Thank you so much for joining us i hope you have a great rest of the weekend and ill see you next time. Barrons roundtable sponsored by global x etf. Welcome to barrons roundtable where we get behind the headlines and prepare you for the week ahead. I am jack otter. Inflation lived in this Federal Reserve stuck on hold. Andy capron tells us what higher for longer interestrate means for your money. Then we have the latest big money pull out of professional investors. Senior writer paul will dive into what theyre bearish on way Earnings Growth is lower than what you thought. American automakers have much better earnings season than the european counterparts. We begin with the expert panel and what they are to be thinking, ben levisohn, Megan Leonhardt and al route. Then, it was not a great week in the market then we got the goldilocks jobs number that pleased everybody. It was a really decent number at first glance, disappointed but it was the 175,000 jobs which is a pretty nice number under most conditions. Then you look at wages, average Hourly Earnings went up but pretty benign and everybody in the market is going up, treasury yields are coming down it was the kind of thing that they wanted which is a real change from earlier in the week where it seemed like the market was able to freak out about everything, employment cost, index, the market dropped there is a lot of selling going on at the close not a great market but the tone completely changed by the end of the week. Jack use all trading activity throughout the week that bothered you can you explain. At the end of the day on tuesday and wednesday the stock market dropped on both days. 6 in the last ten minutes, one day of that in the last ten minutes is rare but to do it twice is only happened ten times since 1985, it usually happens in times of crisis, happened four times during the financial crisis, happened in 1987 and 2018. This time theres no crisis in the market is not in a correction or anything. It makes you wonder is the market down and have to be a buying opportunity, maybe that was the selling that causes the market to go up. Jack look at your crystal ball, what you see next. Im watching the 50 day moving average, this is technical indicator that really says what the shortterm trend of the market is, right now were below that and just below it on friday, i would like to see us get above it and until we get above the index and average on the s p 500 i think you have to be a little nervous that the market might selloff again. Jack i have a question for you what you meghan and harry have in common with 3m. I dont know. This is a surprise. The following aristocrats. Oh my goodness, that is genius im in a use at home, 3m has raised its dividend for 64 consecutive years to be a dividend aristocrat, im struggling to recover yet to reach her dividend for 25 years they announced the reset there coveting their dividend is artificial but the numbers that they use imply will cut their dividend by 50 it is a sad day in the root household, my kids care about these things i promise but it was really good the stock is up 6 on the week after announcing the cut, they have been dealing with tens of billions of legal liabilities over the past few years related to chemicals in peoples water and related to faulty earplugs sold to the government. Really taking your medicine a people can invest in the stock on a go forward basis. Jack alphabet announced dividend you think amazon should to. We set it late last year the amazon, google parent alphabet and meta should pay dividends, it is time, google and meta have made the leap and were helping with amazon earnings they will do it but they did not. Jack when you announce a dividend that implies the growth days are over that is not the case with big tech as we just saw. This week was that weird when we had Apple Earnings and investors were very happy with the massive 110 billion buyback and obviously that makes people happy but interestingly we still fall sales of the iphone got 10 yearoveryear and revenue down a little bit and sales in china were ahead of analyst analysis forecast, still less than a year ago, there was interesting things obviously the news everyone is watching for was a. I. Tim cook did not exactly deliver attentive details there. It is interesting we will see a little bit of movement there were good to get the new ipads next week and i think the good to get into the details of the Worldwide Developers conference. Hopefully will see strategy with apple and a. I. Its interesting my colleague alex is bullish on this he was saying the apple could be the next big a. I. Winner because theyre involved in so much of our daily lives. Hes been a longterm bull, so far so good a. I. Is clearly part of the powering behind alphabet in amazon, microsoft, theyre benefiting the cloud services. In the chipmaker department its part of the mix but not always positive. Its interesting we had a lot of the chipmakers announced this week, we certainly saw volatility there, but advanced micro devices, amd, supermicro computer, yet semi conductor, all of them reported at the beginning of the week, i think they had some issues with some of the market headwinds that we saw a lot of stocks dealing with but they have bounced a little bit amd is an interesting play while it did beat on the earnings, investors want to see a blockbuster quarter they did not come away with a lot but it was interesting but they did see some real growth in their data Revenue Services or the data center revenue. Jack thank you for that, rates expected to stay higher for longer, weaker u. S. Data could have renewed overheating, andy kapyrin gives his outlook installed inflation progress no, my dentures uncomfortable dracula, lets fight back against discomfort. With new poligrip power max hold comfort. 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Dont let a break put you on a shelf. Talk to your doctor about building new bone with evenity® before the year is over joining me andy kapyrin a partner and independent Wealth Advisory firm managing 150 billion, a lot of growth over the years since ive been talking to you guys and regional antic. The mantra on wall street has been a higher for longer, you tweaked that a little bit and you see later and less. Is the distinction, the first one will be entered the sheer there was expectation of a lot of fed cuts and also for them to be frontloaded or to start much sooner in the year. Jack six, three, one. Now to potentially none my prediction is later in the sense that is likely to happen all the way toward the end of the year i think december is the most likely because at some point as we start summer it gets too political to do an aboutface on Monetary Policy in the face of an election i feel like december is the most likely timeframe that my most important point is less i think many investors are used to low Interest Rates and have not adjusted their idea of a terminal or normal fed funds rate from 0 , they might be anchoring to Something Like to in my opinion we see uptight economy that is naturally undersupplied naturally undersupplied with labor in particular and i think its possible for the fed funds its something closer to three, three and half maybe even 4 . Jack which is how it was decades ago, lets talk about tech investing im sure your clients are clamoring for it get me into the a. I. Stuff. If your typical american investor you have a. I. In spades, if invested in s p 500 any largecap active management you are likely to have the leaders in a. I. In your portfolio, nvidia, microsoft, google among many others. They represent high double digits in a typical portfolio, what i tell them you already have it i dont think it is a bubble and what i dont think you ought to do is look farther afield from the leaders, here is why, when i view Artificial Intelligence as a super capitalintensive endeavor the company with the most Free Cash Flow to throw at this and take a few years to realize a profit are already the biggest ones i mentioned. Amazon is adding more and not everyone has 2. 5 billion sitting around. The other point i would make into the benefit of u. S. Investors that the ip market is close to the a. I. Frenzy because usually the ipo market in my view sometimes incorporates speculative businesses that have a very long time to maturity and the very high upfront cost market, i think it would be hard for startups to get their foot in the door and become dominant. I think its been to the benefit of investors that the ipo market has been closed in my partial worry over the coming months because of a bull market index hitting highs with relatively low volatility that starts to change and investors get exposed to some of the more speculative frenzies. Jack news for the investment tanks but good news for your client. Lets talk about Foreign Investment weve always been saying you have to diversify overseas, back and savior portfolio but recently it looks like the s p is where you want to be, what is your take on that. A couple of interesting points, last year 2023 i think a lot of people saw a dominant u. S. Stock market outperformed other global averages which is true but heres a little rub the average american stock did worse than the average developed u. S. Stock and it was all about the a. I. In the mag seven in the u. S. Driving higher index average, exu. S. Stocks are doing well its getting lost in the shuffle. The other point i think a lot of investors are used to thinking about International Developed markets as banks, insurance companies, oil producers, low profit margin commoditize businesses, i dont think that is the case anymore, Large Business in western europe is a copy that makes weight loss drugs, some of the largest producers of components for the a. I. Revolution, the Semiconductor Manufacturers are based abroad in taiwan, japan the netherlands and something that europe has in particular that the u. S. Does not, dominant consumer luxury brands. Jack they do luxury well in europe. Jack indexing or active management for foreign stocks. I think when you invest in foreign stocks, indexing is a better way to go because youre capturing all of the market dynamism and you dont have to worry about the select activity, the diversification is worthwhile. Jack andy kapyrin thank you for your insights. Jack the biggest Money Managers to advance the future of golf, pga of america chose tmobile for business. With a 5g powered Innovation Hub to analyze player performance and expand coaching tools. Take your business further with americas largest 5g network. When you own a Small Business every second counts. 120 seconds to add the finishing touches. 900 seconds to arrange the displays. If youre short on time for marketing constant contacts powerful tools can help. You can automate email and sms messages so customers get the right message at the right time. Save Time Marketing with constant contact. Because all it takes is 30 seconds to make someones day. Get started today at constantcontact. Com. Helping the small stand tall. I couldnt get my hair done. Then psoriatic arthritis. Cosentyx works on both for me. People with psoriasis on the scalp have a 4 times higher risk for psoriatic arthritis. Serious allergic reactions, severe skin reactions that look like eczema, and an increased risk of infections, some fatal, have occurred. Tell your doctor if you have an infection or symptoms, had a vaccine or plan to, or if ibd symptoms develop or worsen. Still workin for me. See me. Its been a rocky month for stocks all Major Industries down there and pulled more than 100 biggest Money Managers on how the deploying cash now. Bearing Senior Writer is here with us to discuss, good story paul, investors certainly have a wall of worry to climb. You have inflation stubbornly stuck above 2 , evaluation look a little bit stretched in a month ago or six month ago i think a third of the pulled were optimistic, more than half were bullish this time around, what is the difference. I think investors are excited about Earnings GrowthGoing Forward there is a hope that inflation pressure will start to recede, that should lead to higher Consumer Spending higher corporate spending and youre starting to see a broadening out of the rally, big tech is still a major contributor of Earnings Growth and hence the stock market increases that weve had this year, the Money Managers are finding other opportunities outside of tech. Now the Interest Rates have normalized, cost of capital has a cost so the theory was that you move away from tech and into other parts of the market, yet a great observation from scott block a member of the og bearings roundtable and he said if you strip out the magnificent seven, firstquarter earnings look like theyre going to be down 6 , why would you want to do diversify. Is a great point its troubling that so many of the market dominance is the seven companies with their strong Earnings Growth particularly nvidia the hope is as the year progresses youre going to see a widening out and have more companies in other sectors start to produce a pay period that is why you have the respondents of the poll they think the Earnings Growth is good to be 12 for the full year which is a little bit higher than the Consensus Forecast and its not just tech that is doing it. We cant just be long tech, what other areas should i be in. Energy is an area where a lot of people are enthusiastic the hope that oil prices will rise a little bit whether or not that is supply issues because of geopolitical or hopefully about rising demand because the economy is holding up thats why you see apache average predicament as well like chevr chevron. This week was obvious at the Federal Reserve policy meeting they were clearly installed inflation and hold rates higher for longer. What strategy makes sense in this environment. If you look at concerns about higher rates for longer my colleague did a story about the barbell approach that you can have for investing, one side you want to have cyclical stocks and balance that out like utilities and bonds in the middle the cyclical you can of nascar, and Infrastructure ConstructionCompany Getting more into electricity and renewables, united rentals, company that rents out dump trucks, thats an area that could do well and acquitted is another company that could be a sleeper play on a. I. Because this data centers. In the middle of bonds talk about equities being down monthtomonth what we do with fixed income even the rate environment. With fixed income give shortterm treasuries that make more sense on longer Term Duration duration duration thats with fixed income people shout about give a Corporate Bond intermediate from vanguard and shorter duration and if you want to take higher risk yet senior loans as well leverage loans Ticker Symbol bk ln, that is not brooklyn. 8 is the yield so you get yield with utilities and you also get the other end of the barbell you have energy and duke that are yielding over 4 there are a lot of yield place and secure parts of the market like utilities and bonds. Jack in 30 seconds before we go, this is the smart money that were talking to but the same time when more people on wall street are bullish that can be a contrarian warning sign you want to buy when nobody is bullish, are you worried about this. I think people are a little worried but also we are climbing the wall it is cliche but i think there is a certain grain of truth, there is a lot of things for people to be nervous about but that doesnt mean the stock market has to go down. Jack once nobody is nervous theres no more buyers, thank you, ben has a stockpicking next, meghan will keep you out of trouble with the irs and al explains aut Liberty Mutual customized my Car Insurance and i saved hundreds. Thats great. I know, ive bee telling everyone. Baby liberty. Oh baby liberty. How many people did you tell . Only pay for what you need. Jingle liberty. Liberty. Liberty. Baby liberty. Choose advil liquigels for faster, stronger and longerlasting relief than tylenol rapid release gels because advil targets pain at the source of inflammation. So for faster pain relief, advil the pain away. fun music mom, can i help . Camping was fun, but it looks we brought the woods back with us. 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