september 2nd. you can send your questions to fox business on facebook and instagram or e-mail them to invested in you@foxbusiness.com. i'll be back next week with more in-depth interviews right here ontreet journal 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. i'm jack otter. ceo daniel shriver on his company's blockbuster ipo. and later, how back to school from home will affect retail, service providers and the economy. but we gun with what we think are the three most important things investors ought to be thinking about right now. the s&p 500 and the nasdaq setting records this week. what's lifting the market and what comes next.

home depot and lowe's reported surging sales at consumers -- as consumers pour money into home improvement. how long can that last in and investors yanked in different directions as the biotechs working on covid-19 vaccines report both good and very bad news. my colleagueses, ben levisohn is, carlton english and jack howe. guys, it's great to be back from vacation. did you miss me? >> absolutely. [laughter] >> this much. jack: more than that. come on, jack, i caught fish bigger than that. there we go. so, ben, good news while i was gone, i guess, the s&p hit new records, nasdaq hit new records. but oddly, more stocks went down than went up. how does that work? >> well, really this is apple's stock market. it went up up 8.2% this week and was responsible for 60% of the s&p 500's 0.7% gain. it's doing all the heavy lifting here, and it's now a $2 trillion market cap stock that makes up for the fact that on a day like

today just over 200 stocks were positive, almost 30 were down -- 300 were down on the day. it's quite remarkable. jack: so what is driving this part of the market? there is no alternative? or is it just the stay at home stocks are where all the money wants to go? >> i think it's a mixture of both. people need to put money to work. the fed has made sure of that, but nobody confident about what's coming next. jobs are not doing great, jobless claims back over a million this past week. manufacturing is decelerating. it's still going up but not as fast as it was from the data we're seeing now, and we still don't have another stimulus plan from congress. investors want to play it really safe, and they're buying things like apple. jack: gotcha. that does make safe. two other things, jack, are lowe's and home depoe. i guess everybody is in the same place all the time, that they want to make it look a little nicer. >> yeah. look, jack, i made a major

investment in my tv background this past week. i know it looks like i've got the same plant and picture i've had all year, but the plant is sitting in a new pot with nice new soil, and it came from home depot. i don't know if you want to call that home improvement, but clearly there's a home improvement boom going on right now. home depot's stock is up 31% year to date. lowe's stock's up even more, 37%. both with blowout quarterly earnings. home depot said its ticket sizes are up creasing, also its number of transactions. people aren't just loading up at occasional visits, they're going more often to the store. and lowe's has been catching up operationally and closing the gap with home depot. you don't have to look far into the question of why. if you look at housing, i mean, starts look good, prices look good, home builder confidence looks good, sales looks good. so the housing market is strong, but you're absolutely right, people are looking for a situation saying i'm locked at home for longer than i thought

working right now, i better spend some money here. jack: of course what we're all hoping for is a vaccine that'll let us get back to our normal lives. for these companies will good news be bad news? >> i think the housing numbers have been strong enough that the results continue, but i would say if you're out there as an investor and you're waiting for a vaccine, like a cruise line or a movie theater stock, think of a home improvement retailer as a hedge. if that doesn't work out because we stay locked down for longer, we're going to keep spending on our homes. jack: carlton, you had a thought on this topic too. >> yeah. so we got a lot of good news on the vaccine front, pfizer and bion tech reported positive early data, and we could see regulatory approval as early as october. and then there's, you know, johnson & johnson with its vaccine trial, german biotech firm recently went public and is in talks with the european commission to sell 225 million

doses of its potential vaccine candidate. so that's just a handful of a number of companies that are, you know, working on vaccines and, you know, may have some good news to report in the next few months. jack: obviously, we're all hoping for a vaccine. there is some money to be made there. but an interesting dynamic in this industry is that solving something like covid-19 is not where companies make the bull of their money. they need to have a pipeline for diseases that'll be around for a while, to be frank. how is that looking non-trade, i guess. >> right, and that's what's frustrating from gilead, the company that has remdesivir for covid. before remdesivir, the company had really been struggling because it hadn't had that blockbuster drug since it had a treatment five years ago. and that's the thing, you know, as you noted, covid treatments and vaccines won't be those blockbuster things, but, you know, this pipeline that these

companies have, there's been some bad news on the other drugs, you know, for other diseases occupant there. so for gilead it was their arthritis drug that did not get fda approval. jack: an interesting dynamic in the industry, the etf idp which is capitalization weighted has done okay, but xbi which is equal waited and emphasizes the smaller stocks has done a lot better and that's because i think a lot of these smaller stocks are seen as takeover candidates as these bigger companies try to juice their growth. coming up, how lemonade aims to completely change the way you think about your insurance

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crop of ipos this year, insurance start-up dem -- lemonade seeks to solve problems, and investors have sent shares up from $29 to a high of 96 before selling around $60. joining me now, ceo and cofounder daniel schreiber. thanks so much for joining us all the way from tel aviv. i want to start with this idea that insurance salesman is up considered to be a we scoretive, and it's that trust gap that your business plan sets out to close. >> yeah, absolutely. so the traditional insurance model is kind of come into town and build the tall est sky scrape, think about the metlife building in new york or others around the world. project your final prowess in the -- financial prowess in the hope that people will be cowed into trusting you. [laughter] that's not how trust built, and people distrust insurance companies not was they don't think they have the wherewithal

to pay their claims, but they don't have the will to pay their claims. we've tried to change the model that we never deny money, that leftover money goes to charity. jack: can you explain that dynamic? so when i don't want -- when i file a claim for the actual amount of the loss and i don't embellish it, i know that extra money doesn't go in your pocket, it goes to the charity of my choice. >> that's right. we kicked off lemonade by speaking to nobel laureates in game theory e and behavioral economics and figured out the problem wasn't the players. my moral fiber's in no way superior to colleagues in other insurance companies. the problem is the game, not the players. and if you have incentives misaligned, if i make money by denying your claim, then you're going to distrust me, and i might be tempted to deny your claim, you might be tempted to embellish it, and that spirals. we take a flat fee, 25 cents,

the rest is going to pay your claims, and if there's money left over, it goes to a chair tiff of -- tearty of your -- charity of your choosing. you're less likely to embellish if you know you're hurting a charity that you care about rather than an insurance company that you really don't. jack: and many aspects are different from traditional insurance companies. you built it from the ground up. can you give us one more example of why you are so different? >> really the whole thing was built from a technology sub strait. myself and my cofounder are newcomers to insurance policy, so we built everything on a. i. and bots to that you buy insurance in 90 seconds, that's the median time to buy insurance. so during a commercial break you could start the process, you'll have it complete before the program has returned to normal. and we also pay claims the same way. you have a bot that will talk to you, and about a third of our

claims are paid in less than three seconds. so pretty transformative, that slashes costs. it means for many customers the costs can be half of what it would be with a traditional insurance company, in addition that it generates just incredibly power and the core of insurance is data to price and underwrite risk which we think these new data structures and being built as a tech company rather than a traditional insurance company allows us to transform the plumbing of the entire sector. jack: now like others, you invest part of the premiums, and you pay claims, but even your investments process is a little bit different. can you explain that? >> well, you've got i believe the only insurance company in the united states to say that we will not invest premiums in heavily-polluting industries. and beyond trying to do the right thing, we just found when we got into the sector we found it kind of unbelievableful that insurance premiums that you're

paying somebody to protect your health or your life or your property are being invested rather in the very harms or industries that generally the very harms against which the insurance companies are meant to protect you. so so climate change can affect your home insurance, you know, flooding and fires and everything else. and air quality will affect your health is and your life insurance. so we are the only insurance company that we invest the premiums in good rather than investing them in the kind of industries, the kind of companies that can cause the very harms we purport to protect you from. jack: now why is this -- it make sense on one level, but why is it actually good business? >> i think a lot of the things we do at lemonade are enlightened self-interest. we spoke earlier about how if there's money left over, we give it to a charity. in fact, just a couple of weeks ago we gave back over a million dollars to 34 charities of our customers' choosing.

that's about ten times more charitable giving as a proportion of revenue than traditional fortune 500 companies much bigger than us would give. and we think of that as really solving the trust problem that you spoke about earlier and aligning interest with our customers, and that generates very rapid growth when customers trust you. they behave better, claims behavior is better, brand loyalty. loads of goodness. so on the one hand, we're being charitable, but we think in the long term that builds better brands, better experiences and lowers costs. the same thing, i think, is true in terms of investing in coal. ultimately, insurance is the business of trust. you give me premiums every month, and you expect that i will be there for you in your hour of need. that trust breaks down all manner of ills plague the entire sector, and if we can invest the relationship with trust and goodness, then i think we will be repaid for that in spades in the years to come.

jack: really interesting project you've got going there. good luck, dan yell, thanks so much for joining us. >> thank you. jack: coming up, for millions of students across the country back to school now means logging in from home. how this major shift will impact businesses and investitititi businesses are starting to bounce back. but what if you could do better than that?

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you. >> yeah, exactly. our school's given us our plan, and we're going to have kids in school half the time. it's going to be great. jack: yeah. that's same thing with us. the other half of the time that means they will be under foot, and you and i and hundreds of millions of other americans will be trying to work in that scenario, and as your story shows, it's just not going to work out quite the way it does in normal times. >> right. i mean, my colleague looked at the impact of back to school this year on the u.s. economy. normally this is a great time for retailers, schools are a big contributor to the local economy through the money that they have to spend fors services, but the biggest thing this year is just going to be the impact on u.s. productivity. because our kids are going to be home, we're going to get what's done. we're going to have to be teachers as well as our normal jobs and that could impact as much as $56 billion a month. and to put that into perspective, that's a little bit more than 2% of the u.s. u.s. g.

it's a pretty big hit. so we're going to all have to learn how to do this better x it really means every day a child can be in school, it means we get a little more of that productivity back, and it helps the economy a little bit more. that's not how we should be thinking about this, obviously. we need to be thinking about this first, but it's a way of thinking about a potential impact as we go back to school. jack: and long-term implications will be interesting too. i hope they can all catch up, but they are losing some school time. immediately, carlton, we can see an impact to the stock market. >> absolutely. and in terms of importance, the back to school shopping season is second to holiday season, accounts for about 15% of sales for a department and other kind of specialty retailers. we're seeing back to school shopping for new clothes the probably not happening like american eagle and gap. but then school supply shopping isn't really going to be the same. kids aren't going the need one set of items to keep in their backpacks or lockers and another

set for home. so you're going to see brands which make a lot of school supplies suffer. even the big box retailers that have been doing well, the targets and retailers, have noticed their back to school spend, they're really not seeing the same level of sales that they have before. jack: and, of course, we've got some winners here. i suspect i'm not the only person who just told my 16-year-old daughter, okay, go ahead, we'll buy you that new laptop. so a few stores are doing even better. >> yes. a few of the stores that might be doing a little better, you know, your best buys and, again, you know, the targets and wal-marts are getting some of that spend. the ore interesting dynamic is the servicing aspect for the schools, and these are areas that respect going to be doing as well. your aramark, the kids aren't going in, that's going to be an area that's going to suffer. janitorial services for schools, again, you're not going to have students there, they're going to

take a hit. so it's a tough time. you know, we even looked at a company like bluebird which makes school buses, what's going to happen there and some of these companies. jack: indeed. past the school bus era, jack, of course, it's college time. and you see a real reckoning for the college industry, the four-year college industry as a result of this crisis. >> yeah. i mean, if you missed freshman orientation this year, i can tell you that the dining hall and the recreation center -- [inaudible] because of the pandemic. i think that's really driving home when you take away all the extras and look at just the course information, i think it's causing families to think carefully about what they're paying. schools like harvard, they're not giving a price break at all, it's almost $50,000 a year even without room and board, and prices have been is spiraling out of control for decades. i spoke with a finance professor at nyu and a real expert if on

valuations. he says there's a reckoning coming right now while people are paying attention to this. he said the harvards of the world might be okay, but some of these less prestigious colleges will suffer. if a kid came in and said xyz state university has accept me but i have to pay $40,000 for the next four years, economically it makes absolutely no sense. you can hear the whole conversation on my barron's street wise podcast this week. jack: that'll be cool. and it really is fascinating, the third tier schools may not have reason to be in business, and harvard, why can't they just stream everything and educate a lot more people? something to think about. hey, can i... hold on one second... sure. okay... okay! safe drivers save 40%!!! guys! guys! check it out. safe drivers save 40%!!! safe drivers save 40%! safe drivers save 40%!!!

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♪ ♪ jack: jack, tesla shares just seem to have nowhere to go but up. in fact, if you took the total value of gm, ford and fiat chrysler and then multiplied that by four, you'd have the value of tesla. what's up with that? >> yeah. i mean, if this year is a bit of a financial freak show already, i think tesla is the strong man, the fire eater and the bearded lady combined. [laughter] the stock is up, it's multiplied nine times in price in just a year. you mentioned the comparison with car makers, it's very valuable than wal-mart -- more valuable than wal-mart. our colleague al root points out it's more valued about $10,000 for a car, i think the one thing that stands out is remember the famous 4/20 tweet when elon musk said he was thinking about securing $420 a share, it didn't

happen9 and the stock tanked? there's still lawsuits going on about not being able to deliver on that 420 even though at this point the actual stock price is more than four times that. jack: that's incredible. carpalton and ben have some -- carlton and ben have some stock ideas for us. i'll start with you, carlton. >> taking a look at whirlpool this week. we got great housing figures for the month of july, so whether it's renovating or buying new homes, there's an interest in appliances. company's in a good position, and it's filtrating below market multiples. jack: and, ben, you found something a little cheaper than tesla in the automobile industry. >> that's right. al root decided that gm the next stock, probably worth as much as the stock now. so if you could find a way to up lock that, it could really talk it off. jack: ev means electric vehicle. thank you for that. thank you, ben, carlton and

jack. to read more, check out this week's edition at barron's.com. don't forget to follow us on twitter. that is all for us. stay healthy, wear your masks. we'll see you next week on "barron's roundtable." "barron's roundtable." ♪ ... ♪ ♪ dr. youssef: remember the passover. remember the crossing of the red sea. remember the crossing of the river jordan. remember, remember, remember, it is the theme of the scripture: remember the past faithfulness of god in your life.