they come here to congratulate each other on how smart and successful and virtuous they are in contrast to all the deplorable that the left back home. actually spent more time listening to those people and less time listening to each other we might really start with the dabo slogan to improve the state of the world. that is it for this week on the "wall street journal at large" would be at joe back next week for commenter interviews, think of joining us, see you nex >> and pretense sponsored by global x etfs.

carleton: welcome to cristiano amon in where we get behind the headlines and prepare you for the week ahead. coming up, white house economic council chairman jason furman on the risk of recession and how geopolitics could impact the economy this year. stock picks for 2,023 from the top investment strategist on wall street. we begin with 3 things investors ought to be thinking about right now. we are on rocky footings this week, what you should be watching for is earnings season continues. then bonds are staging a surprising a rally. how to get in, the treasury department taking special steps to avoid a government default. with the debt ceiling drama in washington, what it means for your investments. on cristiano amon 10, ben

levisohn, andrew bary, and in from dc, megan. the nasdaq leading, can you make sense of what we are seeing. >> look at the dow, it was up 2. 8% and looked like we were going back to the selling that characterized 2022. the fed talking about rate hikes, then look at the nasdaq, squeaked out again this week. it is hard to make too much of what is going on with the market. it looks like repositioning out of what worked in 2022 and into the things that didn't work to see if we can do better this year. carleton: might there be a reason to look overseas? >> as well as the nasdaq is done, china up 15% so far, europe is up 9%. the nasdaq, has to give you pause because there are some pretty big gains in less than a month of training but the united states has done well so for the last 10 years, it is possible to get some very good

international -- sorry, international outperformance over the next few years. carleton: back to the us, we are 2 or 3 weeks into earnings season, what are you going to look at in the coming weeks? it ben: it will do better than netflix, they have more subscribers, microsoft has the same so that tells us how apple and google will do. on wednesday, it looks like people are ordering more airplanes and then chevron down because of how well those stocks did in 2022, chevron giving a hint of whether they are right or wrong. carleton: the other side of the portfolio come the bond side, after a rough 2022 it seems like they are taking off. andrew: bonds are back after one of the worst years on

record. bonds staged a rally and yields are down 1/4 to half a percentage point across the board. you see a run-up in treasury bonds and municipal bonds, corporate bonds. carleton: is it too late to get in? andrew: short immaturity treasuries like etfs, convertible securities, offering a play on bonds and smaller stock market and inflation protected securities, so there is an ets for that. carleton: investors have a difficult sense of what is driving the bond market. what should people be looking at for the next few weeks or months on how things like inflation will weigh on valuations? andrew: the driver is optimism about inflation. inflation is cooling off, a 2%

rate in the last few months, that is encouraging. investors are hopeful the rest of 2023 will see similar numbers, nothing like we saw in the first half of 2,022. carleton: we are talking bonds and debt. we bring in the big guns from dc. we are coming up on the debt ceiling, seems something that happens every few years. what is at stake? megan: it has potential to rock the economy and markets and is exceedingly unlikely to happen, but it could. we have to focus on it. republicans are dug in. they have to vote periodically to lift their own debt ceiling to pay for spending already approved. republicans have the house majority, narrow majority and using this as leverage, we want to see significant cuts likely aimed at expensive pieces of legislation, programs like medicare and social security, democrats don't want to engage, they say we have to do this,

this is a hostagetaking situation. we should pass it because that is what we have to do to keep things in regular order. president biden has shrugged off any suggestion we move unilaterally to fix this but it means we are at an impasse. carleton: when might we see this come to a head? how do we expect this over the next few months? megan: treasury secretary janet yellen could use extraordinary measures to move money around, to by congress more time. that statement was june 5th. washington doesn't do much without a hard deadline. we will talk about this the next few months. we won't see a deal until closer to than. carleton: right now, markets don't mind but do you anticipate market volatility? megan: it is a question what the long-term impact is. we don't have to get all the way there, for there to be impact. 2011, downgraded us debt for

the first time even though they made a deal. we don't have to get all the way to that date for something to happen. carleton: thank you very much. how long debt ceiling drama could last depends on whether republicans and democrats can work together. white house economic advisor jason furman weighs in on that and more next. >> cristi i have moderate to severe ulcerative colitis. so i'm taking zeposia, a once-daily pill. because i won't let uc stop me...from being me. zeposia can help people with uc achieve and maintain remission. and has been shown to reduce symptoms in as early as 2 weeks. zeposia is the first and only s1p receptor modulator approved for uc.

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could pool off that soft landing people are hoping for? >> we could have a soft landing, but could translate into a one in 6 chance. with the labor market as hot as it is, wage growth as high as it is, even with a lot of things breaking the right way, it will be hard to get inflation all the way down for recession. carleton: when we talk about likelihood of recession, people are scarred by what happened in 2008-2009. how severe will the coming recession be? >> when i say there is a one sixth chance of a soft landing, that does not mean the chance of a recession. we might avoid a recession but have continued overheating, where the on employment rates days on the low side, inflation on the high side and that is a distinct possibility. if it is a recession, the best guess is that would be a

shallow recession, because the balance sheets of consumers are really healthy, healthier than they were prior to covid. the fed continues to squeeze sectors of the economy, especially the housing sector, consumers up until december seem to have been pushing the other way. the problem is a mild recession may not be enough to get inflation back to the fed's target. carleton: is there anything else that could get us back to the fed's target? have a mild recession would be able to? >> the happiest way to get back to the fed's target would be a huge explosion of productivity growth. the second happiest, a little more plausible, would be an immaculate labor market where job openings start to fall and that happens without the unemployment rate rising. we have seen some of that happen towards the middle of

2022. it could happen, it is not my best guess but i think a reduce in the labor market is what i would be keeping my eyes on for the optimistic soft landing scenario. carleton: i am glad you brought up the jobs picture. the last few months, we've seen big companies, big tech firms or wall street, massive layoffs being announced. as we get economic data, those layoffs announced over the next few months don't seem to be showing up. what is that disconnect? >> a lot of it is data is better than anecdotes. one hundred 50 million jobs in the us economy. the headlines we read are about companies that employ a million or two people between them. when we look at the comprehensive picture of the economy, averaging 250,000 jobs a month. to put that in perspective we need less than one hundred thousand jobs a month to keep

constant with the unemployment rate and the participation rate. we are running well above normal, steady-state job growth. a lot of people being laid off are finding other jobs and finding them quickly and easily. carleton: to the washington picture, debt ceiling talks dominating the conversation. increasingly contentious congress we are looking at, how much do you see the debt ceiling weighing on markets and the economy? >> it is weighing relatively little on markets. markets are probably right. the question is what probability would you put on that rightness? maybe 90% chance we get through this which a bunch of drama like there always is and it gets settled but i think there is a real chance, call it 10%, that something goes off the rails worse than it has before, because the views in the republican caucus in the house, the difficulty of leadership in

controlling the use of its caucus are in a place i have never seen before in my 25 years of working on these debt ceiling issues. carleton: looking at the geopolitical picture, how much do you see that weighing on the economy? >> there are some positives for the geopolitical picture. there is an indication china may be softening in its views toward the united states and foreign policy and economic policy. the reopening of their economy is on balance good news for the global economy and the united states as well. the tail risk from the russian invasion of ukraine, the economy is smaller today than it was 11 months ago. some things are moving in the right direction but there will always be new challenges to navigate. the chinese reopening will help with one hand, it will hurt with another, driving up global commodities including oil and what consumers ultimately pay at the pump.

carleton: it is a lot for main street, wall street, to be thinking of. what is the most important data point or economic indicators people should be focusing on to get a sense of the strength of the economy going forward? >> i hate this question, it is like which of your children do you love best? i love all of them, economic data, i read all of it. if i had to choose, the wage data to me is the most important especially the eci, we get that four times a year, we are getting it at the end of this month. that is key to understanding the inflation picture. more important than the number of jobs or the unemployment rate for job openings, though all of those are important. carleton: we avoided hurt feelings with that answer, so you shouldn't worry too much. thank you for your time today. where our top strategists are putting their money in 2023? we've got stock picks from the most respected investing pro-plaps on wall street next.

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carleton: this month, cristiano amon 1 gathered wall street strategists to get their market predictions for the year. we are seeing where they put their money, the cover story of this week's addition of barron. what are the themes you are seeing? andrew: the pics come from value-oriented managers, bill priest and abby cohen, they are betting the value which had a good year in 2,022 will do pretty well this year. carleton: what i am curious about, i respect our top strategists and your opinion. what is your take on value investing for 2023? andrew: growth was even this year.

carleton: what do you see happening with growth? andrew: growth stocks got beaten up badly in 2,022 and valuations got better. the big tech stocks are starting to move. carleton: again, the dc perspective, seemed like it was top of mind for a lot of our "barron's roundtable" members. megan: it was a reminder that after two years of debate the money is flowing this year. some of those were companies that benefit from infrastructure spending towards rebuilding roads and bridges, some with inflation reduction act spending which has a lot of money going to green technologies, electric vehicles, some are companies that do well because of the chip stock, toward the voting domestic investment of us semiconductors. carleton: then, you've been quiet, what are you excited about that you saw?

ben: one is wind resorts. basically on the growth of gambling in china, they sold most of their resort casinos in las vegas. right now is generating $1 billion before interest in taxes, not spending a lot on backs. the stop is rallying, but looks like a good long-term bet. what i found interesting is paramount global. everyone is worried about these tv stocks, everyone's to switching to streaming, away from television. paramount stock knocked down by 5% over the last 12 months because of it. spending on streaming, a ton of money going into it so the slowdown in spending but the ceo understands the market, selling tv stations and focusing on the network. also could be a target for someone like amazon or apple. carleton: it could be a

possibility. andrew, we talked about value pics, one car company begins with t and it is not to as low. andrew: abby cohen, a strategist for goldman sachs, likes twitter which is anti-tesla. it is among the major car companies, it has been leased committed to going all in on battery electrics, emphasizing hybrids, it believes the industry won't say, that the internal combustion engine cars will be around longer than people think. carleton: and in the financial sector. jack: one of the better known and best managed investment companies known for target date funds and mutual funds, plan a better stock market this year and a good balance sheet, 4% dividend yield.

carleton: looks like some of our strategists have ideas for overseas investment. megan: we are interested in airbus, that duopoly between airbus, they are taking the lead in that narrow body class of jets. they took the afternoon to restructure during the pandemic and are situated well and the european-based company asm l, a dutch company, talked about how semiconductors are going to do well. the lead supplier for those semiconductor manufacturers. if semiconductors are doing well they are needed from electric cars to artificial intelligence and suppliers do well as well. carleton: a lot of great pics and a lot more to read in this week's barron. you have more investment ideas next week, andrew will tell us what is going on at bultman sachs. stay right there.

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visit foxbusiness.com/"barron's roundtable". carleton: goldman sachs had a week that started pretty rough and ended pretty rough too. tell us what is going on. andrew: it started with a disappointing report on fourth-quarter earnings and got worse friday with news that federal regulators, into its consumer lending business, that consumer lending business after the last six years is turning into an albatross for goldman, losing money, no signs of an upturn anytime soon. carleton: we will get an update from goldman next month. they had an investment day three years ago. is there a serious cut ability issue for the bank and its leadership? andrew: interesting to see how committed goldman remains, getting outsize attention and generating outsize problems. it's a real test for goldman's ceo, david solomon, who staked

his reputation on building this thing up. carleton: when you look what happened over the last week, what do you make of goldman stock? andrew: it is down 8% this week, transferring one. one times the value, a 3% dividend yields but ultimately they will right the ship, shut it down or scale it back or fix it. solomon's credibility is on the line. this is a make or break year for solomon. if the firm doesn't do better it could be vulnerable. carleton: in true barron style be wrong to actionable ideas. hough i'm going to talk about ferrari. the argument in favor of it is it shouldn't trade like a mass-market car company, it should trade like a luxury goods company. that means steeper valuation premium for investors. they get rewarded for wider profit margins. seb coming out this year,

moving into green vehicles, should boost sales and ultra-wealthy and ultra-loyal consumer base that buys their cars for a quarter million dollars, they should be shielded from any recession. carleton: going from fast cars to fast food. what are you looking at? ben: can get qs are, they own burger king, and popeyes. the second fast food restaurant you think of in those areas but the stock has been a turnaround story, tracking things positively, it was operated by bm oh friday, looks like a 52-week high the could be ready to breakout. carleton: great ideas, thank you. to read more, check out this week's edition at barron.com, follow us online, barron online. see you next week on "barron's roundtable". . ♪ ♪ ♪ >> happy we can to all, welcome to the program that analyzes the