government does the job for them. well, that's it for us this week. be sure to follow me on twitter, facebook and instagram. and i'll be back next week with more in-depth interviews right here on "the wall s at large." thank you for joining us. ♪ ♪ ♪ jack: welcome to "barron's roundtable" where we get behind the headlines and prepare you for the week ahead. coming up, sir martin sowell on the shift to digital and what's in store for his growing media empire. but we begin with the three most important things investors should be thinking about right now. tech ran into a brick wall this week despite strong earnings reports from microsoft and tesla. what to expect from apple, amazon, facebook and alphabet next week. chevron makes a $5 billion deal to take over noble energy. what we're 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 covid-19 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 wasn't 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 7-footer at point guard, and it didn't 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 couldn't 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 we'll 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 stay-at-home stocks but not the way that we first thought when this began. you're 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. that's new. >> that definitely is new. and the big news this week was not only chevron's 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 hasn't happened yet because, you know, the well-heeled companies are going to want to conserve cash, and then they're going to be a little bit more cautious about acquiring some companies that might have a hefty debt burden. what's interesting about this chevron deal though while it's acquiring noble, for chevron, you know, it's a minimal amount of debt that it will be taking on. but noble will actually help chevron to sustain its dividend because of, i'm 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 covid-19. the race for a vaccine is on. catch us up on that. >> well, look, i've 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 there's going to be a vaccine ready either late this year or the first month or two of next year. that's a little bit of a faster timeline than we had first heard, so that's 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, final-stage research on their vaccines.

so that's all promising. the other thing is i've been wondering what happens when we actually get this vaccine? we'll probably give it first to front-line 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? there's a report from bernstein research that caught my eye, it was titled could anti-vaccers sink the recovery? what it concludes is there's a lot more people who, e press misgivings about vaccine than who actually avoid vaccines. so in bernstein's words, the vaccine hesitancy is probably not a material risk. i think that's more good news. jack: i sure hope not because, yeah, that could be painful if people don't take it. coming up, sir martin sowell coming up, sir martin sowell on whether it's safe to if your gums bleed when you brush you may have gingivitis.

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safe drivers do save 40%. click or call for a quote today. ♪ ♪ jack: the covid-19 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 "barron's 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 pre-existed covid have accelerated. how is that affecting your world? >> well, it's affecting it in three ways, jack. the first, obviously, consumers. consumers are shopping online, they'ringing the kids online -- educating their kids online, their health care services, your insurance services. so that's one. and we communicate as we're doing now online. the second is the media. as you well know at barron's 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. it's been a $500 billion industry, and digital this year will be at least 250 billion. we forecast by 2024 it'll be two-thursday of the market. so it's 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. that's going. so that's 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. that's true, probably overly provisioned. but basically we're seeing a real blood bath in q2 in terms of results. so the status quo is blown. there's 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, covid-19 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 what's happening to free to air television, look what's 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, it'll be much less. whether they'll 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 don't 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 15-20 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, who's 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 don't think it gets you very far at the end of the day. these platforms will continue to dominate, they'll 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 we're seeing around facebook. i'm not sure that's the right way to deal with the platforms. but what's happening is they are becoming more responsible. for example, facebook have had 35,000 the people to monitor editorial content. they've tightened up their algorithms, they've 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 they're not doing enough. can they do more? and really importantly, are they a media company or a tech company? >> well, i've always believed, jack, that they are a media company. they always professed to be tech companies, i think that's the heart of the issue, and it's a really good question. the heart at this point is whether they're media or tech companies, and i think they can't claim to be sort of digital engineers tightening the digital nuts of their digital bikes. they are responsible just like you are at barron's 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 threat's there and it's almost unsaid, but it's -- that's far more powerful and much more powerful to have private conversation. dealing with the chinese. don't 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 don't 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 ta-da! did you know liberty mutual customizes your car insurance so you only pay for what you need? i should get a quote. do it. only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪

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♪ ♪ jack: as we move closer to a covid-19 vaccine, how are investors responding, and how will the market react? head of ec equities strategy christopher harvey joins the round table. chris, it's great to have you here. obviously, the story of this market has been tech, tech, tech. you see a continuing melt-up 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 we've been talking about go big or go home, right? we moved up cap over the last 12, 18 months. but what we're really seeing the opportunity as we go forward is down capitalization, your smaller cap, more suckly call companies -- cyclical companies. what we've been saying is there's not enough value in value. well, after the selloff we had back in march, we're now seeing a opportunity of value. and that's 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 haven't 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 covid-19, that stay at home tech play will continue. >> that's right. covid-19 is the wildcard. but one of the things we've always a claimed and one of the things we've 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 don't 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 don't 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 it's 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, i'm glad the thing to do is not just put it

all in tesla and forget about it. [laughter] if i'm looking at some of these value stocks, right? how do i tell the difference between hidden gems and garbage that's cheap for a reason? [laughter] >> well, jack, there are sometimes you find mine. and one of the things we've 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 aren't very leveraged, a lot of them are not great situations, you do have to kind of shade your eyes. and what we've been telling clients is in our portfolio, it's a higher quality. we've been selectively looking for opportunities that are really deep value but have some reasonable qualities. and not so much lower quality. and so we've been finding that with some of your credit card companies, we've been finding that with the home builders, we've been finding that more with your tech and your semi

companies versus software. but, jack, that's 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 what's going on because you don't want to end up in a story that's 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 you're 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 couldn't come prehelp it. it just didn't make sense to me. here what we're looking at is are the fundamentals are improving or they're reasonably good. now what we're doing is we're arguing about valuations. val auation high, and really it's not we don't see these things as a, quote-unquote, 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 weren't worth anywhere near where they were being priced. jack: thanks a lot, chris. it'll be really interesting to follow this and see if it goes the way you think it will. up next, round table members give their at fisher investments, we do things differently and other money managers don't understand why. because our way works great for us! but not for your clients. that's why we're a fiduciary, obligated to put clients first. so, what do you provide? cookie cutter portfolios? nope. we tailor portfolios to our client's needs. but you do sell investments that earn you high commissions, right? we don't have those. so, what's in it for you? our fees are structured so we do better when you do better. at fisher investments we're clearly different. that's why i've got the power of 1,2,3 medicines with trelegy.

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♪ ♪ jack: jack, a year ago this month i had lunch with a leading light at sustainable investing and sat down only to find out he's on the pay. [roll roll of philip morris. [laughter] >> they have a device, they're

trying to switch cigarette customers to it. as you know, jack, i am an ethics expert, and i believe the way you measure morality is how many pages a company can fill in a report describing its ethics-driven activity in the year before. philip morris' report has 192 payments, 54 more than its annual financial report. it's almost double unicef and the american red cross' report combined. that's pretty holy, jack. jackie: maybe it's an inverse relationship. speaking of healthy things, ben, what do you have for us as an action able idea? >> mcdonald's is looking interesting. now that people can drive their cars through the drive-through, should show up when they report earnings next week. jack south carolina and, carlton, finish us off. >> looking at big lots. it's a may on the stay at home play and an activist has helped it along so far this year.

jack: great ideas. fascinating, as always. to roadway more, check out this week's edition of barron's.com. don't forget to follow us on twitter. that is all for us. be healthy, wear your masks. ♪ >> from the fox studios in new york city, this is maria bartiromo's "wall street." maria: and happy weekend, everyone. welcome to the program that analyzes the week that was and helps position you for the week ahead. i'm maria bartiromo. thanks so much for joining us this weekend. coming up, allianz chief economic adviser mohamed al-arian to discuss his op-ed on the u.s./china rivalry. later, my one-on-one with florida senator marco rubio on the closing of the chinese consulate in houston this week along with the stimulus package, the next relief. "the wall street journal"'s ted