Welcome to barrons roundtable where we get behind the headlines and prepare you for the week ahead. I am jack otter. What is the fitch rating downgrade mean for the healthy economy. Has the fed defeated inflation . Ill ask economist Jeremy Siegel remember the jetsons flying cars, we are one step closer as air taxis are set to kick off jovian beaver will tell us how it works. Later tupperware popped the lid off stop jumping 500 in one month. We begin as always with three things investors on a think about right now. Stocks were down for the week as bond yields search ten year treasury hitting the highest number since last november before pulling back on friday but cooler the inspected jobs report lifted spirits to end the week. Ship stocks have rallied on a. I. But rally from the biggest Semi Conductor disappointed investors. Amazon with a massive profit, will take a look at the tech giant stop what we learned about the health of the consumer. On the barrons roundtable carleton english and jacob. , the stocks did in down but it seemed like a goldilocks number coming from the fed in terms of the payroll. The payroll was exactly what you want to see. 187,000 jobs created below expectation the previous months were revised lower as well. We saw a job market that is creating jobs but not an overheating market vote for. An appointment remains low. But we would like to see that, for little bit but all in all this is a pretty good number this is the economy may have for the soft landing treat will be looking ahead to the cpi reading next week and i dont know what data that is but to see if we can keep getting the soft landing goldilocks scenario to continue. Jack that doesnt come from the fed i have said on the brain because of watching it so carefully. I want to ask about the readings agency by fitch downgrading u. S. Debts, most interesting the response from economists and others, why is this coming out now its very strange. The market seem to react but you said investors are looking for something else. If you look at the market when the news broke in the United States there wasnt much of a reaction at all in the bond market or stock it wasnt until the treasury announced they needed to auction off more treasury than had been expected if the bond market started to move. I think that more than anything combined with the stronger jobs data from the adp that was the thing that caused the bond market to sell off and stocks as well. The one thing the refunding announcement did do with the reinforcement that the u. S. Really does have to borrow a lot of money and we need to get our house in order. Jack more competition for yield japan, europe rates are rising and so the Bond Investors can go other places. One interesting dynamic in the market, the yield is going up, text stock at a high valuation, are we set up for value stocks to do a little better. They were great last year in 2022. Relative to some other. They have been terrible relative to growth. The things you want to owner microsoft and apple but those are very expensive. We saw that with apples earnings the stock finished on close to 5 on friday because the numbers, they beat them but asked in the same thing for all Growth Stocks. Jack thinking of Growth Stocks not so great in semiconductor. To be fair and had a fair runup this year but as earnings came out from a number of companies in Taiwan Semiconductors expectations are more muddy and there was told there would be huge recovery in Taiwan Semiconductors with a weaker than expected demand for computer, servers, all of the things that the chips are used for and you can look at the apple results that ben was talking about with weaker demand for handheld devices. The recovery of china has been much slower than expected and also we got so excited about a. I. , Artificial Intelligence and there is a ton of exciting things there but when you look at the revenue for a lot of the companies a. I. Is less than 10 aside from nvidia so really thats not able to move the needle for the companies in terms of their earnings just in time to make investors no when youre trying to follow a trend like that make sure you understand dont just buy chip stocks understand which when youre buying. Amd looks like it may be can get into the a. I. Space. I want to ask you another tech question, amazon, blowout earnings. Amazon is unbelievable stocks all of our falling on good earnings amazon is not just Gross Margins that expanded but cost like labor moderating, ecommerce continues to grow. Its unbelievable and that is helping advertising growing because when you have more people shopping on amazon prime which you did in the quarter you can put ads its helping advertising business, the club is a 12 as you get through economy not being so rough. More than 12 unit margin expansion, when i look at earnings that will grow 20, maybe 30, maybe 40 over the next several years in the stock trading 54 times earnings not that expensive, the stock may have more runway. Jack a good sign for the consumer, people are buying. Is a good sign a lot of the strength on amazons quarter was a strength of the business but a good sign for the consumer. Jack the last time he was on the show professor Jeremy Siegel was critical of fed chairman powell. All also ask the fitch downgrade and how long inflation will stick around next. What do we always say, son . Liberty mutual customizes your car insurance. So you only pay for what you need. Thats my boy. Stay off the freeways only pay for what you need. Liberty. Liberty. Liberty. Liberty. Tourists tourists that turn into scientists. Tourist taking photos that are analyzed by ai. So researchers can help life underwater flourish. 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Detect this i stay undetectable with fewer medicines. Ask your doctor about switching to dovato. Jack july jobs report came in cooler than expected, 187,000 jobs added versus estimate 200,000 what is this tells about the inflation fight in the odds of recession joy to me now finance professor Jeremy Siegel, thank you so much for coming on the show. Happy to be here. Last time we had you on your critical of jay powell, recently it seems inflation is slowing without the economy crashing biden shall never not too hot not too cold does j get a better grade from the professor. He does get a better grade, i dont give them a terrible grade for the inflation and being so late on that we would not be in the pickle that were in but i will admit i thought his rapid rise in rates would slow down the economy much faster than we seen. There is amazing resilience, the gdp is above every single forecast of last december on what they expected for 2023. Jack where are we in the fight against inflation . I think the fight of inflation is a going extremely well were good have passed through Uncertain Service items, slow to move items, there will be more wage increase and a lot of that is ketchup and i been critical of powell trying to squeeze down the wage earner that is not kept up with inflation he and she needs to get up to the inflation rate. I dont believe the any further hikes are necessary but the hikes that have been put in place so far have not really squeeze the economy, we see a slowdown in fridays employment report as you said is a slowdown and in particular the hours worked went down the lowest since the pandemic so we are in a slowdown but not a crash. I see a lot of resilience and my call for recession probability has definitely gone down over the last two months. Jack where is the call right now . I would say its 2 one against the recession for the rest of 2023 and early 2024. Anything can happen in the world that can upset that, what i hope is jay powell in his last News Conference was much more twosided and i see the risk on the downside as well and on the upside if we see the economy slipping we see initial jobless claims go up or any other sign of a slowdown in the consumer not only does powell have to stop raising rates he will have to start thinking about lowering rates even though there is a bit more inflation will system. Jack that lags in new forces coming with the student loan forgiveness india and so forth. Lets talk about the fitch downgrade, you and others have been critical in the timing and so forth. There was one point tough to argue with it does not seem the house and the senate are functional enough to really take on the problem of a huge deficit of national. Its going to require a difficult decision which our government doesnt seem capable of making. What are your thoughts from an economic professor of the debt and deficit. Jack i would include the executive branch along with the house. Honestly it seems like no branch of the government is taking cognizance of the deficit of the building deficit. We know far out in Social Security and medicare are insolvent and they cannot go on as theyve gone on. Ive argued i dont see an immediate crisis within the next few years it really will develop later but there seems to be no willingness to do that and by the way that is one thing that will buy the inflation upward and the more debt the higher the Interest Rates that youre going to have and this is something that will eventually feed into inflation going forward. Tackling the deficit is one factor in controlling the inflation. Sadly itll take that crisis to get the executive branch and the two other branches to do something about it. Professor siegel thank you so much for coming on the show and we will see you soon i hope. I hope so, thank you jack. 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Serious allergic reaction may occur. Best move ive ever made. Ask your dermatologist flying cars are becoming a reality such as joby, archer and lillian are the Major Players producing air taxis, small commercial airplanes to make shorter flights on demand, a story this week barrons, i bought a vehicle with tires for pavement, am i behind the times, or flying cars the new thing . The new kids are not flying cars or calling them ev cars, its electric vertical takeoff and landing aircraft. , they are the new helicopter, theyre better than a helicopter, they are cleaner, quieter and cheaper and they might be safer, what makes them possible is the fact that the batteries were using an electric vehicles and they can be used in these vehicles, carbon fiber so you dont need as much to lift one of the flying cars, i said it off the ground and computer small enough in airplanes i can go to the size. A really big deal they have stocks that went public in 2021 you have to Joby Aviation and Archer Aviation they have a new come back and ready to watch. We have somebody to talk about that one of the key players developing this joby founder and ceo Joeben Bevirt. He is in a hangar joining us from santa cruz, thank you so much for coming on the show i appreciate it. Wonderful to be here, lets start with the basics, you have a partnership with uber, can i take an apple on my phone and call the flying car where will i pick it up and how far can it take me, can you give me this info . That is a great question. Again and were launching our services and their taxi service. As you mentioned were partnered with uber so you can use the uber app or the joby app the multimodal trip from your door to the report to your desk station. So were really excited about that and excited to be partnered with delta the worlds leading Global Airline and were looking to leverage the Infrastructure Investments the delta made in new york and l. A. More than 10 billion on the terminals and were excited to put joby infrastructure at the terminals. Jack real quick can you give us a sense of the early use cases will be. Is this a trip to the airport because obviously one can land there or is it the hamptons to new york what you see is the first use cases. With of those are amazing opportunities as you mention the airport routes have amounts of directional demand and were able to feel seats going to the airport in the city. This is carleton english. A question a very exciting prospect but im little concerned about battery life for the vehicles or general safety, what can you say that. Weve been done on this and weve been working on it for 15 years and weve done extensive work on battery life and battery safety and incredible battery team. In our labs we demonstrated more than 10000 lights before we need to replace the batteries and we charge them after a trip from jfk to manhattan in less than six minutes. You already have a contract with the Defense Department for 2024, what exactly are the use case is going to be. Weve been working with the department of defense with the Defense Innovation unit and then Agility Prime so that work started in 2016, thats been expanding progressively even the last few weeks, we had a large number of folks from many different branches of the military who have been here in testing the main affection facility seen firsthand what the Transformation Technology can mean for the department of defense. Jack im assuming the early going there will be too many of these things flying but i always wondered once we have traffic in the air, how does that work in terms of lanes whos on the right, how do you manage that sort of thing . That is the exciting piece about the work that the faa has been doing they put a plan in place where we can have significant operations with a large number of aircraft as soonest we 25 and then we can scale that to the next level in time for the other vixen 2028 where this becomes a ubiquitous form of transportation. Jack Joeben Bevirt thank you for joining the show. Thank you very much, have a wonderful day. You ever try cashbacking . Its earning 3 at drugstores with chase freedom unlimited. So i can save on Something Special for a first date . Wait thats all for a first date . Whoa. Alright, cmon. Earn big with chase freedom unlimited with no annual fee. How do you cashback . 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Jack i learned something about you this week carlton, youve actually attended a tupperware party. It was the 90s it was the thing to do. Absolutely i have read a lot more interesting news for tupperware to stop over the last few weeks shares up over 800 . What is interesting about this this warm up didnt have much of a reason, a few months ago tupperware one of the going concern. Usually not something that makes the stock go up but subset of traders but the company issuing mean stock like behavior similar to gamestop or bed bath and beyond where there is an interest in a nostalgia oriented brands. I think in the case of tupperware and probably reminds me of what we saw with hertz near bankruptcy on the onset of the pandemic were a lot of retail traders look at the stock trading cheaply and i mean less than a dollar and they think of it like a Lottery Ticket im not advising her method of investing but it is something traders tend to do and at the end of the week tupperware was saying if the financial lifeline in restructured debt that put shares up more than 30 on fridays trading. Its not about the parties or the grouping noise the tupperware makes when you open or seal it but the stock is in focus for a certain type of trader. Jack that said do you think its a going concern. When the Company Warns about its ability to continue and they havent been able to file Quarterly Financial statements for several quarters, im just going to let that sentence go where thats going to go. Lets move on to actionable ideas jacob you first. Monster beverage had earnings they were all achieved expectations but they were just about what youre looking for when youre looking for the beverage, 14 sales growth excluding the impact of currency. Youre talking about a company that is participating in the category that continues to grow and grow globally its Energy Drinks but people are still adopting them, does the company stop the right products, 0 sug sugar, amazing at marketing and the Management Team that does a marketing still in place. Of fun trivia monster is the bestperforming stock in the quarter century up 88000 past performance is no guarantee, been what is your stock pick. I love wells fargo and release the 10q, no surprises, thats a good thing ever court calls it one of the top bank ideas because as idiosyncratic things going for including us trying to get out from under the regulators. I think it looks good on a technical basis. Jack to pretty different stop. Thank you. Invite me next time for tupperware party, check out the spacefaring. Com dont forget to follow us on twitter aberrant online and that is all for us, we will see you next week on barrons roundtable. Larry hello