in-depth sewer vies right -- interviews right here on "the wall street journal at large." in the meantime, thank you for joining us. ♪ ♪ ♪ jack: welcome to baer -- "barron's roundtable." i'm jack howe in for jack otter. coming up, richmond fed president on the central bank's moves to keep interest rates lower and later plunging mortgage rates, the outlook for buyers, sellers and housing stock investors. but we begin with what we think are the three most important things investors should be thinking about right now. as stocks set records, there's a

parade of tech companies announcing plans to go public. what does it mean for the market's next move? if you want to invest in electric vehicles but you're nervous about tesla's high voltage valuations, there are other stocks to consider. we've got the names. and forget for a moment about what a trump or biden election will mean for stocks. i'm worried about the market response to a disputed election. should i be? on the barron's round teabl, my colleagues, ben lev son, carlton english and al root. ben, let me start with you. give me a rundown of what happened with the stock market this past week and with the ipo announcements. >> i don't even know where to start. it was that crazy of a week. but the s&p 500 and the nasdaq both hit records this week, the dow finally moved into the green for the year. and as you said, we're getting ipos. every company you've ever heard of now has a listing out there

of some sort, some sort of filing. there's a company called palin tier which is this secret tech company. they did a confidential filing, now it's a public one. we had a chinese ev company, electric vehicle company, go public this week. it soared. any company you can think of, it's probably -- it probably has an you should po right now. jack: when all these companies want to sell, i worry whether we should be buying. is this a sign of stock market prices looking peaky? >> it's certainly looking frothy. everybody wants to get out there. when you see all these companies rushing to do this when they had the chance to do it before covid and didn't want to, it's got to make you wonder a little bit. jack: i see say peaky, he says frothy. tell me about volatility. you mentioned that the vix is rising kind of in tandem with the stock market. what do you think that means? >> i think it means people are a little bit afraid of some

different things, the election might be one of them. another pick-up in covid cases would be another. and there's always these things that come out. and so it makes a little bit of sense that the vix would still be high. but we have to look back at one of the best periods ever for the market was from 1996-2000, and the vix pretty much remained above 20 almost the entire time as we went into a bubble. i'm not saying that we're there yet or that we're going there, but it's something to pay attention to. jack: let me go to al and electric cars. you wrote recently that the market value for the electric vehicle universe has also caught up with the market value for the entire traditional vehicle universe, which is shocking when we consider that electric vehicles are still about 2% of the market. now, if i look at the tesla's stock, it makes my knees wobble with fear, but you say there are some ways to get involved that are less scary. you like board warner. what do you like about board warner? >> yeah. tesla can be scary for a lot of people, especially for value

investors, a value investor like me. so board warner, you know, this is the classic picks and shovel approach, right? it's a supplier. it makes components for electric vehicles and traditional vehicles. it actually sells more on an electric car than it does on a gasoline-powered car. trades about 12 times earnings, it's a high quality company. magna, the canadian with auto parts giant, they also is have complete vehicle assembly. and with all of these new, hot electric ipos like the one ben just mentioned, they are also in talks to build these cars, these, you know, start-ups that don't have the experience manufacturing cars. so that's two ways to play the unbelievable excitement in ev stocks. jack: borg warner and magna, got it. thank you, al. and carlton, we're at a politic

low, right? the conventions are over, the debates won't start for a month, not much to look at unless you recorded the conventions, you want to watch them over and over again. i am nervous about the election. i'm worried about a contested or disputed result. not necessarily who might win. and i have recently taken some money out of the stock market. i want a second opinion. am i right for doing that? am i i wrong for doing that? what do you think? >> well, or it's definitely a very personal decision, but, you know, there's a lot of reasons to realize that we may not know the outcome of the election on election night, you know? there's going to be a lot of mail-in voting, and this election is looking to be very close. and we know that the market doesn't like uncertainty. you know, when you look at the al gore/george w. bush from 2000, the s&p fell the day after election day. it was down 1.1%. usually the day after the election there's some notable exceptions, but a usually that's kind of a non-event in the

market. the s&p 500 was down 7.8% at the end of the year. jack: you've got me thinking about chads. [laughter] dimpled chads, hanging has and swinging chads, if i remember all of the chads correctly. what would you tell an investor out there? somebody who's nervous about how the election's going to go, just whether we'll know the winner. there might be a delay because there's so many mail-in votes, and, i mean, are politics are so contentious you worry it could turn into a dispute. what kind of investor could ignore that rest is and who might have to take some money off the table if they're really concerned? >> sure. it's definitely a very personal decision. if you have a cash need, you know, looking out 6-12 months, it might be a little time to take a little bit of risk off the table. and also election aside, the market's at all-time highs, so that in itself is a reason to consider doing rebalancing. if you're a longer term investor

not ballooning on touching your portfolio -- planning on touching your portfolio for years, you would stay allocated as you normally would. maybe rebalance, but you wouldn't necessarily use the election as a catalyst to rebalance. jack: thank you, carlton. now, our partners at fox business have a special programming note. please join charles payne on wednesday, september 2 end, at 2 p.m. eastern for a virtual town hall called "america invests together." you can send questions about your investments to charles and his special guests include sports founder david portnoy. message fox business on facebook or instagram or e-mail questions to invested in you@foxbusiness.com. coming up, interest rates may stay low for even longer than you thought. richmond fed president tom c'mon! hurry up!

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♪ jack: on thursday fed chairman jerome powell announced a new inflation policy that would keep rates lower for longer. so why is this important now? joining me is richmond fed president tom barkin. tom, let me make sure i understand this. we were targeting 2% inflation, and now the fed says it's targeting an average of 2% inflation. if i've got the arithmetic right, it means that we can run a little bit above 2 the % if we've been running below it for so long. i mean, basically, that we could keep rates lower for longer while we wait to see what happens with inflation. have i got that right, and why is this important now? >> yeah, thanks. i think you are -- i see this as

a codification of over the last two years. the haas time we revised this document was almost a decade ago, and i think it's good for us to codify e that we have challenged a lower ground, we have challenges on maintaining inflation expectations and making sure you have enough firepower in a downturn. it's good to -- [audio difficulty] overshoots of inflation as we're trying to stabilize inflation expectations. it's good toed codify we don't see unemployment as a problem, and it's good to codify that financials something that we take account of in our policy. jack: okay. i want to -- there's a little sign of consumer inflation, i get that. but there are all kinds of signs of asset inflation right now. i know that's not the main thing you look at, but do you worry that keeping rates for this long could lead to bubbly conditions in the stock market and that

that could eventually hurt consumers? >> well, i hope that wouldn't happen, and to the extent we did suggest that this would hurt financial stability, as i said -- [audio difficulty] but we try to focus on unemployment inflation. and i just say right now with -- [audio difficulty] it's important for us to push our tools as hard as we can. jack: rates have been so low for so long that it's hard for me to even imagine getting back to historical averagings. let's say, let's call it a 10-year treasury yield in the 5% to 6% rage. i mean -- range. i mean, is that something that you think we will ever make our way back to, and what's the scenario under which we could get back to those averages? >> well, you know, you and i grew up in a time with higher treasury yields. i'd also remind you we grew up

in a time of inflation. and so to the extent that longer-term yields -- i'd just make the point that as long as we're successful at keeping inflation lower and stable, you're going to see longer term rates lower and stableler. similarly, when uncertainty about inflation or the risk of inflation is less, we've been able to keep it under -- less of a risk premium, i think both of those are elements to what you're seeing today. i think it is also true that our economy, because of activity, because of lower debt -- [audio difficulty] than it did in the past. i think's part of what we've seen in the last couple cycles. jack: okay. i'm always looking for a better read on the economy, and i know you look at tons of different measures, so i'm wondering if you can share with us one or two that you particularly like and rely on and what those measures are telling you now about the health in the economy and where

we are in the recovery and what the recovery might look like. >> well, this is a unique situation with the -- [audio difficulty] everybody else to focus much more on shorter term metrics, things you can monitor even daily. the couple i look at the closest, first of all, consumer spending is -- of the economy. you know, both debit and credit card -- [audio difficulty] every year. and that dropped sharply in april. it came back up near to year-ago levels, and then it's been flattish. so recovery which was steep at the beginning has flattened and flattened just short of where you might have otherwise expected it to be. the other thing i look at is initial unemployment numbers. like i said, unemployment is a critical part of our mandate, and that's a good weekly indicator of how many people are

newly unemployed. and that number, which was running in the 200,000s before the crisis, has come down from 6 million at the depths of the downturn, but it's still at about a million a week which is at historic levels. jack: okay -- >> so what i take, by the way, or from both of those is we're seeing a consumer recovery slower than you might otherwise want, but it's coming. but i think employment is lagging spending. jack: okay. have to leave it there. tom barkin, thank you for coming by to talk with us. and coming up, why millennials are playing a major role in the housing recovery, and who's in a better position right now, buyers or sellers? the panel tackles that next. ♪

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♪ ♪ jack: am i the only one whose house felt bigger before the pandemic? i'm working mostly from home with two kids who are doing remote schooling in between fighting over the playstation, i've got a barking dog and a stressed-out wife, and i need more space. hey, ben, this is a cry for help. what do you tell me about the health of the housing market for buyers and sellers? >> if you're a seller right now, you're in a great position. people are looking to move. if you're a buyer, it's tough. we have a story this week about the housing market. we've been looking at the data, every number that comes out right now is just incredible. the new home sales, existing home sales, home builder confidence all through the roof, and it's made it really a buyer's -- a seller's market. buyers are in a tough spot. there aren't enough existing homes, and people, most people don't want to move, but there are a lot of people who are looking either to buy their

first home since they're millennials and gen-z and other people who want to move up because they do find they're working from home, and it's just not enough space anymore. we looked at the situation, we think that these trends can continue for a while and keep supporting the housing market. jack: you mentioned millennials. we've got an honest to goodness millennial among us and a city dweller, carlton. i know al told the us because you recently bought your third buick, you're disqualified -- [laughter] i don't think that's true. let me ask you, what's this i hear about millennials moving away from the city? is that just talk? is that reflected in the data? do you think that that's a trend that's going to continue? >> don't knock buicks, they're great cars. the trend to millennials moving out of the city, it's something that naturally happens. everyone still talks about millennials like they're young. well, they're not 20-somethings,

they're turning 40, getting a little bit older, and when people who have been living in urban areas, they start thinking about moving out of the city. they have young families, schooling is a little bit easier outside of urban areas, so we are seeing some of that urban flight right now for millenials. jack: okay. but urbanization's been, like, a 50-year trend or longer, and it's been a dominant force in economics. is this something that just changes that forever? do we move away from wanting to live together in cities, or do we think things will go back to the way they were? >> i think we're looking at a temporary effect. in new york city you're seeing rents hitting nine-year lows, vacancy rates up, but the school year, you know, the students coming in for college, that's a big part of the apartment spend. that's not necessarily happening right now. when we come out of this pandemic and when we return to normal, cities are always going to be a dynamic place, it's just

probably on pause for right now. jack: okay. and, al, talk to me about some stocks. we've got a couple of housing names that got some favorable mention in barron's. what do we like about toll brothers? >> toll brothers, yeah, toll brothers -- ian taylor morrison, the other pick. toll brothers, just like ben was saying, they're a play on upgrading. and taylor morrison, you know, two ways to win with that one. there's the housing cycle which is looking very favorable. they also made a significant acquisition, william lyons, and it was a $2.5 billion acquisition. the market cap of taylor only about $3.2 billion, so big potential there. the entire sector trades at about ten times earning, not very expensive. and then the last thing, you know, toll and taylor have a little bit more financial leverage than peers. that's a good thing in an up market. so that's why we like those two. jack: do you think people think

maybe the strength in the housing market might not last? what do you think the concern among investors? >> the group is very cyclical, right? it's very boom/bust. i i think that's played out over time, so in industries like that where the growth might be, you know, gdp or like the overall economy, you don't get great multiples. but it's always good to buy these sorts of stocks on the upswing. jack: okay, thanks, al. and up next, round table members give their investment ideas for the coming week. stay right there. ♪ ♪ last night's sleep, interrupted by pain?

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barron's round table? it's a trick question, there are never enough. carlton, you like lululemon. tell me why. >> they're totally meeting the moment right now. they're in the midst of acquiring mirror, an at-home fitness device even as gyms reopen, people respect going to be rushing to go back boo them -- into them. they led e in atlleisure, aye got my yoga path pants on, but it's gotten to be a bit more street wear. even as people are returning to the office or going out america they even have products that meet that need. jack: the office was already starting to look like a pajama party, i'm not sure i want to know how casual things have gotten. one question, does lululemon make atl-leisure wear for the let's say male, late 40s working from home? >> absolutely. they have this abc line that has

kind of a more tau houred for, you know, someone such as you described. jack: slim fitting. we're going to have to talk about sizing after the show. [laughter] ben, tell me about starbucks. >> starbucks had some good earnings at the end of july, but it really didn't do anything. all of a sudden it got an upgrade this week, and the stock's moving. i like it because people are going back to school,ing that means more opportunities to stop at a starbucks. i think it could go much higher from here. jack: and, al, you've got a, is this a new york city read thing that you like? tell me about that. >> that's right. our colleague, andrew berry, wrote what i thought was a very smart story. it's the benchmark, i like sl green. it has a new building outside grand central, a little bit higher yield. i will invest in new york. jack: how juicy are we talking about? >> about 7%. jack: thanks, al, carlton, ben. great ideas, thank you.

to read more, check out this week's edition at barron's.com, is and don't forget to follow us on twitter twitter @barron's on. that's all for us. see you next week on "barron's (announcer) the following is a sponsored program for prostagenix, furnished by prostatereport.com. (upbeat music) ♪ hi, this is larry king. over 30 million men in america have prostrate problems. i know, i was one of them. and all these natural prostate supplements like the ones i have here in front of me are everywhere. drugstores, health food stores,