muck we are living in a material world, and i am a material girl ♪ ♪ cheryl: and welcome back. one thing you need to know ahead of next week. get to pay up. the price of love in 2024 may break your heart and your wallet. if a new report says people are shelling out more for their special someone this valentine's day. consumers are expected to spend over $150 on their partner, a spike in the cost of eating out has a lot to do with it. the latest inflation data shows going to restaurants is more than 5 more expensive than last year -- 5%. and that'll do it for us. thank you for watching. we will see you next time. ♪ ♪ ♪

♪ jack: welcome to "barron's roundtable" where we get behind the headlines and prepare you for the week ahead. i'm jack otter. coming up, stocks hitting multiple record highs less than two months into the new year. ed yardeni sees an economic trend that could power the market higher than even most bulls predict. then, toyota may have been right about electric vehicles all along. its stock hitting an all-time high this wreak as it profits off hybrids while other automakers are hitting a roadblock. and later, a tip on how you can play the super bowl as an nervous. but first, our expert panel and three things investors ought to be thinking about right now. on the barron's round teenager ben levisohn, meg an leonard and al a root. ben, s&p 5,000, we finally got there. we know it really doesn't mean anything, but it's kind of fun. >> everybody loves those big, round numbers. i mean, they're big and they're round and they're numbers.

the number i really want to draw attention to is the number 14. that's how many weeks out of the last 15 the s&p 500 has been up. and it hasn't had that happen since 1972. and the market's been able to put together this win streak even though the story keeps changing. the big one is it looks like the fed was supposed to cut rates in march. that doesn't look like it's going to happen a, and it just doesn't matter. jack: 1972 was a long time ago. i wasn't born yet. [laughter] traders have this old expression that knot a stock market, it is a market of stocks. >> stocks were flying all over the place this past week. palantir up 30 after earnings. arm, which which does stuff for chip companies, up 50%. but then you had the eli lilly which was up 10% because everybody seems to want those weight loss drugs that it makes. but on the other side is, fmc which does pesticides, had a problem with weather in brazil, and that stock was down almost 20% but alternatives in general have been good. we're beating by more than we typically beat, and it looks

like we're going to have earnings up about 9 during the fourth quarter. -- 9%. jack: so when tech stocks start jumping ooh 50% in the week, technicals say the market's a little overbought. i think it's wise to get a little nervous right now. are we due for a pullback. >> the stock market can't go up forever. a lot's going to depend on the in connection week. we're looking for economic indicators, we want to see what's happening with inflation. >> i mean, we are getting the cpi this week, so that's an interesting one to watch. apparently, we did get revisions today, and those actually showed that can december still remains pretty calm, and we're expecting that to be the same. jack: hope so. >> and, of course, we're going to look for more earnings. it's not over yet, and we want to see them keep growing. jack: al, disney had a beat. is iger actually bringing disney's mojo back? we've been looking for this moment. >> yeah, i think we'll declare mojo back. [laughter] it didn't go up 50%, but disney up 1.5 -- 11.5% after a earnings. pretty standard stuff.

they did $1.22. analysts were looking for $1. that was good. they raised their dividend to 45 cents a quarter from 30 cents. analysts raised their estimates to the fiscal year with, so everything was, all a signs point to higher disney. swrk cc what's fathering those earnings? -- powering those earnings? >> disney was in a rough patch, right? they're dealing with declines in linear tv. i hate that term. [laughter] and versus the streaming, and streaming's not profitable, you know? this has all sort of been about a renewed focus on costs, how to achieve profitability in some of those new businesses, what they said sort of encouraged everyone. so it's well off its highs, but it's still up about 30% from when our friend picked it. jack: so speaking of streaming, can you tell me what's going if on with this disney-fox-warner brothers deal? i've heard a lot about it, but i've really heard nothing about a it.

what's it called? >> s-tv, sports television, according to one analyst. it's tnt, tbs, it's fox and esp if n all on one sports app. strangely, it is a -- selling you a bundle of channels. sounds a lot like cable, but it's not, it's streaming. apparently, we can pause it, so maybe that's a benefit. if you think about the linear tv, it's gone from $30 billion in revenue down to 10. jack: ouch. >> and so this is the answer of, like, well, if i can get 100 million subscribers and charge them $30 million a month, look, i've restored my business. so that's the potential, but people are just pulling numbers out of the air right now. jon jon real quick -- jack: elon musk going after bob iger. should disney if investors worry about that. >> i've covered elon musk in lawsuits for many years. they typically never become investor-level events. they're more noise. so, yes, people will sue disney. disney gets sued, twitter gets

sued, tesla gets sued, usually just watch items. jack: megan, kind of a more personal note here. [laughter] buying a house. barron's has written that on balance even though supply is tight, interest rates, mortgage rates are still high, maybe it's not such a bad time to go hunting. >> it sounds counterintuitive, right in but actually it is not a terrible time especially if you're actively looking. i, unfortunately, am and i can tell you it's a pretty miserable experience. but mortgage rates are down, so about 6.6, that's off the a high in fall from 7.8. and on a historical basis, that's not terrible. so you do have to the kind of make sure you're keeping everything in perspective when you're looking for a home, certainly making sure you're not only buying for what you need but also potentially for a growth opportunity. jack: ben was quoting sings thins 1973. since then, the average rate was 7.7%, so we're doing better than that. but on the supply side, any new supply coming on the market? >> you know, it's going to be tough. it really depends region by

region. if you are looking in the carolinas, in texas, lots of new buildings going up. but if you're like myself and in the new jersey, new york area, there's just no pace. jackie: -- jack: all right. good luck, meg an. >> thank you. jackie: productivity is spowns bouncing back. yardeni research president ed yardeni if shares his insight plus some of his favorite sectors next a force to be reckon with. no, not you saquon. hm? you! your business bank account with quickbooks money, now earns 5% apy.

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♪ ♪ jack: the pandemic hit the u.s. economy in many ways including the sinking of a productivity boom that was expected to define the decade. now productivity appears to be back on track powering gdp growth that keeps surprising economists. that includes the 3.3% jump in the fourth quarter. joining me now is yardeni

research president ed yardeni. ed, thanks for coming on the show. >> thank you. jack: so you recently wrote that, quote, there's never a dull moment in the highly competitive sport of forecasting the economy. and you should know, you've been doing it brit well for about 40 years including stints at the federal reserve in new york and as a chief investment strategist at deutsche bank. recently, you've been looking at a productivity. can you tell us what you see and maybe just explain its role in determining gdp growth? >> well, productivity is almost like the fairy dust of the economy. if you spread it around and you really have a lot of productivity, there's a lot of benefits. you get stronger economic growth. it all goes to economic growth. and you get lower inflation, wages rise faster than prices, profit margins are up and profits are up. so everybody benefits. it's probably the best variable that you want to root for in the economy. jack: yeah, that does sound like

fairy dust, especially if it can solve inflation. interesting, the formula for gdp is actually very simple, right? it's just labor force growth plus productivity. >> it's that simple. those are the -- that's the supply side of gdp. it can only increase if the labor force that's available is increasing and they're employed and if their productivity is growing. if their productivity's not growing, then you're stuck with the growth of the labor force which is pretty, pretty poor right now. about 1% or less. jack: i want to pivot to bond vigilantes because you, you coined that term. and if productivity is strong enough, maybe we'll grow our way out of this deficit, but it's still pretty ugly. tell us what you're seeing, and are you worried that the bond vigilantes may be needed to come back? >> yeah, i tend to be an optimist, but in my line of work i have to be very aware of what could go wrong in my optimistic

scenarios. so i follow the pessimism very closely there that my best friends professionally, and so i think that the issue there is if inflation doesn't come down, then interest rates will remain up and that'll cause a recession. so what the productivity numbers do is if, in fact, they're going to be showing better and with better growth request, we'll have better and better growth in real gdp. and, you know, unit labor costs which is really the underlying determinant of inflation. and that has ce down rather dramatically because productivity's gone up so much. so last year productivity was up 2.7 on our fourth quarter to fourth quarter basis. the average a growth rate starting in the '40s was something like 2%. so we're already above that, and think we're going higher. jack: all right. so in this scenario, what is the investment playbook, what

sectors do you like? >> technology i think clearly continues to be preferred. but i think that every company's a technology company. you either make technology or you use technology. if you don't use technology, well, you're going to lose it. you're going to be out of business because your competitors are going to use technology to deal with the number one problem that businesses have today, and that is a shortage of labor, particularly skilled labor. and they don't want to get rid of workers, they want to keep every worker or they have. they just want to make them more productivity. they want -- productive. they want to augment their productivity. and by the way, this boom that i see is not related to the way things used to be. it used to be productive was focused on brawn, on sort of augmenting the strength of humans. this is all about a brain. it's augmenting the brain of humans to do work more efficiently, more productively, and it applies to every business that's out there. so every company in that sense is a technology company, but i would certainly have financials

in this portfolio and industrials. industrials are clearly benefiting from the onshoring of technology companies, particularly semiconductor companies. and so those would be the three out of the eleven sectors of the s&p 500 that the i would overweight. jack: all right. we've only got 30 seconds left, so i'm going to pivot to a hallmark of ed yardeni if since the '80s. you've been putting short movie reviews, you like boys in the boat. i love that book. why do you like the movie? >> >> well, it's a classic movie about a coming from behind that's, you know, working hard and surprising everybody by winning because if they all thought you, you know, you weren't going to do that. [laughter] jack: all right. ed, you're been winning for a long time. thanks very much for coming on the show. >> my pleasure. jack: toyota's stock driven to record highs this week as other auto makers hit a bumpy road. why are shares of ford and gm stuck in the slo

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jack: toyota is cruisinginging. its stock reaching a new high as hybrid cars drive record profits. ford, gm and tesla are hitting the skids as ev sales continue to sink. al, why are investors loving toyota but loathing the others? >> well, it's interesting because they all have produced at or near record operating profits in 2023. so the global car market's recovering, everybody's humming along. toyota's stock hit an all-time high this week, ford and gm have basically within unchanged for a decade. jack: so is this an ev versus hybrid thing? what's going on? >> so i think that is -- you might be surprised to find out i'm going to defend electric vehicles to some extent. i think it's more about a

violating the cardinal rule of wall street. ford and gm overpromised and underdelivered. they made big, bold statements about electric vehicle sales, and they couldn't hit them. jack: it was working for tesla, so they thought -- >> yeah. so we'll do that. now, electric vehicle sales in the u.s. were up 46 year-over-year in 2023 -- 46% -- and i somehow that became a disp. ford's pulling back on investments, and everybody's saying, oh, my goodness, what's wrong. toyota, on the other hand, they never said anything, and all of a sudden they produce a record year and people say, wow, that's pretty good. it really is a function of just not saying anything and letting the numbers speak for themselves. jack: so what is the -- which is the future here, batteries or hybrids? >> i mean, the answer is both with, right? electric vehicle sales worldwide, all battery electric up 30% p. hybrid sales in the u.s. up about 30. 30%. the percentage of cars that'll have some form of battery in the

u.s. expected to be about 25% of the market this year. that's split between the traditional hybrids like a prius, a plug-in hybrid and a battery electric car. and what has to happen really at ford and gm, right, they think that people are now negotiating these are just the battery electrics. ford is the number three hybrid producer in the u.s. behind toyota and honda. they also have the number one selling truck, the maverick, and the number one hybrid -- two selling hybrid truck, the f-150. but electrification is going to continue to be a theme for years. >> but, i mean, are americans less enthusiast ec about ev iss because it's become so political? -- enthusiastic? we've seen trump beating up and down on evs and certainly, you know, is there even talking now of reversing incentives? is that really hurting ev sales, do you think? >> the unfortunate reality is that americans view evs

politically. about 70% of democrats who are looking for a car say they're willing to buy an ev is. the number for republicans is 20%. we'll talk the auto extys, i mean -- extives, ben remembers when we were talking to volkswagen saying how do you sell an ev to a republican. no one want toss address it directly. -- wants to address it directly. i would prefer if some of the incentives went away to try and take the political temperature down. i don't see it changing, i see it getting worse going into the '24 election. >> so i know i always ask this question, but i have to ask, are any of these stocks worth buying? fored? gm? -- ford? >> well, we don't buy stocks officially. if it were me, i would buy with ford and gm if over toyota. so toyota trades about 10 times earnings, its best year ever. ford and gm, ford trades below 7 times, gm trades below 5 times earnings. they're at discounts to their

historic valuations ranges. so i would prefer to buy the bounceback in this sector. this is a very tough sector. it's almost like airlines. it's almost not an investment, it's a trade. i would prefer to buy the bounceback versus buying the peak. and importantly, the outlook for cars is not bad. americans are going to buy 16 million cars this year, a little more than last year. that's still below pre-pandemic levels of 17, 18 million cars in the u.s. the business is okay. jack: lower number's actually better because when you -- once you get to 17, 18, lawmakers start incentives. al, tesla is now 193. buy, sell or hold? >> i'm a hold or a nonbuyer. [laughter] right? the problem, tesla even came out in their fourth quarter call and said, listen, we're having a growth problem for a year or two. you know, they've grown volumes at 40% a year for the past few years. next couple of years it's 20% -- jack: and at lower margins. >> and at lower margins.

they need a new model, they need to stabilize pricing, and it trades at 60 times. so it's not -- [laughter] ooh i'm not looking for that to have a great year in '24. when they get the new model out in '25 and we talk about lower prices, accelerating growth again, that's when i'm more excited. jack: 61 times versus 5 times, something's got to give. >> well, it's a function of, and i always say this, you have to remember it is not the same group of investors. jack: sure. >> value investors, talk about general motors, ford, auto market, margins, all this stuff, tesla investors, growth investors comparing it to meta, comparing it to alphabet. that's who the group is. jack: interesting. thanks, al. ben and megan have a pair of investing concepts, and al a says the super bowl is giving inve he hits his mark —center stage—and is crushed by a baby grand piano. you're replacing me? customize and save with liberty bibberty. he doesn't even have a mustache. only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪

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jack: al, a lot of viewers or are familiar with the super bowl indicator, this idea that if an original nfl team wins, that's good for the stock market. i think there had been 14 super bowls by 1978: doesn't work anymore. but you still have an interesting tie-in for us. >> yeah, super bowl indicator not so good anymore but, you know, what do we have? the super bowl is about commercials along with some football. so commercials, we have cars, we have beer and we have snacks. >> and jenna ortega. >> and jenna ortega. so this year i do like using these vents to try and say, wait, is there an idea for me? barron's likes pepsi, and there's really three reasons. one is it was a weak performer in 2013. the stock dropped about 6%. so we like it for the bouncebac- jack: in 2023, right? >> in 2023. i think i said 2016. [laughter] so it was partly the problem of weight loss drugs and ozempic and people wondering if we were

going to stack enough. so andrew berry says that was overdone, cites some analyst. he likes that stock. there's also accelerated earnings growth. they've grown earnings about 5% for the past 10 years, wall street sees that going to 8. that was pointed out by our friend jacob. and my personal favorite, it's a dividend aa risk accurate. it's raised its democrat for more than 25 straight years, so we like pepsi. jackie: jack: and who do we like for the super bowl? >> patrick mama moments. -- mahomes. we'll go with the chiefs. jack: i agree. kelce is like brady or aid edelman or, really sorry, ben, montana, rice. [laughter] quickly, some interesting ideas ideas. megan, you're looking at the 4% rule. good news for retirees? >> it's back. i feel like we've certainly seen in recent years that when we have the interest rates higher and, you know, what not, it has been lore. so argue a by, you needed to only withdraw about 7.8% -- 3.8%

in 2022 -- jack: from your retirement savings. >> 3.3 was in 2021, so now we're back up to 4% according to morningstar. obviously, this is a rule of thumb, you should be reviewing this oz on an annual basis, but otherwise definitely worth pointing out here. jack: all right. ben, you've got a stock pick for us. >> i do. i'm looking at paypal. it's been terrible, apple's taking its business, but literally everybody hates it. and when a stock is hated this much and it comes out and announces earnings that hay hate and announces a plan for the future that everyone hates but doesn't hit new lows, i want to take a new look. jack: there's no one left to sell. thanks, guys. enjoy the game. to read more, read this week's edition of barron's.com. and that's all for us. we'll see you next wee