rogan with the zuckerberg interview on the election and fbi and laptop doesn't beat her this week, i'm really gonna wonder about the spotify ca calculations. anyway, thanks to both of you. really appreciate it. sarah and charlie. that's if for us. gerry back nex >> "barron's roundtable" sponsored by global x etfs. carleton: welcome to "barron's roundtable" where we get behind the headlines and prepare you for the week ahead. i am carleton in. in for jack are. fed chief j powell warning economic pain, but the fed will do next with jpmorgan strategist david kelly.

later drought conditions around the country causing business disruptions and lost profits. we will look at the problems and opportunities for investors. we begin as always with three things investors should be thinking about right now. market selloff. stocks got slammed after fed chief jerome powell took a stance on inflation and caught investors by surprise. rising mortgage rates are pulling the housing market and showing up in prices. home heating prices are surging again. what to expect this winter and energy stocks to consider. on "barron's roundtable," andrew bary, megan casella. megan:it's doing okay and there was a lot of chaos. what happened? andrew: jerome powell happened. the miami times, research notes this week, he was more hawkish

than expected and the market was not ready for that. i don't think the market was ready for brevity either. he finished his talk at 10:10, the market was hanging in adhesive abruptly stopped and the market immediately tagged 10-11. carleton: we had major indices but what can investors expect going forward? andrew: the worst week since mid-june. we had four rate increases, 2.5%, but the market expected four more rate increases and we also had two rate increases of 0.75% so the market was hoping we were done with giant rate increases. the september meeting is leica coin flip whether we will have

a 75 basis . point increase. maybe it will be delayed. we are in this sort of malaise while we digest these hawkish opinions. what it means for investors and markets, the growth trade might be dead so between june and august when we were all feeling good the nasdaq was up 23%. call it a ball market may be, don't back to prior peaks but up to 20 i think that is largely dead. amazon, apple closed the week down 5%. i don't think investors will russian to mega tech anymore. carleton: what are you looking at next week? andrew: we got a lot of stuff but let's go to jobs on friday. estimates are 290,000 for payroll increase.

we are now above the level of employment, more people than were working pre-pandemic. carleton: we are seeing some cooling in the housing market. megan: jerome powell is having an impact, we see new home sales fall to their lowest level in six years, in july. inventories are up, mortgage rates have doubled in the last year, 5. 55%. we are seeing prices starting to slow, 20% of customers had to cut their asking prices in july, the highest in a decade. the national association of realtors psalm median home prices dropping $10,000 but everything is relative. we are up 10% from last year at this time so we see significant softening for demand to pick back up. carleton: what does it mean for homebuilders?

ibly27 megan: orders fell 60% and in the latest quarter it is more of a psychological problem than a math problem or affordability problem, luxury homeowners are being priced out of the market but they are spooked. they are on edge for recession, wary of making an investment that won't last so they are acting cautiously. carleton: the psychological aspect and inflation cooling with what we are seeing housing prices. megan: we have a long way to go, there's a difference between home prices and a falling gpi. carleton: we are seeing energy prices going up. this could mean higher heating prices in the winter, what do you expect? andrew: natural gas which is half of what americans used to heat their homes is up 3% in the last year and there could

be another 25% increase by winter with what is happening with commodity prices so it could be a very expensive winter for american homeowners. carleton: what is driving higher prices? andrew: natural gas doubled, what has been driving it is a hot summer which is driven demand for natural gas to produce electricity. producers are showing restraint on capital spending and output which wall street likes but is contribute into higher prices so the outlook for winter could be even higher prices because storage levels are low historically and we got get a cold january prices could go higher. carleton: give me a stock investors can look at. andrew: e qt hedged most of their production which means it will not benefit much but next year the hedges rolloff. earnings are higher.

carleton: the fed fights to bring down inflation, david kelly, what to expect for the rest of the year next.

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what are investors making of the fed's more hawkish stance? >> jerome powell's speech is what we expected it to be, he wants to sound tough on inflation. he will bring inflation down. that's what the speech was about. don't think it changed the odds in terms of september but broadly speaking they are saying they want to fight inflation and that's the market reaction. carleton: what will happen in terms of the rate hike, 50, 75 basis points? >> it's a close call. sounds like we might get 75 basis points. then jay powell is saying that is it. the next move could be lower. we may end up with 25 basis points more and all said and done we would have had otherwise, the danger between now and then will support lower

inflation and the money going 50. they understand tough, going 75 in september would sound tough. carleton: is there evidence of that happening now? >> gasoline prices, every single day since the middle of june, we've seen airline fares, very good data on that, used car prices soared to huge levels and bottlenecks in the global economy are clearing. fewer people complaining about things arriving so all of this suggests inflation is coming down. carleton: the deal in the aggregate, when do you think households will be seeing impact of lower inflation? >> it is gasoline prices. and that helps consumer

confidence, and it is good to be there. other things that were going up a lot, more availability of goods, that will help people feel better. carleton: how do you think -- do you think the fed will be able to avoid a recession? how bad do you think it will be? >> if we have a recession it will be mild, none of the cyclical sectors are elevated. we don't have a housing boom or auto boom or inventory boom. it is hard to injure yourself jumping out of a basement window. it is a close call in a recession like wandering around the edge of the pool and a kids party going on and the chances of something bumping un, it is possible to avoid a recession if nothing goes wrong but one bag crisis, the economy is very

vulnerable to recession. carleton: even if it is a mild recession you don't want to minimize the impact going to next month's jobs report. what are you expecting to see? >> with unemployment claims and online job ads, this pent-up demand for workers, even when demands, we could get 300,000 jobs added, and that much looks pretty good. that looks good because we will weaken later on this year. carleton: last time you are on set with us you made a smart call on bitcoin. >> i don't see any real value, is a cult masquerading as a currency. carleton: when we see where bitcoin prices go, we have had such a huge drop.

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carleton: much of the country experiencing drought conditions and widespread water shortages impacting businesses, industries and agriculture. the cover story of this week's addition of barron. we are talking about water scarcity. breakdown the figures on what this means for us. al: lauren gets the bulk of the credit for the story, if you like it, great, if not, lauren, it is your story. only about one half of one% of the water that covers the face of the earth is freshwater. that is issue number one. when we are talking about scarcity, by some estimates, by the end of the decade, water demand will outstrip, water supply will outstrip demand by 40% to 60%. these are regional problems. water by virtue of its nature

is not even close to as valuable as oil, these problems are regional. we have hydroelectric dams. these are the shortages that are becoming legitimate investment risks as we today and more significant in the future. ibly20 where are we witnessing the effect of scarcity now? al: the middle of china, szechuan province, they use a lot of hydroelectricity, there's not enough water, it is a tremendous drought, toyota has a plant down, the largest electric vehicle battery maker in the world has a plant down cattle and you have shanghai and szechuan like 2000 kilometers away.

saic, carmaker, and tesla asking the shanghai government to ask the szechuan government to make sure the auto parts manufacturers have power. they would like to prioritize that and saying we will run out of parts. that is a legitimate imperfect -- impact. you have miners in chile having to build desalinization plants, take the salt out of the water. that is 50 times more expensive than water they would pay for in the traditional fashion, having the pump for cell phone utility. it is more expensive raising the price of copper. andrew: there are a lot of report about water scarcity in the united states. is it really so bad? al: i like to frame things we have learned, this is regional. the southwest is in tremendous drought. lake mead which is the

reservoir formed by the hoover dam, water level is 50 feet below where it was five years ago, finding boats that sank, finding mobsters that were placed there long ago, that will create, that create szechuan like issues, constrains growth, they need water for people's homes. and hasn't manifested itself in plain closure like china has experienced but it will manifest itself in higher cost, desalination projects, raises the cost of water, these are the types of things you can expect to be dealing with as an investor or homeowner the next few years. carleton: how do investors play this? where's the opportunity?

al: avoid companies that just do commodities, pipes, valves, and pumps. you want technology, 45%, 40% of all water pumped from the utility leaks. utilities have a great term for it called nonrevenue water. they can diagnose it, find leaks, track the leaks, they have excellent technology, they have a good future. it is only 10% water, a global standard for water test. those are two examples of high-technology companies that benefit from these. carleton: what about water utilities? al: there are a lot of water utilities i like. they are expensive but more expensive like an electric utility, they are virtually indestructible. my new favorite company, a tiny water utility in pennsylvania paid dividends since 1816 and

never missed one. american water, a bigger utility, you get 8% earnings growth, 2% dividend yield. carleton: thank you, very important package in this week's magazine and interesting stock picks. roundtable members give their investment ideas for the comin welcome to allstate, where you can bundle and save. isn't that right phil? what in the world are you doing? i'm in the metaverse, bundling my home and auto insurance. save up to 25% when you bundle home and auto with allstate. every year we try to exercise more, to be more social, to just relax. and eating healthy every single meal?

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carleton: there's been a ton of coverage on quiet quitting. is that people leaving without telling their bosses? what is happening? megan: first the great resignation and then quiet quitting which has nothing to do with quitting at all. it is what we used to call phoning it in.

the idea of redesigning slowly at work, working only 95, not checking phone or email at night, not going above and beyond, just doing what is asked of you and going home. it has taken off because it sparked a debate on social media and the internet. people are divided in two camps, is it lazy behavior, they get passed over for promotion, creating work for your people on your team or is it healthy behavior learning to set boundaries, have a life outside of work while being productive while i am here? people are divided on this. carleton: any signs how this is affecting productivity and are employers getting smarter about this? megan: some people say i'm actually more focused at work now that i've learned to set boundaries, i can work when i'm at work and off when i am off. not trying to steal that time back during the day and doing my work faster or better.

if other people use the trend, move the mouse around without doing much, that is a different story but with the trend taking off i think employers are at least paying attention, asking around, trying to pay attention. there have been reports about monitoring keyboard usage. they are keeping an eye on it. carleton: we are not slackers at barron. andrew: the company has virtually no trades which is 7 times earnings and the outlook for aluminum looks good. it is light and versatile metal nickel to renewable power and electric vehicles. carleton: what are you looking at? carleton: nick is positive on t-mobile. i like the backdoor play on t-mobile. deutsche telecom owns 50% of

t-mobile worth $90 billion. that makes the rest of deutsche telecom worth $4 billion so if nick is right, deutsche telecom too. carleton: great ideas, hope to see you in the office on monday. to read more checkout this week's addition, barron.com and check out barron online. ... dr. michael youssef: the most difficult conflict of all is that conflict among family members. there are some people who find it easier to harbor resentment than to reconcile. if you inwardly experience the forgiveness of your sins from the lord jesus christ, then you must outwardly express that forgiveness to those who have wronged you. it's time for you to search your heart, and that's what i want to talk to you about today. male announcer: up next on "leading the way."