week are you ready for this nfl season kicks off next thursday with the ravens facing against the defending super bowl champs kansas city chiefs created the cost a bit more to get to the game this year with nfl ticket price is up 9% overall, some fans will have to tack on higher costs another's the detroit lions have the most expensive average ticket in the league the season at $254 while the saints are selling the cheapest on average at $43 we will be following on the sun "mornings with maria" 6 - 9:00 a.m. eastern weekdays on fox business i hope you will join me weekdays right there for "mornings with maria" that will do it for us on fox business. thank you for being with a great rest of your labor day weekend and i'll see you next time. >> "barron's roundtable" sponsored by global x etf's ♪ ♪

>> welcome to "barron's roundtable" where we get behind the headlines and prepare you for the week ahead i am jack otter. it's been smooth sailing for stocks on the back of solid economic data that morgan stanley chris to misuse volatility ahead later price cuts and increase supply have obesity drug market booming, questions remain on who's picking up the tab for the miracle medicine we begin with the expert panel and three things investors on a think about right now on the "barron's roundtable" my colleagues ben levisohn, elizabeth o'brien and al root. the leader stumbled this past week in the market in the troops marched on and it wasn't a bad week. >> this was nvidia and everybody was watching what the earnings will be like in the market freaked out a little bit ahead of it in the earnings came out through the s&p 500 finished the week flat of 0-point to percent even though the stop stock up 6% that's what's going on looking

other things the tech stocks did not do well, the magnificent seven did not do well but energy, financial, material finished higher into ended up a week where the dow was at a high, the nasdaq was down in the s&p was flat. >> the feds inflation gauge came in confirming the story that know it's not coming out as fast as we would like but fairly nice clip that looks good for the market. >> 2.5%, is not to yet but it's heading there in the number that we can see the with the fed is the trajectory and the fed can start looking other things and we have other things to look at. >> there seems to be some debate whether 25 or 50 basis points a quarter a half percentage point. i don't see why they would do a full half that could spook the market but i guess some people think they might. >> there are people and i think the reason partially because you listen to the fed speaker talk in the so-called neutral rate and we reach should be to keep the economy functioning the way

it is don't do harm or juice at all it should be a 4% that's quite a bit higher, you can see doing half a point but i think you're absolutely right people would say what is going on wire they doing this what do they know that we don't. let's talk more about nvidia he said they are good earnings and a lousy performance. literally they doubled earnings a company that huge is incredibly unusual and investors sold. >> the numbers with nvidia are amazing and the stock was down 8% predict a hundred% over the past are 150% over the past 18 months. this is the fifth straight quarter were revenue was up more than a hundred% first time the top 30 billion of the last 12 months just under 100 billion in sales up almost 200% the numbers continually get amazing. it starts to generate the questions of how long this can go on. the one thing that i find

fascinating for companies account for 40% of sales, roughly speaking that is my kazaa, meta, amazon and off of or if you rearrange. 40%, those for companies are going to spend 200 billion on capital equipment basically building the a.i. infrastructure route. that's up fivefold since 2017. the numbers are amazing. >> it may not be sustainable can you see cisco in 2000 and literally the stock is not gone back to where it was on march 31, 2000, 24 years. >> good news bad news. >> wall street forecast forecasting capital spending by the big four and 2025, not yet maybe in 1998 and were not in 2000. cisco in 2000 traded for 20 time sales, this is the bad news. nvidia is trading 20 time sales,

these things can't go on forever but were not saying this is the end the basically people should watch the capital spending level that is being forced to see was happening with nvidia. jack: a lesser name but bigger fall supermicro. >> that counts for 9% of nvidia sales they make servers and it was a short report that came out that question their accounting and the day after they delayed the annual report, the stock was done was 30% is down 65% from the high. jack: a very different subject she wrote an article about a controversial proposal backed by kamala harris to tax alter wealthy people in a different way and set a straight because there's misconceptions about this. >> silicon valley is up in arms about the proposal they say the tech career will stifle innovation, they're having a lot of misperceptions, they're not coming after anyone at this table with unrealized gains of the 401ks.

let's make an assumption, maybe you are a secret brazilian or, if not this is going after people with wealth of 100 million or more it's not the new capital gains tax and what it is is a couple gated effort to ensure that the alter wealthy pay a minimum income tax around 25% and faces long on and the democrats to control the house in the white house about chambers of commerce i'm sorry congress. even if it were to pass, and the legal field that it may not be constitutional and there are other ways to address this issue, the big problem people pay themselves salaries by borrowing against this wealth so it is never actually realized they deduct the interest on that they pay effectively a lower rate or 0.

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>> good sign for the economy for the key inflation gauge coming in lower-than-expected into a half% holding steady from a month ago and 3g i would then

previously reported and higher than the previous court, all of the supports of soft landing thesis in a rate cut in a few weeks, is it too early to be celebrating let's bring a morgan stanley private wealth advisor chris toomey, thank you for coming by the studio you and i took vacation, at the same time as the market really tanked and that it recovered almost all of that since then, what is the good news that is making investors tales wag. >> the good news is economic data like you said coming into the sweet spot of goldilocks we've seen gdp starting to slow down but not slow down too much, we seen inflation coming down to levels that the fed is comfortable with in the fed's market aggressively cuts for the last 18 months. >> incorrectly. and now the data dependent fed with jackson hole is signaling that we turn the page in a place with a comfortable starting rates. >> you made an interesting point with the labor numbers as an employment creeps up the partly for good reasons.

>> out obviously if it's a two targeted pressure on inflation and margins for companies. i think the fed wants to be the situation were the not necessarily to restrictive but not to lose ended environment words to lose inflation continues to rise they cannot necessarily start bringing rates down. >> not all rainbows and unicorns, what keeps you up at night. >> whether the things are starting to see as i mentioned before, were starting see things moderate anyway bad news was good news in a sense if the economy started to slow as inflation started to slow and unemployment started to take up, that gave us an opportunity to cut back on rates, the concern is maybe the fed waited too long and some of the economic data is softening in some of the earnings are starting to soften it i think a real concern are we in a situation where we waited too long to cut and this could be a situation where the economy is not doing as well as we

thought. jack: for that reason your underweight stocks, what area of the stock market are you when and what area do you favor. >> i think we've been underweight stocks for a little while and part of the fact we feel like evaluations are not really that attractive right now, the market has been really driven to the mag seven which is well understood, good part the mag seven has been doing so great from an earnings standpoint and they have been really driving back multiple expansion within the s&p 500. if you look at the 493, 2023 earnings were basically relatively flat, the good news that were seen were in a situation where expectations for the 493 are not really that exciting versus the mag seven which are very exaggerated and in a situation like that we think looking at the market in general broadly speaking you're in a situation where you're probably going to have a flat return for a little while but underneath that there is going to be real opportunities as you

continue to see earnings in the 493 continue to perform in the environment we think that's a good place to be putting money. >> if you have the 493 the equal weighted index rather than the cap -weighted. >> with a focus on quality and defensive, we've been overweight in healthcare in some of the other areas that are actually doing quite well which also may be a concern with regards to the market going forward in as we seen a pivot from technology and the higher data names into the more defensive names. >> i know you enjoy the bond market and higher yields and private credit but before you go i want to ask about the ipo market given how well the stock market has been doing you think a lot of companies will be coming to market but they're not wise. >> is not necessarily a situation where the private market is completely broken we are in a situation for the last ten or 15 years you can underwrite and essentially 0 so now in a situation where the business models are going to change now the interest rate or

at a normalized level read the bigger issue within the private market is the fact that the valuations during the boom after tobin are at very high levels read a lot of the private companies are trying to wait things out hoping that the fed comes in and reduces rates and they can go when you get cheaper financing in order to keep the operations going. i think that is another concern with regards to the market the fact that were not necessarily seen the ipos that you would expect in a market like this. >> you expect volatility between on the

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jack: great news out of the obesity medicine market. investors to ease and manufactures announced price cuts the celebrations may be premature as questions remain over who is actually footing the bill for the drugs, a lot of good news we keep on hearing good news about the things that the medicines can cure coming give us a good stuffers. >> they could but the best thing are the stocks, they keep going up and up, eli lilly is up 700 and something% over the past five years and is partially because the obesity drugs are all that matter they start off as diabetes drugs and now they turn out to help lose weight but they do all kind of other things to. lily came out with data showed that it might prevent type two diabetes but is also been shown to help with sleep apnea, heart failure, addiction, all summers and i'm waiting for it to come out to bring world peace. that would be great, they are fantastic. jack: that said there is a norm is revenue potential but in

order to get revenue 70 has to spend money and it's not clear who's going to pay the very high price of the drugs. >> are trying to come up with new ways to do this. eli lilly came out with a new way a discount version of that bound which is complicated to use but it brings the price down but they're very expensive especially for weight loss and you see a lot of the insurers do not want to pay for it. we have a reporter talk to a hospital ministry or the said there's 40% of patients who should be able to get it that do not get approved and even north carolina public employee health plan stopped covering the drug for weight loss. it would've doubled the premium for everyone it's just too expensive at this point. >> even beyond the coverage issue their concerns and systemically tied drugs renew concern about serious side effects such as suicidal thoughts as a serious side effect. speaking of pain, medicare believe is the largest single purchaser of drugs in this

country it is not clear what medicare's policy will be. >> medicare by law cannot cover drugs for weight loss it can cover weight loss drugs that are proof or other uses such as reducing and preventing strokes and other cardiac events. how this is going to shake out from a cost perspective remains to be seen from an individual perspective and on a program wide level, is going to depend on how we people are proof to take the drug but one estimate a quarter of the obesity word enter medicare population might be improved to ticket, not everybody but is also going to depend on how the part d drug plan covers are they going to cover in not so what coverage to your fix place into a specialty tear it can cost several hundred dollars for the beneficiary. >> recently on the show we talked about hymns and hers that had taken opportunity to jump into the market and create a copycat drug is coming to an e end. >> i thought you were going to ask me if i'm familiar, i'm not

really. this is one of the situations where wall street loves growth they got into the glp-1 business in may of this year and because it's in short supply they find loopholes and able to use the compound pharmacies and sell the patented drugs, people are worried that there is a risk there right now are talking about tens of millions of dollars for company that is supposed to be 1.4 billion, the ceo says the stock would go away even if they come off the shortage list and even if lily and the likes start offering lower prices there will be ways for them to manage that and use this as a growth, i don't think it's a huge risk but it's one of the things that investors should be watching. >> beyond that company there are other players in space other than lily and novo nordisk is a pretty big market who should we watch to get in. >> jeffries had a nice know of other players in the weight loss market, amgen is a giant with glp-1 inhibitor in phase two

trials, before phase three and two others with phase two that are smaller companies structure therapeutics and biking therapeutics. beyond this particular obesity problem, the healthcare industry is really coming back to life in the stock market after quite a few bad years, what is driving the. >> was interesting there hasn't been anything except obesity working but now we see the stocks are actually rallying that a very good three months and is largely because of interest rates come about tech stocks are making money at the need to have access to cash and lower interest rate and the cash is cheaper. that is a good thing. but there are also treatments that are worth watching and other stocks are worth watching and they don't have obesity drugs, one that i like before his gilead sciences, gilead has an hiv treatment that is very big in the business and a new treatment that you don't take is

often which could be a big hit, there's one called vertex which is a non- opioid painkiller which is trained to fill the gap left by the addiction that's been caused by the opioids, there is a lot of stuff out there and because the fed is cutting rates there starting to look interesting and starting to move. >> they will be huge if we can avoid the appeal probl clem's not a morning person. or a...people person. but he is an "i can solve this in 4 different ways" person. you need clem. clem needs benefits. work with principal so we can help you with a plan that's right for him. let our expertise round out yours. your best defense against erosion and cavities is strong enamel. nothing beats it. i recommend pronamel active shield because it actively shields the enamel to defend against erosion and cavities. i think that this product is a gamechanger for my patients. try pronamel mouthwash. [introspective music] recipes. recipes that are more than their ingredients. ♪

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jack: labor day weekend there is a crisp in the air colorado one of a ballgame that means it's time for the barron's fall outlook, what does outlook say. >> the outlook says don't get excited we can get excited about the football games, i'm excited for pro football started the broncos have a new quarterback it can be exciting but for the stock market remember the stock

market went up 80% this year it is not cheap is around 21 times earnings and problematic at the roof the outlook warns it might not be super exciting for the rest of the year. big tech it seems like there is a little bit of uncertainty, the games have been had and we have all the other stocks that look really good but they may not be enough to keep the market going up. of course we have the election coming which could be its own source of volatility out there. he says just be happy if the market can make it through the end of the year it's pretty much flat. >> what does he like within the market. >> let's start with stocks, he likes tech and broad, he thinks that is a chip stock to own. he also likes ge aerospace and trans time and putting them together ge aerospace builds engines for jets and it does parts for the aftermarket ng aerospace is a pic from al and

for barron's and that stock is in the on extremely well he expects it to keep going and nasdaq exchange on the market itself and pet meds company so what is. there is also a couple sectors that he likes he likes utilities in real estate and he also like small-cap he thinks those will be great places. >> a contrarian bet from paul. that's good actionable ideas. you have another one. >> have to send paul 20 bucks for backing the industrial stocks but have another industrial written by a friend jacob sonenshine it's like the pics and shovel play for the a.i. boom, we talked about nvidia things are still good. it makes data centers and service data centers. it trades for 25 times earnings, that's pretty pricey but it will grow at 25% three times faster than the market. it's another way to play the a.i. boom in the good company read the story from jacob. jack: you don't have to bet on

nvidia or the trade if anybody wants to build these these guys might build it. elizabeth your pic comes from the barron's cover story on the high cost of raising children having paid tuition bill i don't know what that is about tell us about the stock. >> it's breaker rise and they provide backup childcare to employees and companies and their clients are half of the fortune 500 companies are their clients and they're not cheaper traded at 35 times next year's expected earnings but wall street sees more upside next year as it continued to recover from the covid slowdown. i say when my kids were younger i used it a lot it's a great company and corporate benefit. >> i use them as well. great ideas from both of you to read more check out this editi that is all for us we will see you next week on "barron's roundtable". ♪