complaining he had to give half of his salary to his father. spin it i think skin to miranda devine. congratulations again on the story. we will follow very closely, thanks maranda. that's it for us to be back with more comments or interviews jack: welcome to "barron's roundtable". we get behind the headlines and prepare you for the week ahead. why stocks like apple and amazon are great inflation investments. values are soaring but homebuilder stocks are the cheapest in the market. andrew bear - andrew bary has the outlook for housing. we are back with the most

important things investors should be thinking about. stocks had their first quarter since 2,020, a strong march lifted the market from its lows despite news on ukraine, inflation and rate hikes. president biden releasing oil from the strategic oil reserves to combat inflation but will it be enough to ease the pain at the pump. biotech stocks surged early in the covid crisis taking a beating ever since. why investors give them a second look. so, ben levinsohn, the markets started in the ugly fashion. it was up on the month of march and upper this past week. are we getting a bounce back? ben: i don't think so but this is unexplainable to me. when i look around at this we see what investors were afraid of, it was inflation.

by february it was russia and ukraine, you could chocolate rally up to this cell the rumor by the news except the news keeps getting worse, the war in ukraine keeps going on, inflation isn't letting up and the fed raised rates more than we thought it would. the s&p had its best month since september. jack: we saw some inflation indicators, it doesn't look great. ben: it looks pretty bad. we got cork personal consumption expenditures, the pce is what the fed looks like. it is up 5. 6%. wages going up 5% and the ism manufacturing survey showed prices paid are skyrocketing as new orders are accelerating. none of that is great news about inflation. the fed has a chance of hiking rates at the meeting, 70%

chance of 1/2 point rate hike. jack: the cure for high gas prices is high gas prices. can do supply more broadly with higher prices, global uncertainty etc. . could that slow the economy and help the fed do its job? ben: it could. how to insulate these forces and the calm is what if it hikes too much and the economy slows too much from the forces you mentioned and you have a big problem. jack: that is often the case. it leads to a recession. let me pivot to big tech. there's an outsized role in the global economy in the us market. one stock in particular, apple, is really dominant. apple has held up well recently and that pushed the market higher. >> the stock market's largest

stock had a winning streak that ended wednesday. a stock like apple going up that much, it helps the markets make everything else looks better. jack: the inflation question, carleton, no bigger reminder of inflation than the prices at the pump. the president tried to take a step to push those prices down this past week. carleton: we have president biden allowing the release of 1 million barrels of oil from the special return -- reserves for period of 6 months, expecting to lower gas prices by $0.05 to $0.35 a gallon but still looking at high prices but hopefully as well. jack: when it goes to $114, companies producing that stuff would make more of it but companies are not drilling more. why not?

carleton: the dallas fed asked that question, 60% of oil execs say that there investors are urging them not to rush to produce more. think about 5 or 6 years ago, a number of energy companies rushed and spent a lot of money to overproduce when oil was $30 a barrel. many were forced into bankruptcy so you are looking at a situation where the outlook is good but let's be cautious about this. the biden administration is saying there are 9000 wells in the us with permits and the oil producers don't start tapping them they may start facing fines. ben: renewable energy is one way to release fossil fuel demand but it is not a quick fix. >> definitely not. we had the biden administration invoking the defense production act for lithium and cobalt. it will take time for that to

materialize. the reason is the us wanting to move to energy independence, biden saying we've been relying on unreliable foreign sources are various commodities, looking to get the production back open. jack: i want to go to jack hough to talk about stocks that were hammered and nobody noticed, everyone talked about risky tech stocks but there has been a biotech bloodbath. jack: got to look at biotech. i turned 50 this year and i'm due for certain medical test you are probably aware of. i'm not comfortable mentioning healthcare and bottom fishing in the same sentence but you have 2 when it comes to biotech. look at this etf, the spider s&p biotech etf, down by nearly half from february. jpmorgan wrote that healthcare broadly looks attractive, earnings stability, biotech in

particular looking at dealmaking and clinical breakthroughs. taking a closer look at biotech, the best deals are small and midsize companies, a third are trading at 3 times the value of cash and short-term investments which is cheap. these companies can be hit or miss. there's another one, biotechnology, that waits for larger companies, you can buy individual ones. jpmorgan says among gets favorites are see jen and bio american pharmaceuticals. jack: cheap stock sounds like better the colonoscopy. how to invest for inflation and own stock in companies with pricing power. that is next.

to help prevent bleeding gums, try saying hello gumwash with parodontax active gum health. it kills 99% of plaque bacteria and forms an antibacterial shield. try parodontax active gum health mouthwash. ♪ ♪ we believe there's an innovator in all of us. ♪

that's why we build technology that makes it possible for every business... and every person... to come to the table and do more incredible things. new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.

jack: we -- when and why you speaks, everyone listens. we wanted to know more. joining me now, school of business finance professor aswath damodaren. thanks for coming on the show. appreciate it. >> thank you for having me on. jack: the backdrop investors need to address, inflation and rising rates. what's your prediction for inflation? >> we had a decade of low inflation and i think it is over. we are heading to higher inflation but how much higher? we settled in at 3%. it is a benign scenario.

if we go to 9%, there's no question it will be much higher than the last decade. jack: what investors ought to be looking for is pricing power. explained that. >> a simple reason, when interest rates go up you need to make a higher return on stocks. when you head to 8%, the only way stocks can keep up is to increase their revenues at the same rate. if you cannot pass inflation to customers you will get squeezed so pricing power will give some companies the capacity to pass inflation through and better bets when you have high inflation. jack: a prime example would be amazon. >> to me amazon is the ultimate example of a company that

earned its pricing power by nurturing pricing power for the last 20 years. amazon prime is dependent on prime, they charge higher prices, get away with it. they don't have complete pricing power but relative to other companies amazon is an example of pricing power. jack: apple, my phone recently died, and i realized how dependent i've become on that thing. jack: you are heavily dependent on your phone, and they control the operating system and it becomes the area where you are comfortable. if you switch to a different operating system you feel lost. again i think they have the capacity to raise prices and you go along simply because you

have no choice. jack: these companies are so big they suffered a regulatory crackdown, regulations help their incumbency status, i want to ask about facebook which seems to be begging for government action. the most recent scandal is they allegedly hired the consulting firm to spread falsehoods about tiktok that didn't exist. at watch point does that company face a regulatory issue? >> the risk, it already runs risks to its brand name and capacity to keep growing. actions like these but the company more at risk. all of these companies, the threat of regulation, they are so big that governments want to restrain them. facebook has not made any friends for itself across the

last few years, everybody on every side of the political spectrum looks at facebook and what is to stop and that is not a good place for any company to be because when regulations start getting rid nobody will come to their defense. ibly15 jack: certainly true. netflix is dominant, messed out on best picture, spending a lot of money to get that content. how do you see that working out? >> the picture that comes to mind when i think of netflix is accompanied spent its entire life putting out a model where it goes to market and said we can keep adding and it has done that very well. it is a user creating machine but the way it adds users is by delivering more and more content especially when netflix is growing in 15 countries, that content has to meet 15 languages.

and its costs have kept growing. to get them under control is not going to be easy. jack: it does crackdown on password, love your insights. the dallas fed said we may be heading for housing bubble. andrew barry -- andrew bary jo (fisher investments) in this market, you'll find fisher investments is different than other money managers. (other money manager) different how? aren't we all just looking for the hottest stocks? (fisher investments) nope. we use diversified strategies to position our client's portfolios for their long-term goals. (other money manager) but you still sell investments that generate high commissions for you, right?

(fisher investments) no, we don't sell commission products. we're a fiduciary, obligated to act in our client's best interest. (other money manager) so when do you make more money, only when your clients make more money? (fisher investments) yep. we do better when our clients do better. at fisher investments, we're clearly different.

jack: housing prices up 13% from last year.

why are homebuilder stocks so cheap? andrew bary has some smart stock picks. thanks for coming on. andrew: glad to be back. jack: our cover story looks at changes in the real estate market that made it more difficult for a significant share of americans to afford a home. andrew: higher prices up 16% and higher mortgage rates which are up four and 1/2% since the start of the year. higher prices, bigger down payments entire mortgage payments, it is a hot housing market. jack: it is great for the seller. let's remind homeowners double digit price appreciation does not go on forever. we call it don't get too excited about this, we won't last forever. >> 15% plus appreciation for the rest of the decade but it

is conceivable real estate could have a good decade. conventional best him as stocks are better investment than real estate but in the 70s real estate did better. it possible that could happen again. jack: homebuilder stocks are at crazily low evaluations. what is going on their? >> investors fear good times will not last. homebuilders are the worst group in the stock market. valuations have rarely been lower, trading four times earnings, near book value in their balance sheets have never been better. the financials look good for homebuilders. investors fear that things won't status good for long. ben: toll brothers could be really well positioned for new ways we are using our home but the stock is not getting any love. what is going on?

andrew: it focuses on the high end. gets $400,000 and sells a lot of amenities including mother-in-law suites and home offices and fancy kitchens. it is trading 5 times earnings. it is a good company that looks cheap right now. carleton: what is the opportunity you are seeing with lennar? andrew: it plans to spin off its non-home-building operations which could be worth 1/4 or more of its stock price and there's a secret way to play it which is class b super voting share which is a 15% discount to the better-known class a stuff, lower dividend and the two questions could be combined.

the class b stock hitting 69 could be a good opportunity. ben: why is home depot stock down 27%? %? lowe's is down 21%. i thought we were frantically working on our homes, you still like home improvement, which what is your favorite? andrew: home improvement is one of the better stocks. investors don't think good times will last, higher mortgage rates will bite and housing sector will slow but home depot the industry leader, lowe's is making up ground against it. i might lean toward home depot, a 2% dividend yield with better locations and better relationships with contractors and is a high-quality company trading for below-market multiples. jack: the homebuilders contracts lock in those profits for a while.

andrew: the earnings are baked in and the last couple months are going to result in homes being delivered later this year. there profits are locked in for 2022, trading at or below forward book value which opens underneath the stocks. if you want a decline in mortgage rates few stocks could roll. jack: sometimes you see things the rest of the market does not. next, roundtable members give their investment ideas for the weakened. weakened. ja welcome to allstate. ♪ ♪ here, you can save up to 25% when you bundle your home and auto. if that's what you're into. click or call for a quote today. i had been giving koli kibble. it never looked like real food. with the farmer's dog you can see the pieces of turkey. it smells like actual food. as he's aged, he's still quite energetic and youthful.

i really attribute that to diet. get started at longlivedogs.com what are you recommending for muscle pain? based on clinical data, i recommend salonpas. agreed... my patients like these patches because they work for up to 12 hours, even on moderate pain. salonpas. it's good medicine

"barron's roundtable" jack: help me out with two things. should i be losing sleep over

the inverted yield curve? what should people be investing in? jack: it is a baby in version. keep an eye on it. if it gets worse it is not a big concern. be excited about high dividend yields. there are things called dividends investors used to get excited about. it is not crypto, not paul a graphic internet cartoons but money in your pocket and they are more important now. 5 years ago for the s&p index, would have paid 18 times earnings, would have paid the same valuation with the highest yield in the index. since in the index has gone up in price to 20 times earnings, the high yield has gone down in price, 13 times earnings, you can by exposure, the spider s&p 500, the yield is 3.8%. don't tell me high dividend stocks do poorly when interest

rates rise. the correlations have been moving in the other direction. those go go grow stocks have been doing poorly. jack: i like the dividends payable i will take your word for it. let's move on to actionable ideas. carleton: is your reminder to start your taxes if you haven't already. our colleague has a story about how the irs help line is facing huge wait times. if you need help filing you will have a tough time getting it. the help line is at record levels. jack: what have you got for us? >> morgan stanley highlighted the stock as one that will benefit from rising wages of inflation.

it will benefit from onshore, 20% regionally from a tie and looks like a pretty good deal right here. jack: robots are the future. great ideas, thank you very much. to read more check out this addition of barron.com. next week we talked to good ws again monday night. ♪ >> from the fox studios in new york city this is transcends wall street. >> and happy weekend to all welcome to the program that analyze the week it was an helps position you for the week ahead. i am maria bartiromo. unemployment falling to a two-year low as stocks close out their worst quarter in two years. former vice chairman on where we go from here coming up. meanwhile the president is trying to tackle skyhigh gas prices with the largest release of emergency oil reserves in