class, the professional educators and the professional health care workers, because they're pulling families apart with kind of -- swer jer and just very briefly, it is this idea that the state owns you, right? that society owns you and tell you what to do. it's very, very undermining of the family. >> it is. as brian said, it's pulling apart parents and children. and if you want to focus on this with people 18 and over, great. adults, or wonderful, young adults, fine. but if kids are 8 and 10 years old, get your hands off the children. gerry: that is a sad but very good note on which to end. my great thanks to brian brenberg and deroy murdock. we'll be back next week on "the wall street journal at large." thanks very much for joining us and ha >> "barron'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. the outlook for the market in 2023 and where the economy could be headed with david hunt. some states prohibit employees at tiktok and some politicians call for a total ban, the biggest threat to the social media apps. we begin with 3 things investors ought to be thinking about right now. stocks retreated as investors await word from jay powell, the fed is expected to raise rates by half a point. jamie dimon and david solomon morning stocks to consider in a slowdown. game stop is drop in crypto and laying off workers after third-quarter earnings to what business leaders can learn from the meme stock.

so, ben levinsohn, not a great week for stocks but you see reason for hope in the numbers. ben: this is a week that had a massive rally and no real news, news vacuum heading into a week where we get inflation numbers and the market dropped 3% or 4% but the good news is the market stopped around 3900. that was a resistance point. if that level hold this market looks like it could have a short-term base. jack: it doesn't appear to be pricing in as big and earnings drop as we would normally get in our session. is that is a sign of no recession are my too optimistic? ben: amazon is too optimistic. we have a strange thing where analysts underestimate what earnings would look like and now going back to normal.

analysts are too optimistic and numbers get ratcheted down. the hope investors have is numbers will come down but not so much and the market can support the earnings especially if the fed starts to dial back amid valuations and not so much you mess things up. jack: do you think things will get messed up poorly? ben: it depends on whether you get a soft landing. the fed will tighten and we will get the recession, the markets rally on hopes, maybe it will assume there is a soft landing at the recession hits and the market falls again. jack: this is what jamie dimon and david solomon are talking about. carleton: david solomon only sees 35% of soft landing where it can be pulled without putting the economy in a recession.

those were comments made this week. jamie dimon is reiterating his calls on recession coming up. this is nothing new. he's he is talking about is there a hurricane coming, a week one or strong one? the end point is he sees a recession coming by 2023? jack: oil prices at the lowest point, below average from last year, could be great news if you're filling up at the pump or signs of an economic slowdown globally. carleton: could be assigned a people are not traveling as much. with worries over a recession. something i'm skeptical or nervous about with these oil prices, we are seeing signs of china easing covid restrictions and coming back online. will that cause demand to go up? we are nearly stages of winter.

there's a chance demand will creep up but i'm sure people enjoy what they are paying at the pump. jack: jack will talk about meme stock darling. any advice for investors in that scenario? carleton: it comes down to what is going to hold off during a downturn and that is utilities and consumer staples. jack: game stop not stable. jack: the games are not going well, 19% decline, software sales, it is stopping on this crypto. the company developed this plan to move into a life beyond selling games on disks through malls because who knows how long that will last, launch an nft marketplace, nonfungible tokens and crypto wallet and

double down partnership with ftx in september, crypto prices have collapsed. one analyst calls nonfungible tokens a nonstarter for the company. the earnings call resembled a hostage video. it was 8 minutes long. there is cash on the balance sheet dwindling. i don't want to pretend the problems are easy, declining businesses for cash and wonder if they are doing as well as they could with the core games business and the market value explode from one billion dollars in change, when wall street hand you ludicrous stock market value covering the register with both hands as fast as you can. jack: how do they make money? people are not buying discs to put in the game console. people on these games actually sell and buy nfts, what can they do to keep the supply

blunter price? >> don't know how you match the margins of the used game marketplace, not the consoles but high markups on used games. don't know what you do that's a good match for the real estate so i am not sure what they can do online would match those. jack: the fed is expected to raise interest rates next week by half a point but continued rate hikes driving the economy into recession. more on that from david hunt [coughing] hi, susan. honey. yeah. i respect that. but that cough looks pretty bad.

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they're looking for you. who? who's looking? there is no time. they will kill you....but my daughter. mama. jack: interest rates rising and stocks falling, consumers still spending, layout in the headlines but payrolls keep climbing. after year of this what can we expect in 2023.

joining me is david hunt. thanks for coming in the studio. pgm is prudential's asset management arm, one. $2 trillion. i want to ask about these cross current in addition to what i just mentioned, atlanta gdp is up at a good model it says 3. 4% gdp is what it expects, chairman powell is trying to cause a recession. >> you are right, a difficult time to call this. it is one of the largest active managers. really generate excess returns for our clients when we have a view that's not already priced into the market and the starting point is what is priced in. what is priced into the market is rates continue to go up a little bit from where they are now and stay up for most of next year but then they will begin to drift down is an employment rises and we have a soft landing or mild recession. that is what you are betting on

if you but the market. so we don't believe that is what is happening. the level of inflation on a we would say this is a monetary inflation phenomenon we've not seen in recent memory. the money put into consumers pockets over the last 18 months is extraordinary. consumer spending up 15% year on year, one trillion dollars in money market funds, they will spend more. wages are continuing to rise. that's all inflationary. our for you is inflation is difficult to beat down so the fed will actually have to keep rates higher and longer than what is priced in. that's likely to cause a sharper recession at the end of that or at least a fight to begin to drop unemployment to

5% to get wages down so this is going to be uglier than people believe as you look at the raw numbers. jack: what is the best way to manage your portfolio? >> the great news about higher rates is you are feeling a lot of pain, rising rates are hard but higher rates are actually good. so after more than a decade where savers have been penalized by this environment actually saving money will be highly rewarded. retirees pensioners, people saving for college are all going to be more well-off so we actually think maybe not yet but sometime in the next couple months as we see inflation coming down steadily this is going to be a very good market for a variety of fixed income, probably better than it has been the last decade.

jack: retail investors are going in the same direction and sometimes splitting. what do you see? >> one of the most interesting things about the time since march, retail investors saw inflation coming up, rates going up, they read the statements by the fed and got out of fixed income. the second thing, they got out of growth equity stocks, got well ahead of that. institutions have a different objective function. most institutional money is being managed to back liability, sovereign wealth funds so when rates rise actually their liabilities fall so most pension funds are better funded now than they were at the start of the year by a good deal and they are using that time to take risk off the table so we have seen positive flows and fixed income has continued to gain asset so you couldn't imagine a more

different view and most institutional have not changed their strategic asset location but sticking with the plan and rebalancing as they need to but not moving the equivalent of money into the market funds. jack: the alternative space you see opportunities. >> for the last few years we think this is a trend that will continue the private assets overall will perform better than their brethren and i would include in that private equity, real estate, debt and equity and private credit, one of the fastest growing areas, one of the largest credit managers in world and after the gmc banks pulled back from lending money into the midmarket and institutional investors and asset managers have stepped into that void to where we are providing trillions of dollars of money into those lending

markets in support of america's companies. >> sounds great. and one where you did not like bitcoin at 70, 70,000, you don't like 60,000? >> kryptonite. that's the word. thanks for having me. jack: politicians and others calling for a ban on social media apps tiktok on fears it may share user data with china.

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jack: lawmakers pushing to ban tiktok after the fbi expressed concerns about national security, several states are prohibited the apps on government devices. how likely is a national ban and what would it mean for alphabet and meta? bad news for state troopers in

texas who will not be able to watch the dance contest on tiktok, they have to look at their radar detector instead. >> how will they work on their moves? i don't expect, you talk about a more blanket ban on the federal level. donald trump tried a tiktok band by executive order it was overturned by federal judge. if you did have motion in that direction, when that was going on tiktok approached microsoft about a possible deal and made an offer, tiktok declined that and going instead with something from oracle, you could see a sale of tiktok and that would probably make the company more competitive in selling ads, advertisers more reluctant about the company might be less reluctant. jack: the biggest threat to tiktok may be copycat capitalism. facebook and instagram, youtube owned by alphabet, these

companies are getting deeply into short form. jack: this is the biggest change in internet behavior for the next 5 years, rising short-term video consumption, 5% of internet usage last year, 12% and a couple years, exploding growth and tiktok was so dominant in this it had 2 thirds market share and the others were single digit shares. it will drop below 50% this year for the first time and by next year you could have it tied with the meta combination of facebook and instagram for one third share with youtube short in the high teens. jack: they have different strengths and weaknesses. >> youtube has a deep history with video and artificial intelligence to fuel its recommendation engine. facebook, matter is spending a lot on ai, they have more of a

sharing network in places more conducive to spreading videos around. tiktok a couple years ago was barely $1 billion in revenue, now it is $10 billion. a lot of money, a lot of growth and big tech companies that need growth right now. carleton: tiktok is sophisticated in this program, it knows what i'm into. that i'm into tango dancing. >> everyone knows that. carleton: you wonder what else is being collected. if there will be a crackdown on data collection, is there anyone else that could benefit? does snap enter the picture? we don't talk about snap that much. >> snap might be the biggest and fastest because it is so small scale, the most to gain and hurt but you are spot on about the sophistication of how tiktok feeds videos. i did poke around, there is an

apps called shorts on my youtube apps. it is shorter videos. the first one that came up was about firewood. anyone who knows me knows that firewood is as exciting as broadway, spot on, and norman mcdonald clip from an old letterman show, went to for 2 and then it got flaky. i got over norm while trying to figure out what i am into. tiktok is more sophisticated. ben: trend on the internet move so fast. will this really be the big thing in 5 years? jack: you come to the right place. i don't know. look at the trajectory. rapid growth in this. i talk with another big platform on instagram, i talk with my wife about on facebook and it pops up in your facebook feed, that's 90% of her time spent on facebook, she's not spending a ton but the growth is so explosive even though the

ad rates are not as high as they are for traditional video i think the money follows the attention the next couple years. ben: how do you modifies this? jack: ads come up and say add. they were not great fits for me but you see videos like creators endorsing products. big shack got me, shaquille o'neal, a video. he is telling this touching story about the first time he ever bought a vehicle, only had $1,500 in his pocket before he hit it big in basketball and i'm leaning into this, found a great deal on insurance through the general. he's a pitch man for the general. you got me. it turns out to be a covert pitch for insurance. there' s going to be a lot of that going on, companies that create their own content and pay to get it boosted if it doesn't go viral.

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ordinary etfs. visit foxbusiness.com/"barron's roundtable". jack: two years ago you made a strong statement about the bond market. let's go to the videotape. >> if i come up with a thesis, got to start with why bother. jack: so young and innocent but that was a really great call. if you stay out of the bond market, the biggest losses since 1788. now a different story. jack: if you haven't bought your bonds yet i know what you're thinking, the 10 year treasury yield a little over 3.5%, down from 4%. you are thinking i missed my

chance, nothing good happens to me, i want to tell you cheer up because i spoke this past week with kathy jones, not too late to buy bonds, 4 to 5% without taking a lot of risk out there, prefer to go long on duration rather than drop down to get extra yield, mutual funds are just as good but the path of individual bonds, aaa rated municipal bonds, treasuries for people in the top income brackets. >> i say look at treasury, doing nothing for 7 years, 4. 7% is pretty impressive. more actionable ideas. carleton: looking at bath and body works, free cash flow yield, earnings growth in excess of 5%. %. activist investor dan loeb went

in, a tricky spot for activists, this is not a company in dire trouble. jack: you looked at me, i'm into firewood. ben: penske otto group, there's been a lot of bad news about used cars but people sell new cars doing quite well, business models change, not so much about haggling but people trying to get what they want and this is dirt cheap, they trade 8.4 times earnings of a lower in the market itself. looks interesting. jack: automobiles, to read more check out this week's addition of barron.com, follow us online, barron online, join us next week on "barron's roundtable". (gentle music) - [narrator] the following is a paid presentation for mypillow. - literally, this is the best mattress i've ever had. i have never had such a good mattress.