that residents of all colors want safety, not lawlessness, in their neighborhoods. black lives matter, and they deserve police protection. well, that's it for us this week. gerry baker will be back next week with more in-depth interviews right here on "the wall street journal at large." thanks 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. mohamed el-erian says the federal reserve may be too optimistic that rising inflation is under control. how long it could last. and later, next generation value managers are finding opportunity in unlikely places. we'll get stock picks from jpmorgan's claire hart. but we begin as always with the

three most important things investors should be thinking about right now. it was a volatile week on wall street, investors sold as bitcoin plunged, but the market recover by week's end. at&t announced plans to spin off warner media and merge it with discovery, how it will alter the streaming land a scape. and the blockbuster retail earnings show eager americans are venturing back into stores. will the retail rebound continue? on the round table, ben levisohn, carlton english and jack howe. ben, once again, the week started off with an ugly monday, tuesday not so great, but then there was a turn around. what happened at the outset there? >> yeah. it really wasn't much of a week just looking at the headline indexes. the dow and the s&p finished down just half a percent, the nasdaq rose 30.3% -- 0.3 president. bitcoin dropped more than 20% in a single day after elon musk said tesla would no longer accept the cryptocurrency. jack: elon musk, we knew he

controlled crypto. if crypto controls the s&p 500, he is a very powerful fellow, indeed. >> he'd like to think so. jack: yeah, exactly. something brought things back. what was that? there's another powerful man on wall street. >> that's right. and it was jerome powell kind of. the turn around came after the minutes from the fed's meeting last month were released, and it showed them actually talking about tapering, even if that word wasn't mentioned. this is the reduction are of their asset purchases. normally that wouldn't be good news, but i think people have been so on edge about the possibility of this starting sooner rather than later that the minutes actually created this kind of sell on the rumor, buy the news reaction. and tech actually led the market higher from there. but i think with the economic data, which hasn't been so good recently, starts getting better, we might see cyclical stocks start to rally again. jack: that shows how difficult it is to figure out what the market's going to do. taper talk relieved markets now

that that's finally happening. what are you looking for as next week's surprises? >> i think it's still all about inflation, so i'm going to be watching consumer confidence, the second reading of gdp, to see what's going on with those rising prices. we should be able to get some more upside from the market. jack: so this week's cover story is about the at&t spin-off of time warner merging with discovery. jack, in addition to clearly an admission that that was a really bad deal three years ago, $85 billion plus debt for time warner, what does this tell us about the streaming landscape now? >> there are two centers of gravity in streaming. they are netflix and disney. if you're not one of those, you better be doing something niche and weird like british comedies where your costs aren't too high and for reasons that i can't fathom people willing to pay for it. because if you're trying to be a third or fourth generalist,

that's a tough position. customers don't want to pay for that many general streaming services. i think at&t understands that, and that's why it's fleeing hollywood. it raises the question of who is next to consolidate. it creates immediate scarcity value. we saw b -- bofa do a double upgrade or viacom cbs. they were get the healthcare out of it -- it the heck out of your portfolio. now one company with major network and nbc buying another one, but disney has paved the way with its fox deal show toking if you spin off that network, you can keep everything else, all the productions assets and the story franchises that you need for streaming. i think regulators would say, look, the whole reason at&t -- they allowed this merger between the number three and four players in cellular, t-mobile

and sprint, and that's created a viable, strong third competitor in that market, and that's more competition for consumers. if it worked there, may you want to let the same thing happen in streaming. jack: and you dent even mention the behemoth's waiting possibly on the sidelines, apple buying mgm, jeff bezos' investors have lots of patience. this is great. real quick, at&t dividend probably cut in half, but it's okay from here, you think? >> yeah. they should learn to love being a phone company. invest in some wireless infrastructure. don't buy anything dumb. don't try to be the next tiktok. no one's looking for that from you. [laughter] jack: carlton, as usual, you were ahead of the game about two weeks ago. dana track, a newsletter i love, pointed out that covid retail sort of timeline, which is we all bought ipads and mac

computers first, and then we realized, oh, my gosh, i've got to spoof up my house, i'm going to be in it 24/7. and then they said the google searches for lipstick and heels skyrocketed in recent weeks. that's a trend you were on. >> yeah. so, basically, what we saw from retail figures that came out this past week is people are shopping for everything. you still see some of the home goods, those home good sales like in walmart and target, but target saw a 60% increase in apparel. people are going out. the whole thing that we all want to be comfortable forever, once people start going out to restaurants, getting back to their normal life, they're going to want to start wearing clothes. we're going the to have a summer wedding season, prom season, back to school is actually going to be a real thing. so there's a lot to look for, a lot of very impressive same-store sales. but the thing to remember is we have that low base effect.

half of the quarter, retailers' quarter ends may 1st, a lot of the stores were shut down. so when you see these double-digit gains, you had to think more about the pre-pandemic figures and are these retailers actually gaining momentum. that's why i think we saw some choppiness in the stocks after reports came out. jack: i know next week you're going to be looking at abercrombie e and fitch as well as nordstrom, we'll be talking about that a week from now. coming up, the fed being coming up, the fed being realistic about the threat of they said it couldn't be done but you managed to pack a record 1.1 trillion transistors into this chip whoo! yeah! oh, hi i invested in invesco qqq a fund that invests in the innovators of the nasdaq 100

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♪ jack: the consumer price index last month had its biggest jump since 2008, spook markets as investors worried about rising inflation. the fed is calling it transitory, but economist

mohamed el-erian isn't so sure. thank you so much for joining me. this is right at the moment when we want to talk to you and get your take on this. investors, policymakers are all wondering is this inflation persistent or transitory, and you're on the record is suggesting the fed should have a little more humility in making predictions. what's the probability this inflation could prove more persistent? >> it's high enough for the fed to stop repeating this mantra that it's going to be transitory. look, undoubtedly there are transitory factors. the base effects are one of them, the short-term miss match among supply is another one. but increasing he there's evidence underground of structural shifts in both demand and supply that suggests that we should have an open mind towards the persistence of the inflation their pressures. and that's what companies are telling us. but typically macroeconomists have enormous difficulty adding

up the micro data and changing the macro approach. jack: yeah, certainly the data have been all over the place, which probably makes it even harder. i want to ask you about some big long-term trends, but first, you mentioned the possibility that supply and demand have shifted a little bit. i thought demand was kind of slowing in the big picture as we've got aging population and so forth. is it possible i'm wrong there? >> so the question is what's going to happen over the next few years. we entered this with this notion of a deefficiency of aggregate demand, and it had several elements contributing to it including demographics. we've come out with a completely different demand paradigm. we've come out with the average household having a very high savings rate, having repressed consumption. we've come out with governments spending trillions of dollars and will probably continue to do so, and then on the supply side

we've come out with more industrial concentration. we've come out with more companies looking to rewire their supply chains. and we've come out with a labor issue as well, a mismatch between labor supply and labor demand. so if you look at this, you've got to ask yourself how many of these are going to last for the next few years. and if i don't know, let me keep an open mind. jack: so one more long-term trend that seemed to be depressing prices, people were worried about inflation being too low over the past decade, is technology. whether it's moore's law or as simple as, oh, i've got uber, i don't need to buy a car. how do you see technology playing into in this. >> especially what i call the amazon, google and uber effects, amazon you can bypass the middle person. google, you can price search and regain some pricing power. and then uber where you can

bring in existing stock and, therefore, increase supply. so we have to take these trends seriously. and they're not finished. but i think the bulk of the disruption is more likely to be behind us than in front of us. jack: interesting. and one more signal that inflation isn't serious is coming from the bond market whether it's the 10-year at historically very low levels and the tips market, but could there be other maybe forced buyers coming in to keep those deals down? >> so i want you to imagine that you are in a bar offering free drinks and someone tells you that down the road in a few hours we will no longer have these free drinks in the magnitude that you have. you're not going to stop drinking now. what the bond market is telling you is, for now, the markets respect the fed. and for good reason. the fed is continuing to buy $120 billion of assets every

month. so the market is going to wait. and the big question we have is the longer the fed risks falling behind the curve, the bigger the adjustments in the marketplace when it happens. jack: gotcha. that's an interesting point. one more question then. so arguably, despite the low price appreciation if over the past decade or so, there has been inflation in assets. stocks are very expensive. even bonds are very expensive. so at this point, what is your recommendation to investors? commodities? stocks tend to do okay in inflation their times. >> if you want me to summarize in one phrase, it's what leon cooperman said when asked how he positioned, he said i'm a fully invested bear which tells me even people who are uncomfortable about the market feel compelled to be invested, which is good news for now. but if they sense a crack in the

liquidity paradigm, they will just be bears. they will not be fully invested. jack: and it doesn't leave a lot of buyers on the sideline. mohamed el-erian, i look forward to having you back in a few months and seeing where we are then. >> thank you. jack: coming up, a new generation of money managers is changing the traditional ideas behind value investing. jpmorgan's claire hart will give jpmorgan's claire hart will give [ crowd cheering ] [ engine revving ] [ race light countdown ] ♪♪ ♪♪ when you save money with allstate you feel like you're winning. safe drivers save 40%

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♪ jack: value investing is evolving. next generation money managers are looking at different metrics for investing including how a company is positioned to deal with disruption. this week's edition of barron's is highlighting six of these cutting edge managers, jpmorgan's claire hart is one of

them. great to see you. >> hi. thanks for having me. jack: old definitions of value investing often involved around buying stocks for less than the sum of their assets. an industrial company trading below the value of its factories. think about google, amazon, your fund has beat 90% of its peers. what qualities do you look for in a stock? >> well, i think most importantly, equality. so we want quality companies. i want quality management team, quality business, a quality industry. i want the capital structure of the company to be appropriate given the company and sort of the cash that they general ratement to your point -- generate. to your point about maybe value investing is how people think about it, we think about it a little differently. it's not the cheapest thing in the market because from our perspective cheap can also get cheaper. we're looking for quality, we realize we may have to pay a

little bit more for that are, but for us, what we need in return is often a company that's not quite what it used to be, and it's evolving. we try to capture things when the companies are sort of evolving and have something to provide hopefully to the upside in terms of where it's historically tradedded, that sort of thing. jack: sure. a lot of value traps we've seen over the past decade. over that time period, the market has gotten increasingly expense i have. expensive. i realize you look at individual companies, not index, but are you having trouble finding decent deals in this pricing market? >> i'd say we're not having any more trouble than we normally have meaning we're picky. we're really picky. i'm talking about buying quality companies at a great price so we can make money in the shares and also with a dividend folk. so we're really -- focus. we're really demanding a lot from our companies.

but in this market, similar to ones in the past, hopefully ones in the future, if we keep looking, we can find what we're looking for. it's out there, and if you haven't found it, it's because you haven't tried hard enough. we're still seeing lots of opportunity. >> hi, claire. i understand that you like mcdonald's. i'm going to bet you -- >> who doesn't like mcdonald's? [laughter] >> i'm going to bet if i pulled up google satellite photos of the three mcdonald's closest to my house, you'd see my car in the drive-through lane of all three. but now i'm looking to get back out to sit-down restaurants. how does mcdonald's keep growing beyond the pandemic? >> part of it gets to the part of what you're talking about, they're mostly franchisees. and so the idea too is that, you know, i like stocks sort of like pay me now and pay me later. so the beauty of mcdonald's is, you know, you can have it at home, and as you see,

unemployment is dropping and people going back to work, that's for footfall near some of those restaurants that perhaps were near people's offices, and you might love mcdonald's, but you might not drive back to the office if you're working from home, right? for us, it's the ones that are open, but we can continue to make money. mcdonald's is a company, it involved. they're constantly changing their menu, moving to kiosks, that helps on the expense side. so for us it paid, and we think it'll continue to pay. >> hi, claire. i'm just wondering how you're evaluating the opportunities in the retail space. we got a ton of great numbers this last quarter, but there might be a little bit of noise to them, so i'm just wondering what metric you're using to sort them out from the potential value trap. >> to your point, you've got the great numbers because last year was unfortunately for everyone, it wasn't a normal year in terms of retail. so this kind of gets to the point i was making before about companies that are constantly involving. last year was the wrong time for

a management team to decide we might be able to maybe shift stuff to people's homes. companies had to be thinking about that long ago to have that in place. is so when we think about companies, it's about, yes, we're e getting great sort of top-line numbers now. and what's ironic to me is that people seem to be disappointed in some of those stocks where that a top-line extra, call it extra bit doesn't flow off to the bottom line. to me, it totally make sense. these companies need to invest to evolve, and this gets back to the point before. we're not just trading on the standard metrics especially in retail. the comps versus last year means nothing, right in it's all about, for us, lots of different ways to look at a company, but one of the things we're trying not to do is just say comps, the comps, because that metric in particular is tough. it's a different, you know, last year, it's a different kind of environment. environment. jack: up next, round table

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♪ jack: so, jack, you may be lightening up on your mcdonald's trips, but i understand zoodles are on the menu. >> look, restaurants are back. one analyst said the recovery she was expecting later this summer has already been happening in the spring. i spoke with the chief of a company called noodles and company this past week. it's a heck of a turn around going on. brought the stock back from $4 to 12. part of the solution has been the introduction of zoodles made from zucchini for the health copps. he says labor is the number one issue right now facing his company. i also spoke with an independent

restaurant in southwestern pennsylvania, same situation there. they tell me business back to normal, and the main dining, but they're making due with 15 workers down from 20-25. and it's every restaurant in town has a help wanted sign. jack: let's get some stock picks from carlton and ben. let's start with you, carlton. i think you're sticking with the retail theme. >> i am. and i'm going to butcher the pronunciation. this is the company behind cartier and month blank -- mont blanc. here's where it's interesting, possible hedge against inflation. our colleague did a piece on this last week about these so-called bevlin goods, the more they cost, the more people want them? for someone who may not have a few gs lying around for a cartier watch, this could be a way to play it. jack: ben, what's your idea? >> my idea is called the stock dropped 10% after releasing

earning. there were some worries about profit margins and other things. i think it's going to be okay, and that can make the selloff into a buying opportunity. jack: two opposite ends of the retail spectrum, but appreciate it. to read more, check out barrons.com. don't forget to follow us on twitter @barronsonline. that is all for us. we'll see you next weekngngngngg ♪ >> from the fox studios in new york city, this is maria bartiromo's "wall street." maria: happy weekend to all. welcome to the program that analyzes the week that was and helps position you for the week ahead. i'm maria bartiromo. i'm -- another volatile week on wall street, mark mobius will tell us where things go from here coming up. plus, the biden administration gives china another break. senator marco rubio responds to the delay on the ban on trading of companies linked to t