they are meddling with the sport in the competition, novak djokovic 20 over in one recent tournament, he is scheduled to come to the united states for the u.s. open for the covid rule supposed to expire in may there keeping them out of the store and tainted the competition when it comes to winning these titles. gerry: they can't let go, this is a problem hundreds of thousands of people coming across the border and vaccinated that seems to be fine but can't let go of the control and they need to have over one tennis player that clearly represents a threat to nobody other than his opponents on the court. that is it important for this week my great thanks to katie pavlich and christopher bedford will be back nex >> "barron's roundtable" sponsored by global x etfs.

jack otter: welcome arron's ro get behind the headlines and preparing for the week ahead. matt favor names his favorite investments for the next we 10 years. lawmakers in the biden administration budding heads over funds that way climate risks and other concerns should be allowed in retirement plans. we take a closer look at esg investing. we begin with three things investors ought to be thinking about. stocks were clobbered after jerome powell's hawkish testimony to congress at a jump in a key bond yield. will inflation fever break? regulars take control of silicon valley bank, the biggest bank collapses, the global financial crisis, could other banks be in trouble? norfolk southern dominating the news with multiple derailments.

we looked at which railroads are cutting safety spending for profits. my colleagues, ben levisohn, carleton english and jack hough. stocks were clobbered. and ugly week on wall street. the and things investors didn't like, which did they not like the most? ben: i start with the two year yield hitting 5%. the level when things start to break. it happened after powell talked to the senate and said rates go higher and will stay longer. we had that 5% get hit and the market falls in, things calm down and we get svp financial, the bank collapses. a lot of that has to do with higher rates. when you look at that it goes back to these rate hikes damaging everything. jack otter: the two yielded 5% in the market lost almost 5%.

ben: whenever things started falling apart, dropped five percentage points and had its biggest drop since 2001. jack otter: you had a scary friday people have two days to get more worried and monday opens. what do you expect? ben: not so worried. might give people a chance to calm down. some think problems in the banking sector would get the fed to dial back the rate hikes a little bit. we have a payrolls number friday that showed a little bit of a goldilocks report. jobs are being created at a high clip. the an employment rate went up because people are looking for jobs. that is a good thing. wage growth slowed down. then we get cpi on tuesday. if that number looks like it is goldilocks as well, then things are okay. jack otter: you keep an eye on the technicals.

what are the charts telling you? ben: the 200 day moving average, a level people got excited about when the stock market closed above it earlier this year. we've seen this in the bear market were closed above 200, can't stay, drops again, that is what will happen. jack otter: been talked about the idea around wall street that the fed would hike rates until it broke something. did just break silicon valley bank? carleton: pretty much. that was the decision of regulators on friday. what happened is we saw a number of things, the effects of higher rates. you have deposits dwindling because as rates go up things become more expensive. you have deposit base looking to put their money in higher-yielding accounts. then you have the deposit shortfall, the banks rely on deposits for low-cost funding. they have to get that funding

elsewhere which means selling down their securities portfolio at a loss. jack otter: they are very low yields not worth 100%. the banking industry in general, stocks moved a lot over a two day period. do you see a threat to other banks as a result of this? carleton: banks had their worst day since june 2020. what we have to do is take a look at big banks versus smaller banks. with the larger banks generally safer, so much regulatory scrutiny. capital levels strong. they go through a stress test to make sure they can withstand any myriad range of macro and market risks. the big banks looking good more stable. i would be more cautious since we have more visibility. jack otter: is there money safe?

carleton: the fbi ensures 2004 accounts, that applies to most people. jack otter: following the awful news from east palestine, ohio, barron looked at this industry. what did we find? jack hough: norfolk southern cut its per mile spending on train inspections by 8% a year from 2017-20 one. cut spending on repairs and maintenance by 7% and 5% and no cuts to those sizes by big railroads, union's pacific, north work -- norfolk southern had three serious accidents including the awful call chemical spill in east palestine. the national safety trans rotation board says it is under special investigation for safety culture, we diligently monitor our trains and infrastructure to identify hazards. this is part of the broader

debate about the industrywide cost cutting move called precision scheduled railroading, longer trains with less switching, allows you to close rail yards and reduce head count, it is good for profits, good for share prices. labor groups say it's a problem for safety. the train companies dispute that. berkshire hathaway doesn't do precision scheduled railroading. it is forcing customers to adapt to railroads rather than the other way around. jack otter: he picked the right company. investment strategies that worked for the past we 10 years won't get you through the next ten. portfolio manager ned favor shares his plan for the decade ahead next. >> "barron's roundtable" brought you by global x beyond ordinary etf. visit foxbusiness.com/"barron's roundtable".

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jack otter: the volatile and unpredictable market has investors realizing they can't rely on their tried-and-true strategies. meb faber is here with his take on where the market is headed next. thanks for coming on the show. let's start with the news at the end of the week. what's the take away for investors from silicon valley bank's implosion and you expect contagion? >> the first thing if you are a bank deposit or, don't put your eggs in one basket, i don't expect contagion, the story is simple. it is a story as old as time which is a bank, you can substitute the word hedge fund, made a specific bet and their bet was they invested a lot in investments that do poorly, deals went up. that's what happened. it is simple, this happens to a

lot of investors. you can substitute bonds for real estate or commodities or stocks or whatever it may be, but when people have an investment and don't cover the possible or improbable right tail left tail events they can get into trouble, not just a little trouble but catastrophic trouble. jack otter: you accurately predicted the market had farther to fall. what your crystal ball tell you now? >> bad news first and then the good news. good news, stocks are still expensive. this is brought market, s&p style, we like to do the 10 year ratio around 30. not as high as it was. over time the average is 18 to 22. we are still high.

the problem comes if inflation hangs around the average is 18 to 22, it is about 12. 12 is a long way from 30. that's the bad news. the broad us market, the good news, it is one of the best times in history to invest in value stocks. if you look at the spread, we like to use the words shareholder and yield, they pay out dividends and buybacks and have a lot of cash flows, these are the biggest threads we have ever seen in the united states and the biggest threads in foreign developed or emerging too. two sides of the same coin. it is problematic and lots of places you think you can hide out. jack otter: starting with value, what change makes you think this is the big switch we've been looking for? >> i think the regime shift in

2,020 which is the interest rate bottom as well as inflation bottom, wasn't long ago, after sovereigns in the world had negative years, interest rates have been running up and we also had a second inflection point, the end of last year which is peak in the us dollar, 20% over value versus currencies so this double tailwind. if it's a triple tailwind, expect inflation to continue. all these things happening at the same time. should be wonderful for value stocks, also my favorite, emerging markets, deep value as well. jack otter: you have the following dollar, and stock market performance. they are destined to do well.

>> you separate the business from the stock, cisco and 99. the stock went nowhere. if you look at these foreign country stock markets, and many of them have gone nowhere and even know where they've gone down. you talk about high single digit dividend yields on top of that, all these are wonderful signs. and and foreign stocks versus us stocks, which one outperforms any given year. we finished one of the longest periods, stock dominance. almost half the world is about labor shortages. >> most investors are overweight in the us.

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jack otter: the biden administration and leaders not seeing eye to eye on esg investigation. they reversed a trump role in retirement plan offers. thanks for being on the show. let's explain what they are arguing over, and a certain investigation strategy should be allowed in 401(k) plans.

>> to include funds that consider esg in their investment decisions and allows it to be a default option meaning employees would have to opt out and choose another fund but for practical purposes, not many include these funds. vanguard tells us it is 15% of plans. jack otter: esg stands for environmental, social, governance issues that investors, portfolio managers think about when compiling a portfolio. why is that an issue here? >> a lot of people don't know what esg even stands for. what is esg? it means different things to people. easier to think of it as risk management. he esg is just data and assessing risk has always been

part of investing. investors want to know about things like rising sea levels or how it could impact these operations. it is important to stress that esg is not the same as impact investing. the goal is to make money by investing in companies with positive impact on the planet or society. jack otter: a lot of portfolio managers i talked to don't count themselves as esg investors, environmental issues and government issues, it can blow up in a shock. norfolk southern is an environmental issue, and 3m is another one that comes to mind. no one knows whether it will have to be liable for cleaning this up.

whether they count themselves up as esg investors or not. carleton: talking about risk mitigation, that makes a lot of sense to me. how is it esg is such a politicized issue? >> we heard a lot about esg and woke capitalism and last year, former vice president mike pence wrote a scathing op-ed against esg that snowballed from there. the issue is they say these big financial firms are abusing their power to advance what they call a liberal agenda on issues like diversity, social justice, especially climate change. texas and florida are among the states, in florida, governor ron santos has barred state pensions from considering esg factors in their investments.

jack hough: whatever the agenda of esg investing, is this a strategy that does as well as the market? worse? better? >> before we go to performance, it is hard to define how esg investing, esg investments because of concerns of something that is misleading investors about their practices but on performance, morningstar says the most sustainable ones underperformed in 2022, but that is not that surprising if you consider many, oil and gas companies, and last year the energy sector was up a staggering 66%. i will note that barron just published its top one hundred sustainable companies in the us and in 2022, the list match the performance of the s&p 500 index. and in the four prior years, outperformed the index.

carleton: how are these esg funds addressing the backlash to the back lash to the back to the backlash, however you want to put that. >> the legislation is fizzling out. just last month, lawmakers in wyoming, which is a coal rich state. and they boycotted energy companies, some pension funds say legislation, and >> >> some do really well. but jack is going to share his hot tip for beating the market and sleeping well at night. say right there. so you only pay for what you need! whoo! we gotta go again. only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪

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jack otter: we used to talk about tina. there is no alternative. now there's lots of alternatives to stocks. jack hough: i'm concerned you oversold it but i asked the top us stock strategists about beating the market, he says his recommendation, 6-month treasury, paying 5% right now and he thinks for the rest of the year the s&p will return a few of one person. be of a security, only 2% or 3%. or 3%. it recommends a strategy it calls -- raise your hand if you want me to explain, you start with 24 stock market industries and leave out the ones that are not priced to outperform the 5% or 6%, there's not much left.

energy, media and telecom. if you own in a spend -- s&p fund don't worry, you are iny when you should be outy. the s&p is price to be 5% a year over the next decade and a point our two for dividends. jack otter: i love your pics. carleton: we saw banks sell a this week. the reason i say to purchase kba, it is a large bank index. a lot of big-name selloff on the third, especially thursday. a lot of these banks are trading at or below value or at historical averages. a good opportunity for the heavily regulated banks with diverse sources of funding. wait for visibility when you look at the regional businesses, there may be other buying opportunities. jack otter: if you don't want to be diversified? ben: waldman sachs.

this is a company that has been out-of-favor because it doesn't have its consumer banking has been terrible, wasn't able to take advantage of low consumer deposit rates, and no one will do that anymore. doesn't have to worry about that. a solid investment banking, stock trades one time book value. looking pretty good. jack otter: check out this week's addition of barron, barron names the top financial advisors in every state, don't forget to follow us on twitter. see you next week on "barron's roundtable". call it racist for what it is and those who are racist but leave drivers alone, come on. >> from the fox studio in new york city, this is "maria bartiromo wall