What were looking for in oil Company Earnings in the days ahead. And the u. S. Paying pfizer and biontech 2 billion to deliver 100 million doses of a covid19 vaccine, what it means for stocks. On the virtual round table, ben levisohn, carlton english and jack howe. So, ben, so much happened last week. We had a real live pitch go out in baseball. It wasnt a classic. Basketball players are gearing up to start again, and small cap stocks did better than the nasdaq. What do you want to start with . [laughter] well, i was excited to see the Denver Nuggets go out and scrimmage. They did what investors have been doing, they decided to go big. Thaw put a 7footer at point guard, and it didnt go well. You can say the same thing about big tech earnings this week. Microsoft beat their numbers, they fell more than 4 . Intel, they beat, they were down more than 10 . Teslaallyed 5 after the tesla rallied 5 after reporting, finished the day down 5 . These stocks gained so much heading into their earnings reports that they couldnt justify anything with their earnings. It was just it had gone up way too much. No number was going to be good enough. And i think well see the same thing next week when apple, amazon, alphabet and facebook also report. Goldman said that apple had, that their earnings are going to be impossible to justify the stock, so i think that could be a problem next week too. Jack so what did do well this past week . Companies like whirlpool and pulte. They were both kind of stayathome stocks but not the way that we first thought when this began. Youre looking for a better home, and in both cases they blew away numbers, and the stocks gained a ton after the releases. Jack the old Economy Today at home. Carlton, i want to go to you with kind of the opposite of big tech, if there is such a thing, big oil. [laughter] the xre etf was up, i think, 2. 4 over the week. Thats new. That definitely is new. And the big news this week was not only chevrons noble energy deal, chevron is acquiring noble for 5 billion plus debt, so people had had expected a lot of m a in the space, and that really hasnt happened yet because, you know, the wellheeled companies are going to want to conserve cash, and then theyre going to be a little bit more cautious about acquiring some companies that might have a hefty debt burden. Whats interesting about this chevron deal though while its acquiring noble, for chevron, you know, its a minimal amount of debt that it will be taking on. But noble will actually help chevron to sustain its dividend because of, im sorry, chevron will be able to generate much more cash flow. But think this is probably going to be one of the few deals we see at this time. Chevron is a well sufficient player. It does report earning next week going into earnings. Analysts were generally more bullish versus, say, exxonmobil. Jack exxon also report earnings next week. Jack, the market still, though, is very much concerned about solving covid19. The race for a vaccine is on. Catch us up on that. Well, look, ive got good news and more good news, right . Our sister publication, market watch, had an interview with the famous dr. Fauci. He says he thinks theres going to be a vaccine ready either late this year or the first month or two of next year. Thats a little bit of a faster timeline than we had first heard, so thats good news. You mentioned the government with, you know, the deal to reserve millions and millions of doses. There are few deals like that out there. We have pfizer, astrazeneca and moderna all companies that are getting close to late, finalstage research on their vaccines. So thats all promising. The other thing is ive been wondering what happens when we actually get this vaccine . Well probably give it first to Frontline Health care workers, people like that, but will americans take the vaccine . Is this going to become another, you know, culture war kind of thing . Theres a report from Bernstein Research that caught my eye, it was titled could antivaccers sink the recovery . What it concludes is theres a lot more people who, e press misgivings about vaccine than who actually avoid vaccines. So in bernsteins words, the Vaccine Hesitancy is probably not a material risk. I think thats more good news. Jack i sure hope not because, yeah, that could be painful if people dont take it. Coming up, sir Martin Sowell on whether its safe to advertise on social media and what i has planned for his next venture. Thats next. Businesses are starting to bounce back. But what if you could do better than that . Like adapt. Discover. Deliver. In new ways. To new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back. But bounce forward. Thats why were helping you stay ahead and adapt with a network you can count on, 24 7 support and Flexible Solutions that work wherever you are. Call or go online today. Theyre going to be paying for this for a long time. They will, but with accident forgiveness allstate wont raise your rates just because of an accident, even if its your fault. Cut sonny. Was that good . Line the desert never lies. Isnt that what i said . No you were talking about allstate and insurance. I just. When i. Lets try again. Everybody back to one. Accident forgiveness from allstate. Click or call for a quote today. Jack the covid19 pandemic and stay at home orders have forced companies of all kinds to embrace the digital world. The already Disruptive Advertising business has accelerated its move into the online future. Joining me now, the man who built the wpp conglomerate before founding a new venture, sir martin sorrell. Thank you so much for coming on the barrons roundtable, sir martin. Delighted to be with you. [laughter] even if it is later here in london. Jack you stayed up for us on a friday night. [laughter] jack is so one of the fascinating things about this crazies is that un crisis is that unlike in the past where it was a pivot point expect previous world was reversed, so, you know, mortgages and housing shot up, that went away. Dot. Com bubble, that burst. Now all the trends that preexisted covid have accelerated. How is that affecting your world . Well, its affecting it in three ways, jack. The first, obviously, consumers. Consumers are shopping online, theyringing the kids online educating their kids online, their health care services, your insurance services. So thats one. And we communicate as were doing now online. The second is the media. As you well know at barrons and elsewhere, the impact on the media is accelerating the shift from traditional media to online media. Digital now well over half of the media budgets around the world. Its been a 500 billion industry, and digital this year will be at least 250 billion. We forecast by 2024 itll be twothursday of the market. So its growing fast. Especially streaming, obviously, netflix, disney plus affecting free to air networks. Rupert murdoch has closed, what, 100 titles in australia, so newspapers and magazines in their own form, very inefficient. And from a climate point of view, not particularly good either. Thats going. So thats the second. The third and most important is enterprises. People who manage companies, the status quo is broken. You look at q2 results, you look at the banks, earnings down by half, heavily provisioned. Thats true, probably overly provisioned. But basically were seeing a real blood bath in q2 in terms of results. So the status quo is blown. Theres no reason why Digital Transformation and Digital Change should not take place at a greater pace. So at a consumer level, at a media level, at a producer level, at an enterprise level, covid19 is having a very extreme effect on digital acceleration. Jack will we even have a printed newspaper telephone years from now . Ten years from now . I say not. Obviously, there will be some forms of printed newspaper around magazines. We we know that women enjoy magazines particularly. There will be magazines, i think, to continue. But talking to some of the Magazine Publishers and some of the newspaper publishers, they have great concern. I was talking to people in india this morning. Obviously, indian market more traditional, free to air television, newspapers and magazines play a much more pom innocent role. But when asked about that, when i said take your cue from what is happening in other markets. Look at a whats happening to free to air television, look whats happened to newspapers and magazines in other markets, that will come to india too despite the strength in their market at this particular point in time. What you see will be what happens, for example, in india. In ten years time, itll be much less. Whether theyll be gone or not is another question. Jack following up on that, google, facebook, increasingly amazon, more and more dominate the advertising world. How does anyone compete with that . We well, we dont compete, we work with. Alibaba, tiktok, obviously controversial given the tensions between china, the growing tensions with china and america. Basically, those six platforms dominate advertise thing. If you look at the Digital Advertising last year, about the same as this year, 250 billion. Down by about 10 or 15 or maybe even 20 in some sectors this year. Digital, flat. Google last year was about 165 billion, facebook about 65. Amazon about 1520 billion depending on which met iraq you take, and tiktok broke through at about 7 billion. The platform such a snap and twitter and even less. The real guts of it, if i can put it that way, are the six platforms, three western and three chinese. They will continue to dominate whatever happens in terms of regulation or not. Even if these companies were to be split. Scott galloway, whos a big to point of submitting up the four horsemen, makes the point if you split amazon up, aws probably will surpass the size of amazon on its own in due course. So i dont think it gets you very far at the end of the day. These platforms will continue to dominate, theyll continue to be extremely powerful, and i think they are being run much more ponce responsibly, google and facebook, after the boycott we saw of youtube and the boycott were seeing around facebook. Im not sure thats the right way to deal with the platforms. But whats happening is they are becoming more responsible. For example, facebook have had 35,000 the people to monitor editorial content. Theyve tightened up their algorithms, theyve taken out some of the facebook groups. So they are changing to deal with the concerns around safety, about interference in elections, about privacy and last but not least probably most importantly, currently hate speech particularly in front of the november election. Jack Scott Galloway would say theyre not doing enough. Can they do more . And really importantly, are they a Media Company or a tech company . Well, ive always believed, jack, that they are a Media Company. They always professed to be tech companies, i think thats the heart of the issue, and its a really good question. The heart at this point is whether theyre media or tech companies, and i think they cant claim to be sort of digital engineers tightening the digital nuts of their digital bikes. They are responsible just like you are at barrons for the content that flows through your channels, but i are to say in relation to the Current Situation surrounding facebook, they have become much more responsible and much more responsive than they have before. And i think the boycott is once you exercise the threat, it has no power. So the threat, if the threats there and its almost unsaid, but its thats far more powerful and much more powerful to have private conversation. Dealing with the chinese. Dont go public with it but just talk the them, talk them through it and suggest improvements. I have to say the platform have been very responsible. Google has banned political advertising from its platform, twitter has too. Interestingly, twitter has still come in for pressure for advertisers certainly e in the short term. But i dont think boycotts at the end of the day are going to have much effect. What is much more effective is to talk directly to the platforms about your concerns, express those concerns and get them dealt with. Jack i see a future for you in the diplomatic corpses. Thank you so much. [laughter] well, there are a lot of diplomatic problems out there, very worrying. The g2 situation, the situation with china and america i find most disturbing. Jack agreed. Thank you so much for joining us. Coming up, how will the news on the vaccine front affect the market and your portfolio . The panel tackles that one next. When you think of a bank, you think of people in a place. But when you have the chase mobile app, your bank can be virtually any place. So, when you get a check. You can deposit it from here. And you can see your transactions and check your balance from here. You can detect suspicious activity on your account from here. And you can pay your friends back from here. So when someone asks you, wheres your bank . You can tell them heres my bank. Or heres my bank. Or, heres my bank. Because if you download and use the chase mobile app, your bank is virtually any place. So visit chase. Com mobile. [ engine rumbling ] [ beeping ] [ engine revs ] uh, you know theres a 30minute limit, right . Tell that to the rain. [ beeping ] for those who were born to ride, theres progressive. But what if you could stdo better than that . K. Like adapt. Discover. Deliver. In new ways. To new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back. But bounce forward. Thats why were helping you stay ahead and adapt with a network you can count on, 24 7 support and Flexible Solutions that work wherever you are. Call or go online today. Jack as we move closer to a covid19 vaccine, how are investors responding, and how will the market react . Head of ec equities strategy Christopher Harvey joins the round table. Chris, its great to have you here. Obviously, the story of this market has been tech, tech, tech. You see a continuing meltup and if then maybe, finally, that pivot that everyone has been waiting for. Can you explain your thinking . Yep. So, jack, for some time now weve been talking about go big or go home, right . We moved up cap over the last 12, 18 months. But what were really seeing the opportunity as we go forward is down capitalization, your smaller cap, more suckly Call Companies cyclical companies. What weve been saying is theres not enough value in value. Well, after the selloff we had back in march, were now seeing a opportunity of value. And thats where the real mispricings are, and we want to start giving that portfolio to these missed pricings to these companies that are a little bit more contrarian because we think the economy is slowly coming out of its malaise, and these are the companies that will benefit the most. Jack to your point, as you go by price to book, you had a chart that showed that small caps are actually at a discount that we havent seen since the tech bubble days. I do want to is can about one possible hitch in your thesis. You pointed this out, if we get a bad second wave of covid19, that stay at home tech play will continue. Thats right. Covid19 is the wildcard. But one of the things weve always a claimed and one of the things weve always maintained is typically when you have a shock, your first impact is your worst impact. Then the markets adjust, people adjust, investors i adjust, and so we dont expect a really big even if we we do have a second wave, something that is cataclysmic, something that even matched what we saw earlier this year. And so while that is for us, we dont see that a real big problem because people are adjusting, and if we look at how covid is spreading at this point in time, yes, we are having hot spots, but its nowhere near the situation we were looking at much earlier this year. Jack gotcha. I think jack howe has a question for you. Hey, chris, im glad the thing to do is not just put it all in tesla and forget about it. [laughter] if im looking at some of these value stocks, right . How do i tell the difference between hidden gems and garbage thats cheap for a reason . [laughter] well, jack, there are sometimes you find mine. And one of the things weve been telling clients is this is not an easy call to make, but the harder call, to your point, is how do you express this. How do you get this into the portfolio. Because a lot of these companies arent very leveraged, a lot of them are not great situations, you do have to kind of shade your eyes. And what weve been telling clients is in our portfolio, its a higher quality. Weve been selectively looking for opportunities that are really deep value but have some reasonable qualities. And not so much lower quality. And so weve been finding that with some of your credit card companies, weve been finding that with the home builders, weve been finding that more with your tech and your semi companies versus software. But, jack, thats right. It is a difficult process, and you really have to go sector by sector, stock by stock and look at Balance Sheets and really understand whats going on because you dont want to end up in a story thats overleveraged. Jack carlton . Hi, chris. You talked about having flashbacks to dot. Com era regarding price and valuations. Just curious, are there any differences that youre observing from this time to, you know, the late 90s, early 2000s . There are. So back in the late 90s, the fundamentals and the valuationses, i couldnt come prehelp it. It just didnt make sense to me. Here what were looking at is are the fundamentals are improving or theyre reasonably good. Now what were doing is were arguing about valuations. Val auation high, and really its not we dont see these things as a, quoteunquote, short like back in the late 90s, not as a good risk reward as other companies out in the marketplace. So the big difference is we think that the situation, these stocks will perform and perform okay. Back then these things werent worth anywhere near where they were being priced. Jack thanks a lot, chris. Itll be really interesting to follow this and see if it goes the way you think it will. Up next, round table members give their investment ideas for the coming week. Stay right there. Alike and customize your Car Insurance so you only pay for what you need. Almost done. What do you think . I dont see it. Only pay for what you need. Liberty. Liberty. Liberty. Liberty. announcer reliabi