donald trump i've long believed if joe biden said is going to run again but donald trump would feel compelled to do so because his ego and need to have the rematch. i think it biden said no that donald trump might read the writing on the wall. it is true republicans would like to see blood and new faces are tired of the rematches and fights and would probably be healthy for the country to move on. gerry: we have to go thank you for staying awake through the show kim strassel and richard fowler i'll be back next week with commentary and interviews at the "wall street journal at >> abca10 baron's roundtable sponsored by global x etfs. ♪

jack: welcome to "barron's roundtable" where we get behind the headlines and prepare you for the week ahead. after next week's expected rate hike, can the fed stop raising rates? rick reeder on whether inflation has peaked and how to make money on bonds. there's a chance the midterm elections will result in the biden government and gridlock in dc that could be good news for the market. we begin with three things investors should be thinking about. if you haven't been investing in tech it was a good week for the markets and better-than-expected third-quarter gdp report for the soft landing. if you are invested in text, apple selloff beat results with amazon, med and other tech giants shook investors confidence with disappointing earnings and chinese president xi jinping's consolidation of power raising the question is china and investable. my colleagues been levisohn, carleton glitch and jack hough. tech mostly mostly have an off

weekend the s&p is off 5%. what happened? ben: a tough week for big tech stocks not named apple. the dow finished up 5.7% which is amazing. it is a little about earnings, the market is looking at the meeting next week, we are going to get a signal the fed will slow down the rate hikes and that is the thing that is concerning the market all this time. even though we had bad earnings from microsoft and alphabet, the possibility of a soft landing that inflation will come down and the fed will pause those rate hikes, got the market excited. >> you looked at some numbers and saw the spread between tech and everything else is dramatic. ben: there has been a 9% difference, 7 times are bigger than that. most of them occurred during the dot.com bubble.

maybe we'll get lucky, but okay, this will look a lot like the dot.com bubble, working off different valuation premiums and tech stocks before this started. jack: what do you expect? fed hikes will take their toll? ben: it will be down from 280,000. is that enough for the fed? probably enough for the market if it starts getting to that number. we could have problems. jack: it was a horrible week for technology stocks. the two juggernauts on the one hand, advertising in google, and the unstoppable business at aws and microsoft both of those things hurt.

carleton: you are talking a bad year, 2. 5 trillion in market . . the thing that struck out was they sold growth of 27% below analyst estimates, similar story at microsoft. the thing was with these cloud businesses they thought about having your cake and eat it too. they promised a lot of growth, they are durable. businesses are slowing their spending, and and there are positive surprises. >> a big story about a company i had never heard of does not bode well for what will happen in tech?

carleton: they saw a decrease, they are noticing much weaker demand on pcs and servers. cutting spending which says not only are they seeing it right now but are not coming back anytime soon. jack: the drama of elon musk and twitter is over, what does that mean for the social media landscape as far as investors? carleton: investors won't have twitter to kick around anymore. facebook giving up 1/4 of its market this week, companies that were thought to be impenetrable are now starting to get activist attention. we had one activist go after facebook, probably can't wait given the size of facebook and structure but they can create headline issues so these tech

companies aren't looking impenetrable. we got data that showed 22% of activist campaigns -- it used to be 14%. jack: a financial advisor came out of a spirited conversation about whether to invest in china. not sure i like the roi. >> ali baba, atf, golden dragon, 14%, xi jinping replacing market friendly members of his leadership group with yes men and investors didn't love it. the bookcase for china shares is they are cheaper. ali baba lost 80%, generating more free cash than amazon in the past five years, with a sliver of amazon. the barricade eileen to is you

don't get ownership if it is -- if you are buying into a shell company, vast swaths of its economy and the potential of back lash or retaliatory action, us trade tensions. the counter to that is he wants there to be a global currency. not going to weapon eyes assets in currency, and the double down against that, shares of stock anyhow for 30 years. telling us investors you have to get into china, made no money. the s&p 500 made 10% a year. they are world beating companies but i don't see the urgency. jack: tech investors may fear the fed ra

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request a cash offer at opendoor.com jack: the fed is continuing its fight against inflation but some saver 75 basis point rate hike could go too far. could the fed beat inflation without causing recession and how should you invest now that rates of shot up? joining as is black rock cio rick reeder. thanks for being in studio with us. obviously, and in the economy, that is their goal. >> you don't see a lot of it yet. you look at the employment costs the came out and it is still high and still running cpi over 8%. it hasn't worked through yet

and the signs of inflation are happening with commodity prices, the housing market by every metric is coming under pressure, a big part of the inflation metric so you can see it is coming. it is still pretty sticky. >> this is going to trickle through? >> i'm confident it is on its way. it will still be higher than it has been historically for 2 reasons, wages are still high and job market is tight, fed trying to create degradation in demand for hiring, it is still sticky. people underestimate we have a service oriented economy, 80% of the job market, 2 thirds of consumption, healthcare, education, restaurants, travel, that is still staying high and the goods sector is deflating today, services are solid and most of the economy and inflation coming down to still

a higher rate. jack: people are chomping at the bit to travel. historically the fed does not have a great track record achieving the so-called soft landing. this time it is trickier because there are so many crosscurrents. any chance of a soft landing? >> employment is solid today, savings rate is high, the system has delivered. you have a lot of reasons for a soft landing. the thing i think is hard, it is amazing to think in march the fed was doing cutie, fed plot fund rate was 0 and how we had a rapid escalation and liquidity at the same time. so that is a shock to the system. the fed will start reducing the amount of hikes. you have to step back and say can the thing calibrate down

without over tightening? that's the question. jack: you made a comment in barron that you are in the -- your giddy about the market. >> i'm tired of 2 or 3 years of 0 and fixed income, you find things at 0.25%. in europe, if it was a positive interest rate that was exciting, now you can fund assets, shortening yield curve assets and certainly get 5% if you want to do some investment-grade aaa assets, you can get 6. 5% without going along on the yield curve or taking credit risk. that is why i am giddy. you had to buy down a risky high yield market. we don't do that today and you

can get a nice yield. jack: people complaining about nothing in their savings accounts. where do you see the biggest opportunities that wall street is missing? municipal bonds are looking good. >> relative to where they used to be and high yield, you see that, that is interesting. what people aren't talking about, the front of the yield curve if you can clip 6, that's the most exciting thing, but the one people aren't talking about, they issued debt in 2020-21 with 1% or 2% they traded 55 or $0.60, there was distressed high yields, you think about investing in debt markets and real estate, the

value is going up today but those bonds, if i can buy investor grade at 55 they are not defaulting or you get paid out of par so starting with the long box, really attractive dollar prices. jack: you talked about buying something for $0.55 and get paid a dollar for that and in the meantime a previous >> because of the dollar price, we are talking companies like home depot, google, disney, visa, we are seeing high yield investors, $0.55 on the dollar, the coupon isn't great, but your return from it is unattractive so you can create a really neat bar bill in fixed income. 6% or 7%, if rates stabilize the price is tremendous in the long run. jack: thanks for coming by.

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jack: midterm elections a little more than a week away. if republicans take one or both houses we will have a divided government, dc gridlock could be good news for the markets. that's with this week's cover story. megan costella joins us, thanks for joining us. with all signs of a divided government, can you tell us what that will mean for the economy and the markets? >> it will mean a lot of gridlock, not a lot get done in a divided washington but it will mean a lot of brinkmanship. not a lot to agree on, not a lot they work together on but

they have to get things done like the budget or the deficit. jack: it guarantees a lot of noise. will they do anything? can they pass anything at all? >> they have to pass a budget. if republicans win, they get to levy their influence a little bit and see increased funding for defense, things like oil and gas, traditional energy sectors, split government means they do this every 5 years, democrats have to push for more money for nutrition, food stamp programs, climate change mitigation, republicans want more aid to farmers and crop insurance as governing by executive order that republicans will try to block things they don't like like regulation for financial agencies but more noise than there is action except for those areas. jack: the us needs a deal on

the debt ceiling in a year and folks will say they always reached a compromise before but the rules of fiscal chicken are clear, you must make the other side believe you 're serious that you will go all the way. partisanship as bad as i have ever seen, i can't tell whether washington has reached peak stupid or if it has higher to climb from year, bond markets have turned cranky. someone said tax cuts in the uk, bond yield on the long side, spiked pension funds almost went cuba we --kerbluey but what are the chances the bond market think there will be a default? the yield spike here in fiscal chicken turned into fiscal roadkill? i yield my remaining seconds to you to respond to my monologue disguised as a question? >> you are right about all of

that, thanks for challenging conventional wisdom, something washington doesn't like to do. when key point is to watch the way they happened in november. if it is a big been for republicans they have to make a deal with the white house, it is easier to make that deal. all of congress working together to make it. if they win by a few seats almost every member of congress will have enough leverage to push the us to the brink of default. we've seen at least a few that are willing to go to the edge on this. carleton: curious what the midterm elections going forward? >> watching this closely. the midterms mean everything for the fiscal spending we will see going forward. in the past few years, probably little to no fiscal relief in the event of recession. that will leave the central bank on its own to navigate us through.

any recession is nothing like extending an employment aid we had in previous years, nothing like that. they are on the road to pull the monetary lever and see what they can do. jack: we have asked a couple times are ready. is there anything republicans or democrats will agree on or anything that is going to get done? >> a couple things. closer we get to 2024 the more both parties shall before presidential election they are able to get things done so they are looking at ways to compromise. we know they are on the same page about china and industrial policy, the chips actor earlier this year, that incentivizes more semiconductor production in the us and that could build on that, higher end production as well. and incentivizing near shoring, bringing more production closer to home if not us oil. the other one i will offer his

we could see delivered tax

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beyond ordinary etfs. visit foxbusiness.com/"barron's roundtable". jack: we asked is china and investable? closer to home i got the same question about facebook, excuse me, meta. jack: i don't think the new name is working for them. the decline in daily active users, revenue guidance is terrible, meta used to be, facebook used to be the top 5, news by market value, it is no longer in the top 20. the real challenge is an advertising slump and apple's privacy changes derailing

facebook technology. mark zuckerberg is spending $10 billion a year on this super double secret meta verse project everyone swears is not just a videogame without shooting robot dinosaurs or going to meetings with avatars. i am not seeing it. i don't think other investors are seeing it. if you can go the other direction, put more dinosaurs in my day you would have something. ben: jack: you are sticking to your guns on healthcare. ben: i am late to the stock. it has been dead money for 6 years ever since they cured hepatitis c. right now it's hiv business is looking strong and the stock valuation explains that. the oncology basis for free. it has won a lot but something to keep an eye on.

jack: healthcare and energy look good. you have two ideas for us. carleton: root for the phillies in the world series, a finance focused show, take a look at visa this week. despite the worries we have, doing a new buyback program picked by nick. jack: a sponsor of athletic events. great ideas, all of you. check us out on elon musk' the following is an important paid program about humana medicare advantage prescription drug plans, sponsored by humana. at humana, we know that no two people are alike. we understand that you have your own questions and your own needs when it comes to choosing the right medicare plan for you. that's why we really take the time to get to