. You also see infrastructure plays like Vulcan Materials and Martin Marietta do well. And you probably want to avoid companies that have a lot of low wage workers like mcdonalds and uber because you could expect a push to raise the minimum wage across the country. Jack it would be good for tesla, thats only up 245 . I think we can get to 690 by the end of the year. Carlton, theres another outcome here x that is that joe biden wins the white house and republicans keep the senate, what would that mean for markets, and what should i do if i expect that . Sure. So historically, theres a ton of caveats, small samples. Historically democrat as president and, you know, a republicanled senate, thats been the goldilocks scenario. A little bit of gridlock is good. So, you know, on taxes, there might be a push to increase taxes, but that will be curbed a little bit. The things you want to look at, you know, for pharmaceuticals theres been a push for lower drug prices. You might get some of that, but youre not going to get these big, sweeping regulatory changes that the market has feared because theres going to be pushback in congress. So you know, facing some controversy on both sides of the aisle, but the antitrust concerns probably wouldnt be able to go through if you still have a Republican Congress and also financials always under some regulatory pressure. But, again, theyre not going to be able to get some of the agenda through when you have a democrat leading and then also a republican senate. Jack okay. To good for tech, good for health care, good for banks, and i made it through our political discussion. I havent even broken out in a rash yet. Up next, round table members give their investment ideas for the coming week. Today right there. My name is janelle hendrickson, and im an area manager here at amazon. When you walk into an amazon fulfillment center, its like walking into the Chocolate Factory and you won a golden ticket. Its an amazing feeling. My threeyearold, when we get a box delivered, he gets excited. He screams, mommys work when the pandemic started, we started shipping out all the safety stuff that would keep the associates safe to all the other amazons. All of these are face masks, weve sent well over 10 million gloves. And this may look like a bottle of vodka. When we first got these, we were like whoa [laughing] with this pandemic, safety is even more important because theyre going home to babies, theyre going home to grandparents. So, our responsibility is to make sure that they go home safe every single day. Shingles doesnt care. I logged 10,000 steps today. Shingles doesnt care. I get as much fresh air as possible. Good for you, but shingles doesnt care. Because 1 in 3 people will get shingles, you need protection. But no matter how healthy you feel, your immune system declines as you age, increasing your risk for getting shingles. So what can protect you . Shingrix protects. For the first time ever, you can protect yourself from shingles with a vaccine proven to be over 90 effective. Shingrix is a vaccine used to prevent shingles in adults 50 years and older. Shingrix does not protect everyone and is not for those with severe allergic reactions to its ingredients or to a previous dose. The most common side effects are pain, redness, and swelling at the injection site, muscle pain, tiredness, headache, shivering, fever, and upset stomach. Talk to your doctor or pharmacist about protecting yourself with shingrix. Shingles doesnt care. Shingrix protects. Jack lets end with some actionabling investment ideas. Ben, my notes Say Something about taking profits in apple. Who takes profits in apple . Apples been an incredible stock. This thing just keeps going up. But recently those gains are accelerated to the point where the stock is now more than 20 above its 50day moving average, thats a technical point that traders watch, and that hasnt been a great place for the stock. Theres nothing wrong with the company, it still makes great phones, still makes products that people want, but the stock is overheated, so this is a good time. If youve been long for a long time the, its a good time to jack what about all this stuff i keep hearing about the super cycle, the phone, 5g, two at a time, what about the super cycle . Have you ever heard the maxim buy the rumor sell the news . I think a lot of thats going on. Were starting to price that stuff in. Jack okay, so now weve got to buy something. We need a good buy. Maybe even, carlton, a best buy. What do you like about the company . Very good there. So, you know, by buying into best buy, you may also get some indirect exposure to apple. Im looking at this one because its kind of stay at home 2. 0. The stock has had a runup as people were stocking up to outfit home offices and take care of schooling, but out looks like were going to be in this for long, you know . Schools moving online, people working from home looker, so that longer, so that stuff that you bought in april to make do, you might want to upgrade it. The headphoneses, the laptopses, the cameras, our home a appliances are getting more wear and tear, so im really interested in looking at best buy now. Jack for stay at home makeover, buy some shares of best buy. Al, what do you like . I like fedex. We picked it last year. I still like it. What happened friday was stevens analyst jack atkins called it his best idea. He listed a host of reasons, gave ten reasons, but basically it comes down to this is the best setup hes seep for the stock since 2017. And he sees it going to 215. Jack sounds good. Thanks, al, carlton, ben, for those great ideas. To read america check out this week edition at barrons. Com, and dont forget to follow us on twitter. Thats all for us. See you next week on barrons s roundtable. announcer the following is a sponsored program for prostagenix, furnished by prostatereport. Com. upbeat music hi, this is larry king. Over 30 million men in america have prostrate problems. I know, i was one of them. And all these natural prostate supplements like the ones i have here in front of me are everywhere. Drugstores, health food stores, on the internet, and all over tv, selling millions of bottles every year
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