plot. on and on it goes media puts out misinformation far more extensively in far more damaging way than any right wing conspiracy website. this is a primary source of corruption international conversation pretty thank goodness we can still find ways of getting at the truth. that is it for us this week i'll be back next week at more in-depth interviews right on the wall street journal large. thank you so much for joining us. ♪ ♪ >> barron's roundtable sponsored by invesco qqq. ♪ ♪ welcome to barron's roundtable will be get behind the headlines and prepare you for the week ahead i am jack otter. coming up inflation, stock prices and corporate profits all soaring what comes next question at veteran ceo has seen it all. he will tells how to ride it out. and later more americans are planning to do their shopping in-store this holiday season. brick-and-mortar retail is

surging, we will tell you why partly begin as always with what we think are the most important things investors ought to be thinking about right now. inflation appears to called investor cpi 2% in october from a year ago what is the market telling us? general electric has announced plans to split into three separate companies why that is good news for shareholders and tesla stumbled this week will competitor search on its first day of trading. electric vehicles investors should put their money. on the burns roundtable, and jack hough. the market after more than a month of rising every week turned down just a little bit. we think that might be because investors finally took notice of inflation. >> perhaps for think it action more to do with the bond market this week. we did have a crazy inflation numbered with the prices jumping six-point to percent outlandish number. the market handled that pretty well it was relatively flat it

was only to labor in the day on wednesday there is a 30 year bond auction that went really bad the worse since 2011 what is cut by s&p and the bond market finally calm down these stock market did to the moment and they auction it sounds as if a bond investors said you've got to give me a better yield i'm concerned about inflation what does ben levisohn think? what is the child will make you think this is more than a pandemic a pop? >> i think we are already at that point the fed talked about transitory on how this was not going to last. it has clearly last a lot longer than they thought a lot longer than i thought it would. the problem is the fed is been put into a position they do

have to do something about it. a lot of the forces do come unwound. >> real quick anything you're looking for next week? i'm looking at retailers. the report earnings next week walmart, macy's home depot consumers are big part of the cognition tells a lot about what's going on after. >> let's talk about cycles they seem to be an merger mode or spin off mode outside of tech it's clearly spin off mode? >> that is certainly the case. there's a lot of investment pressure to split up. johnson & johnson announced plans to split into two with household staples like band-aid and tylenol comprising one company. the other going to be a higher margin drug business medical devices.

break up into three things is once synonymous with conglomerate ge announcing it would split up it. >> what is the future for ge? >> the first outsider to run ge. he's been on the unwinding much going to break it up into three businesses one focused on healthcare another one on aviation the westerville jack welch is not the shareholders any good at all. i think it may be worse in the hole for the pieces are worth what her $40 billion combined. that's about 20% higher than recent prices it's possible the businesses could be snapped up he could and even

spinoff happens which makes them more valuable. that may be an attractive one he had a fantastic track record under his watch the stock rose something at 14.4% on average annually versus 6% for the market but. >> comparing the chart to the de ge chart tells a heckuva story. meanwhile it turns out if you want to go all in on electric vehicles tesla's not your only stockmarket option. ready and debuted investors piled in. >> the biggest ipo since facebook and 2012. arctic worth more than $100 billion, fifth largest vehicle maker by stock market value. on the plus side it is the first market with the pickup that is key to the u.s. market. it's shooting for 1000 vehicles this year once they get up to 150,000 vehicles by 2023, seems like a tall order

for member, tesla has shown with that large of a stock market value you can solve a lot of problems for the two funding and ramping up production. speaking of which tesla ceo does not seem to enjoy the spotlight on thursday he tweeted that tesla is the only american car maker to meet positive cash flow and the path of 100 years he is one sassy genius. there are new choices not just talk about legacy carmakers or you'd be barest to tell your friends you bought. it's a booming chipmaker or the cordova joined us with an autonomous platform for carmakers who want to catch up to tesla on ai in a hurry. this past week it's a company called lumen are to provide that stock jumped, tesla stock 15% for the week i have no

doubt it will gain 490% by thanksgiving. seems to have been cancel it's at least interesting new choices out there. >> $90 billion market value. think you said 1000 cars being made and it will take a while to catch up a great to have more competition. coming up why the market might be headed for a stumble.

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comprises a financial advisory arm and an investment banking business. which gives you a pretty good window on the economy. what is with your clients right now and thanks for coming on the show. >> hey, glad to be with you. let me just start with the economy. when you just step back and look at it broadly, you have to understand and clients and investors need to understand we have put a tremendous amount of fiscal stimulus, over $5 trillion. and monetary stimulus through qe that is fueling this market. it is a little surprise to me this market is increasing almost every day. it is because of all of the money and the demand we have seen. in a bit of perspective, the entirety of world war ii plus

the marshall plan which we built europe in today's dollars that was about four and a half trillion dollars. we are over $5 trillion in stimulus alone. so think about it and when you do it you'll understand there's a lot of fuel for this market to go up. >> up at this and good perspective of the post of the inflation they are inflationary as well. does that worry you? >> well it does. it is exactly right. as you see all of this money and the stimulus and think about it, it is a proper but we sent money to people who were home that were not shopping and going on vacation and traveling. a lot of people save that money. that has turned into a tremendous amount of demand. there is just not as much goods. i think anyone on the show knows how hard it is to buy a couch or to buy a

refrigerator. to get any good you are weeks out. when the demand outstrips the supply plus excess money that equals inflation elise went home to school it did. >> yes absolutely. the only good news did not get to bed to the 70s maybe we can be help for their prey doing to pivot to the market and ask what you see there. i thought is to be interesting to ask you about, corporate revenues the s&p 500 revenues are up about 14% since 2019, not bad. profits are up 35% for that almost sounds too good to be sustainable, what do you think? >> again, when you increase in debt especially physical debt is going to pull profits for that's part of the story. the other part of the story

people do not understand is the makeup of the s&p 500. since 2019 in the tech companies have a made up a much larger portion of the s&p 500 than they did in 2019. the profit margin and the tech companies are much higher. you're going to see an increase in profit margin despite the makeup of the s&p 500. with that said, i will say to you as a market participant, i do not think this level of profit margin is sustainable going forward. >> that's a great point about asset light companies on the margin. you mentioned market participant. you have been in this job for a quarter-century. you have seen it all. i thought i had seen it all until i saw your start dancing devil went out to georgia that's impressive people should google that. more important leaps in lot of downturns a lot of market participants have not because it is been so good for so long. how are you preparing for the inevitable crash?

>> i am not going to say crash. markets are cyclical and it is inevitable we will have a correction. it is inevitable we will have a recession at some point. anyone who does not believe that just is not understood in cycles. the answer is that everyone should be prepared for markets that are not as enthusiastic, shall we say, as today. the best thing to say that i can tell investors one, do not be afraid of the fear of missing out. do not chase the latest fad. do not do it. and remain diversified. if you are diversified, you will do just fine. in the inevitable cycles that occur in our markets were. >> that is good insight, run thank you so much for coming on the show. >> i enjoyed it, thank you. jack: coming up after the

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>> the pandemic force consumers to do the shopping online. but now floss shoppers are flocking back to the nulls igniting a revival of brick-and-mortar retail. cannot last? it's parents covers for this week joining us now at moody chief economist marco zande. mark thanks a lot for coming on the show, appreciated by. >> man, my pleasure thanks for having a very. >> where the key drivers is simply americans are so flush with cash. 50% higher than it was in

2019, why is that? >> for a lot of higher income houses higher middle income is sheltering in place during the pandemic. folks did not travel, they did not go to restaurants, ballgames, restaurants. they saved a lot of money paid that money is not sitting and checking accounts, deposit accounts of the stock market, real estate. for lower income households and benefited from a lot of the government support provided during the pandemic $5 trillion in total throughout the pandemic. stimulus checks three rounds of stimulus checks, unemployment insurance, food assistance, rental assistance that benefited from that. they've also saved more than they did pre-pandemic. everyone from the highest income households to the lowest income households has more in their checking accounts than they did prior to the pandemic. jack: okay there's a lot of money out there going to go to a basketball game next week for my son's birthday for the first time a long time, why go to the mall?

>> i think it's a novelty. people stuck in for a long time they've been shopping online, all good. i think they will continue to shop online. they want to get out and about. they cannot travel quite yet people still a little cautious when you have young kids you cannot get your young kids vaccinated a little cautious about that so what you do people going out shopping, going to the mall just want to get out and about. i think the malls have benefited from that. >> consumers have 50% more cash and there are not enough goods to buy because they are all snarled up in the supply chain mass. that is inflation herbal prices keep rising or is there an escape valve? >> and thinkers in the worst of the inflation now. in my mind the culprit here is the pandemic particularly the delta wave of the pandemic. that did a lot of damage to us here in the u.s. it screamed a ship or tickly southwest asia

vietnam, indonesia, this is where the supply chains begin. so factories shut down, ports got disrupted. if you buy into that diagnosis with the delta wave now fading and hopefully the pandemic receding for real you should see the supply chain iron out in the shortages start to abate. having said that the higher inflation is not going away next month or even early next year. i suspect by this time next year we will not be talking about inflation. >> i suspect there are some weak retailers out there that look okay now because they're benefiting from a reopening, what are the hallmarks of the strong retailers that can prosper for years even to the next downturn? >> they have to have a very strong online presence. think brick-and-mortar is doing a balance because of the nature coming out of the pandemic. a longer run i think online will continue to take market

shares. think those retailers have a strong online presence can marry that with good brick-and-mortar experience they will win the day. were not strong on the internet i don't think they're going to survive long run. >> chime in here before run out of time. >> pre-pandemic we kept on hearing people wanted experiences over things. that's a nominal return and squeeze retailers read. >> i think that's going to come back. retailers have benefited from the shift of where people are spending their money. they could not travel, they couldn't go to restaurants they could not go to ballgames, they could not go to concerts they spend it on stuff. been on my back deck for 18 months, i have been investing in anything and put on your back deck for a power washer, to a heater, you name it. i have done it. but with things opening up and people getting back to full swing and the pandemic receding the get right back to wanting to travel into all this things they were not able

to do. the share of the consumer's wallet that goes to staff will start to decline and retailers will feel it. this will be a really great christmas for really retailers. my sense is november, decembers, gasoline will be up could be double-digit from last christmas which was up for live from a christmas prior. but i think this is the high water mark for christmases for a long time to come. [laughter] >> ill be santa's best year. thanks very much mark appreciate your insights. >> yes any time. >> up next roundtable members get their investment ideas for the coming week. jack is obsessed with barbie. stay right there on my travels across the country i came across this house with water dripping from the ceiling. you never know when something like this will happen. so let the geico insurance agency help you with homeowners insurance and protect yourself from things like fire, theft, or in this case, water damage.

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swiss evans would take a lot of serious subjects acute yield curve aggregate demand for last week i believe we use the term regression analysis. this week you want to talk about barbie? >> i am here to tell the world barbie is back. backlash with a body image and inclusivity and barbie lost a third of sales. there has been. [inaudible] the impressive careers, hobbies, sales or jumping and so is mattel spock. i broke with ceo he is pushing a big stream into streaming and moving with mattel bland they have more words live action barbie movie stars ryan gosling as can we are there you buy the popcorn try not to cry but hot will is on fire

two, mattel's rolling out premium cars for adult collectors price books in one fell this past week said his mom giving back his old hot wheels collection 1999. now he has a 2 million-dollar hot wheels port for that when he goes to convention he's greeted like the 5-foot six and shaquille o'neal of the hobby. that is one tall shack but one big collection. >> i cannot believe i got rid of my hot wheels you are bumming me out, jack. let's move on to more liquid investment some actionable ideas i will start with you, ben. >> look at american eagle outfitters the stock was up 19% the past three months earnings are just two weeks away. liquid is a logistics ensuring you can compete with the likes of amalek's and it's cheap. to set up looks really good heading into the earnings report for quick sticking with a retail theme, what is your idea? >> i will go with dividend appreciation, vig companies

are feeling better and racing dividends the pants inflation. jack: thanks very much, great ideas. to read bar check out this week's edition of barron's.com. don't forget to follow's on twitter at barron's online. be sure to join us next week we talked to pfizer ceo albert. that is all for us, we'll see you next week on barron's ... male announcer: do you find it difficult to show mercy to those who have wronged you? mercy does not come naturally to us and is contrary to the world's response toward offense. but showing mercy is a necessary step in building up the superstructure to true happiness in this life. if you do not show mercy to others, how can you expect mercy to be shown to you? showing mercy and grace, next on "leading the way."