anybody actually a little bit more skeptical of this overnight bill human who claimed that the magic new formula it was a little bit incredible and now when we look at it we know why it was basically "house of cards". the answer should not be bigger government. we should take of a crypto, it's interesting newfield but the case of sam beekman street is not a caseworker to regulation. gerry: that that number time. great thanks to kim strassel on by >> "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. markets plunging on rate hike and recession fears. i will ask david rosenberg what he's advising his client for 2023. top stocks for the new year. andrew bary shares his pics. we begin with three things investors should be thinking about. stocks tanked after slow retail sales and another half point fed rate hike. is the economy headed for recession. move over, elon. bernard arnaut is the world's richest person. shares plunge after the company reported disappointing news on bookings, what it means for the meta-verse. on "barron's roundtable," ben levisohn, carleton english and jack hough. it is so overused. was jerome powell the grinch last week?

jack: you told me you weren't going to go there. the market got ahead of itself a bit. he didn't say anything we didn't know. we got a 50 basis point hike. we know rates will go over 40% and they will stay there for a while longer and the market freaked out about that because it had a nice rally off of the october lows and might have to do a little bit with what we saw, pointing to a weak economy going forward. jack: you can't fight the fed. at this point should investors be conservative until they start to sniff out the pivot will happen? jack: investors have to stop thinking about the pivot so much and focus on statistics. the pivot is not good for the market. stocks could average a top of 16% from the last rate hike, we don't know which is the last

hike but i think the part that investors have to prepare for and not fight is the output i mentioned where the fed is predicting 0.5% growth for next year. unemployment at 4.6% and that is as close as the fed will get to predicting a recession but that is what it seems to be doing. jack: sounds like a good set up to be a bond investor. jack: the bonds were a touch lower than i would like but even if it goes higher it is time to buy, they are doing what they are supposed to, bonds are going up in value and stocks are falling. that's great for investors. jack: may have been tough for investors in the market but it has been a good couple of years for the top 10% and they keep spending big on luxury items.

we have a new person in the throne of richest man in the world, bernard arnaut. carleton: the brands like louis vuitton, the brands in my closet, you can see on my eyes right now, fashion and luxury conglomerate top the world's richest list taking the spot from elon musk, no longer his world. what they've done so well is impressive mix of assets and bernard is involved in business from day today, he inspires competition for brandon the holding company but he himself is doing channel checks. he's he is not resting on his laurels and the company has been very aggressive about scouting new talent like going after rihanna, on the cusp of fashion. jack hough: statistics are amazing.

47% increase in luxury spending in 2021 versus pre-covid in 2019 but does this trend have legs? carleton: we are looking at a bumpy time, sometimes it takes a hit but also rebounds quickly. you have a growing criminal class in china and india. there are areas for the luxury market to go. jack hough: the past week i'm on assume call, mine-year-old wants a dollar from me to buy a fake dollar called a robe -- --roblox. the stock fell 16%. jack hough: my kids did slide shows with her christmas list. it was like sitting through 2 bad ipo road shows. they were on both of the list. the game remains possible but the stock got killed thursday after disappointing november growth. that's the second one of these in a month. there was a huge decline on bigger than expected loss.

the market value crossed by half since the company began trading last year. this company if you look at a year ago this company was like ben's fashion, way into the black. this year they might burn cash. hard to understand how this is not the most probable company in america. a lot of them are made by kids, overwhelmingly the users our kids. they make the digital merchandise that sells, the company takes a cut and another cut and another cut, the size of the cut they get by the time all is said and done, investing right now, a lot of money on growth. the bears say it is spending response not paying attention to the economy or what is going on with tech companies. it is being undisciplined. i' m an undisciplined spender but i will not get those roblox. i will point to the stock.

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not again... oh no... for the gifts you won't forget. happy holidays from mercedes-benz. see your mercedes-benz dealer today for exceptional offers. jack otter: stocks - or another red -- fed rate hike, as it leads to recession. how should investors respond? joining the rosenberg research and associates founder and president david rosenberg. thanks for coming on the show from snowy rainy toronto. >> i would love to join the

other 2 million canadians in florida. it is a pleasure being on here with you but thanks for the invite. jack otter: i spent some time reading a research and i will not sugarcoat it. it is kind of depressing. would be fair to sum up your thesis by saying after 7 years of distorting the economy with easy money the federal reserve is over correcting and the dramatic increase in short-term rates is likely to crush the economy. >> that the perfect way of putting it. i don't know so much about this desire to crush the financial markets, that is part and parcel of what is going on right now but it is more that jay powell goes into a second term compared to arthur burns, the fed let the inflation genie out of the bottle and this is about the embarrassment over transitory and if the fed is over correcting, that's the

direction they are going to take this inflation story and grind it into the ground. if it takes a recession, so be it and the reality being historians, you get bear markets and whether they are wild or severe obviously it depends on the starting point of the multiple but you get the short market. jack otter: you cite a lot of evidence that the economy has started to turn downward but we see pretty good unemployment, strong job numbers month after month. is it because it is a lagging indicator? >> it is a lagging to coincidence indicator but the only employment statistic that is showing strength is nonfarm payrolls and there's been a lot of generous seasonal factors of late playing into that, the bls

model, assuming we are generating net business creation that is adding to the existing payroll survey. you are getting extra juice in those numbers, nonfarm payrolls is what you focus on, jay powell says to focus on that. i think at the margin it is starting to dk, in the opening months of next year we will see more in the way of job loss but the unemployment rate, the fed told us they want to the employment rate at 4.6%. we bottomed at 3. 5. that's what we have to wait for for the fed to pause, not so much inflation, they want the labor market to loosen up. we are in a recession already. jack otter: that would be the end of inflation but you say

there's another leg down in the market, that earnings are going to go down and investors, we could lose 25% or more on the s&p. >> i think we could. we could go down another 15 to 20. let's just say that history is a guide. everybody asks me are we there yet? the recession is about to start. the official recession, stock market traditionally bottomed 70% into the recession. the stock market bottomed 70% into the fed using cycle. they are still raising rates, early next year into the most inverted yield curve since the spring and summer of 1981. we probably still have 6 to 12

months before we get to the bottom. we have to wait for the fed to stop raising rates. 70% into the cycle, when does that using cycle start? the fed is trying to convince us is nowhere on the near-term horizon. it's not a pleasant forecast, bull markets for of bear markets, it is part of the cycle. i am preaching discipline, diligence, and patience before we start to ride the next bull market which will be in 2024 but not for the next 12 months. jack otter: give us an asset class you like in the next 12 month he or go? >> i will give you two. the bond, bully, and barbell. the us dollar is starting to correct, gold is a hedge against that. long-term treasuries play a very good trade for the next 12 months.

jack otter: that's dandy, david, more alliteration for you, think for coming on the show. if you invested in barron's top stock picks you handily beat the market. our resident forecaster andrew ♪ ♪ ♪ voltaren. the joy of movement. ♪

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jack otter: it's drop, the list for the new york, on the cover story of the outlook for 2023. our resident stock picker andrew bary is here to tell us who made the list and why. thanks for coming on. before we get to this your's pick, take a victory lap, since you made the 2,022 picks in december of 20 one, the stock

market is down by 15%. your pics are down 5% even after this past tough week. that's a good outperformance. if you were a mutual fund manager you would have picked up the competition. how did you do andrew: we made a value orientation it had some winning stock like shell, ibm and johnson & johnson. jack otter: what is your stock market outlook for 23? andrew: i'm upbeat, stock market is trading 17 times next year's earnings, the fed does not have any stomach to keep rates high. a pivot in the first half of the year and next year and once that happened it is off to the races. jack otter: is there a running theme this year? andrew: we have a healthcare stock, tech stock, downhill stock but a lot of the stocks think are down 25% or more.

carleton: looking at amazon, we are looking at a tricky holiday shopping season, got an ugly print, what do you see in amazon. what l stands on them? andrew: it is 50%. because of they are extended on infrastructure, determined to write that and we will see that next year. the online retailing business, concluding operations. carleton: you like bank of america. i'm used to jpmorgan being the bellwether for the industry. is b of a replacing from? andrew: it one of the best managed banks, ryan moynahan rival jamie dimon in his ability and you got a stop which is trading reasonably, 10 times next year's earnings and

a 3% dividend yield, big risk is recession but bank of america is one of the best portfolios in the industry. they could be insulated if something happens. jack otter: the housing market is beating home sales, prices might be falling, homebuilders are depressed according to sentiment indicators we get. why do you like toll brothers? andrew: toll brothers is a differentiated homebuilder. the roof is not caving in on housing, the industry should remain profitable in 2023. it is more insulated because it sells luxury homes, costs one million dollars each, risen 400,000 for its rivals. it is trading pretty cheaply, 7 times earnings under book value. you could have a wildcard coming up, the cofounder died, that could be a takeover candidate for one of the bigger rivals or berkshire hathaway. jack: what will happen to

been's house and jack's house? andrew: 10% or no more. jack hough: i like everything about delta excepted being an ally because airlines have a record of incinerating investor cash. air travel has become as pleasant as a porta potty. why is delta air lines the one and why is 2023 the year? andrew: people are traveling. they may not like traveling on airplanes. they did a good job, the same metric, customer base and pretty profitable. they spent earnings double next year and people still want to travel and get lower fuel costs as well. jack hough: they filled every seat. you are our resident buffet buffetologist. he did a bad year in 20 to you if you're up to mystic about 23, can they keep up with high flyers?

andrew: they have offensive capabilities. one hundred billion dollars in cash, 30 billion in earnings power and the slumber post pandemic made some good investments, chevron, occidental petroleum, bircher is well set up for 2023. jack otter: how much room is there, are we looking at twitter as cost cutting and will the same thing happen across all of them? andrew: elon musk can cut 70% of its cash. there's an activist push to cut costs, a lot of pressure on the company to get leaner, get in the environment and it is a great franchise, stocks down 30%, could be well set up for 2023. jack otter: next week will be andrew's annual quiz in the magazine. you can take it. if your predictions turn out to be the most accurate you get lunch with andrew bary. andrew: or a staff member of your choice.

jack otter: after the for worst we can months for the markets, interesting idea it's nice to unwind after a long week of telling people how liberty mutual customizes your car insurance so you only pay for what you need! (limu squawks) he's a natural. only pay for what you need. ♪liberty. liberty. liberty. liberty.♪

(fisher investments) it's easy to think that all money managers are pretty much the same, but at fisher investments we're clearly different. (other money manager) different how? you sell high commission investment products, right? (fisher investments) nope. fisher avoids them. (other money manager) well, you must earn commissions on trades. (fisher investments) never at fisher. (other money manager) ok, then you probably sneak in some hidden and layered fees. (fisher investments) no. we structure our fees so we do better when our clients do better. that might be why most of our clients come from other money managers. at fisher investments, we're clearly different.

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ordinary etfs. visit foxbusiness.com/"barron's roundtable". jack otter: you are not losing sleep over elon musk kicking these journalist off of twitter. we are not going to be next. you have more important things. jack hough: paying attention to the wrong things, the frizzy haired crypto founder, bankman-fried getting let off in handcuffs, the latest mayhem on twitter, selling tesla stock and donald trump, the clickable cards, his head on the bodies of astronauts, cowboys, i saw one with laser beam eyes. there were other things, other developments.

for the record, us scientists generated power from nuclear fusion for the first time and moderna had results from a trial of vaccines for preventing recurrence of melanoma. unlimited clean energy down the road, and a shot at curing cancer. i don't want to divert from the action cards or elon tweets. jack otter: accentuate the positive. two more positives. carleton: i'm positive anna financial, charles schwab will position for 2023 as much of the sector is but they are not going to get that pressure from net interest margins when they have to start paying their sabers for their deposits. analysts see upside of 17% in 2023. jack otter: you have a great pick. ben: crocs, those ugly rubber shoes. everybody in new york is wearing them with socks. it is terrifying but the thing

is people are wearing them, stores are pointing to casual footwear and the stock can gain 25%. it is breaking out. jack otter: a chart showed that crocs had 6 times search interest on google is the meta-verse. that is all we've got. check out this week's addition of barron.com and follow us on twitter, barron online. that offer us, see you next week on "barron's roundtab the following program is sponsored by the international fellowship of christians and jews. winter has come to the people of the former soviet union with brutal and deadly force. thousands of poor holocaust survivors are quickly running out of food