man and they said you stink at your job forget all of that and that's where this conversation is headed were you to be judged on our substance more than anything. >> amen to that will get away from tokenism and honoring real achievement whether in sport politics or anywhere else. that's all we got time for my things to kellyanne conway laura curran i'll be back with more commentary that the wall street journal march have a great week and thank you for joinin >> "barron's roundtable" sponsored by global x etfs. ♪ jack otter: welcome to "barron's roundtable" where we get behind the headlines and prepare you for the week ahead. coming up the federal reserve

went ahead with its ninth straight right hake -- rate hike despite banking uncertainty. i will ask michael gapen what happens now. has market turbulence made retirement seem scarier? we will share some actionable ideas. we begin with three things investors out to be thinking about right now. stocks ended the week where they started up a little bit but there's a lot going on. we will look at the hottest stock in the s&p, all about artificial intelligence. a closer look at ford's ev business, how it compares with competitors. my colleagues, ben levisohn, carleton english and andrew bary. the market ended up one%, but the road to a slight hike was bumpy. it ben: you would not know that you have a banking panic going on or that the fed raised by a quarter point into this banking

panic, the market did go up a bit. when you look under the surface things are not looking right. banks are cutting back on their lending and that's a problem for the economy. we see things like junk bonds, a big leap in the number of distressed issues. jack otter: the stock market might tell you things that are bumpy but the bond market didn't. ben: the two year yield fell since september, we watch that to see what the fed might do with rate hikes. you look at 10 year and it has fallen, growth looks like it will slow down. the bond market is saying we need to slow down or the economy will slow. ben: andrew: earnings could be week this year with the economy, another risk. jack otter: one thing that did work felt like the 2010s all over again.

ben: big tech lifted the stock market, apple up 3%, communication services sector did well also and these stocks are propping up the market but on the smaller side of tech we had snap up 5% this week on tiktok pressure we talked about. jack otter: let's look at the big tech stocks constantly getting bigger. what is behind nvidia? andrew: the highest stock in the s&p, the biggest gain so far this year and just past berkshire hathaway to be the number 5 stock in the s&p 500, all about artificial intelligence and chat gpt, natural linkage responses to search inquiries, enormous computing power, they make chips that make that happen. jack otter: to think that one company is greater. another tailwind is bitcoin because the chips are used for money.

andrew: bitcoin is up 67%. imagine how it help to their business. jack otter: the stock is pretty pricey. that priced in? andrew: the priciest in the s&p 500. the tech reporter doesn't think chat gpt may be all it is cracked up to be so people are valuing the stock in 2027 estimates and it is 25 or 30 times. a lot of good news in the stock. jack otter: let's go to the mostly analog economy. carleton: they are mostly disclosing their ev sales. what got investors nervous, they are losing $3 billion in sales this year off of $2.1 billion in 2022, 96,000

units, going in the wrong direction. when do they turn the corner and how do you compare it to toes like? for tesla, it became profitable when they were doing 400,000 a year, so our colleague estimates selling $500,000 a year, that could come in 25-26. jack otter: the banks are getting tighter with lending. carleton: as rough as it looks, you have to look at competitors such as rivian. when you look at the whole auto industry, the banks taking up lending standards, seeing evidence of that, where the rejection rate for car loans at 9% compared to 5.8% in 2017 and delinquencies going up too.

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mercedes-benz electric vehicles. what if we live to 100. i don't want to outlive our money. i keep eating all these chia seeds. i could live to be 100. we work with empower, even if we do live to 100 we don't have to worry. eh, not worried. take control of your financial future to empower what's next. jack otter: the federal reserve went with a 25 racist bank hike. this push as into recession? the head of us economics, michael gapen. thanks for being on the show. all the eyes have been on jay powell for years now but with this banking crisis or many banking crisis lending standards have been getting very tight and i've heard

anecdotally some smaller community banks almost shut the door, with those things combined how much will that slow the economy? >> that the open question. to some degree, this should be expected. this is one of the main channels through which the federal reserve can slow the economy. we should expect lending standards to tighten, we should expect loan growth to slow. the question, have recent events meant we would get more tightening than we thought? and anticipated tightening, is there a credit crunch around the corner, loan growth was slowing coming into this event, this will do the fed's judge for them, the fed said that, essentially mentioned that. it's a disinflationary shock, the fed will tighten the slower

loan growth will help the economy slow down and bring inflation. jack otter: combined those with a 25 basis point hike, has the fed been too aggressive? year-over-year inflation is pre-high but if you look at more recent indicators, case shiller housing index is down 6 straight months and everyone expect next week to be the seventh straight month, that is worrisome. >> too early to know. i don't think the fed has done much. housing has slowed, business spending on structures and equipment, manufacturing production is coming off so this is the next step, loans and standards are tightening. it is hard to argue if we add 311,000 jobs so essentially it is an investment, let's slow down right now. we suspect it will transition to a consumer slow down later this year. i don't think the fed has overdone it but we will see who can get a large negative shock

and the fed may have to backpedal. right now the data doesn't suggest that is the case. jack otter: the job is one thing that has held up but you have been predicting mild recession, the odds are high have a mild recession, anything change your mind? >> the events have opened up downside risk for the first time since the reopening phase of the pandemic when the economy has shown a lot of strength. i would say it's two fold. the path from housing to business spending to manufacturing to bank lending is consistent with the slowdown. it makes me comfortable with the outlook overall but i think these events represent downside risk to the economy. there are worlds in which the fed has to shift to precautionary rate cuts as it

has done in the past. we will see. it makes me feel comfortable with where we are. jack otter: the fed's original mandate in the early part of the last century was stability in the financial sector and that is a real issue. how do they find a balance between not wanting a run on the banks but also not giving bankers and open-door to take risks because the federal government will backstop it. >> good moral hazard argument. first and foremost you have to respond to events if you think there is a systemic risk and that is what they have done. that was the fed's original mandate. i don't want to make this overly literal. it is good the shock happened to the banking sector, the fed is good understanding these issues and has the tools to fight them directly in the experience.

there's experience that should help us out. every time we do that it raises the risk of moral hazard. what will likely be coming down the road is additional regulation, to some degree the reversal of roles in 2018 that reduced the tory burden banks with $50 billion to 250 billion in assets so you come back with more regulation and hopefully ensure the incentives between bank owners and shareholders. jack otter: they missed it this time. one more question, a few seconds left. it seems there isn't much reason to go with the small bank right now. if i had a big payroll i might think i might put that with one of the too big to fail banks. is there a danger money will flow at the smaller issues? >> you could argue high yields on money market mutual funds

are causing deposit outflows and recent events could lead deposits to flow to bigger banks. that would be an ongoing challenge over time. jack hough: thank you. turmoil in the markets is scary but good for your retirement so it's decided, we'll park even deeper into parking spaces so people think they're open. surprise. [ laughs ] [ horn honks, muffled talking ] -can't hear you, jerry. -sorry. uh, yeah, can we get a system where when someone's bike is in the shop, then we could borrow someone else's? -no! -no! or you can get a quote with america's number-one motorcycle insurer and maybe save some money while you're at it. all in favor of that. [ horn honking ] there's a lot of buttons and knobs in here. the new chase ink business premier card

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jack otter: your ira balance may be smaller than your go but it is a good time to invest for retirement. stocks are cheaper and bonds yield something. in the cover story, barron looks at the new retirement landscape. when you hear about strategies for investing in retirement, there's talk about how old you are, your risk tolerance. i don't like that question.

here's what people don't understand. your portfolio should be different depending on what kind of job you have. ben: talk about 60-40, 60% stocks, and the bonds the going to that. if you are young you might want more stocks because you have more time. the older you are you have less. there's this concept your job makes you more like a stock or bond. if your police officer you have jobs very steady, likely not going to laid off, a steady stream of income, you can take more risk in your portfolio. some would say, it all depends on the stock market. you have to be a little more careful and safe because your job, you are like a stock. that is one more thing to think about with other things.

jack otter: a teacher a police officer paid less, they need the growth from stocks. the guy may not be paid like wall street but that's another story. the 60-40 portfolio, 60% in stocks. within that 60%. andrew: should you diversify outside the united states third or more of the equity portion of your portfolio outside the us. oversee stocks, historical underperformance relative to the us, 12% annualized in the last 10 years, only 4% outside the us. jack otter: the response is the companies in the us are better. andrew: all you need is the s&p, 1/3 of earnings in the s&p are national so he would argue

the best companies get international exposure. jack otter: another part of the stock market that underperformed is small caps. should investors think about increasing that our location? andrew: they underperformed for 5 or 10 years, valuations are historically low. a good idea right now. jack otter: if the falling dollar continues, it looks good for domestic sales. been made a reference to age, getting more conservative as you age, the conventional wisdom. carleton: people think of it as all or nothing. when you look at people who are looking at retirement in 10 years, you should start thinking preservation of capital versus building wealth, but it's not all at once. you think about it gradually as you get closer to retirement, not all at once. when you hear preservation of capital, people automatically think i've got to go all in on

treasuries. within the our location you are looking to dampen the volatility so rather than the stock portion of your portfolio you start thinking more income focused on the bond side not so much in high-yield but more conservative. jack otter: people should not be 65 as a finish line, the finish line is however long you live but a controversial question debated in coffee shops, books written about it, when qualcomm one writes about it we get a million comments, went to get social security? carleton: wait as long as possible. you are eligible at 62, retirement age is 66 to 67 but the maximum monthly benefit you get is when you turn 70. if you take it at 62, if we wait until 70 you get double what you could have gotten at 62. wait as long as you can. i want to say people have

different circumstances whether there is a spouse or someone else in the household eligible for social security, that will way into your decision-making. jack otter: the surviving spouse gets a larger of the two. people say the government will run out of money and they will never pay me, people who vote are older people who get social security, i don't know that that is going to happen. i have always been anti-annuity but the way interest rates have gone up and life expectancy is increasing, they are not the best solution, financial advisors build annuities, they put tips and bonds together but something more attractive, you are trying to insure yourself against living to a hundred when you might run out of money. is there a place for an andrew bary this -- andrew: whether they are dividend paying stocks,

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ordinary etfs. visit foxprincess.com/"barron's roundtable". >> when covid crashed the market a lot of nimble investors made money and preferred stocks. there's more turmoil in the market. andrew: it is a senior form of equity, bond like interest rates are fixed, you see turmoil and you can get 6% plus yields on bank preferreds, 2. 5 points more than the yield on treasuries.

jpmorgan, bank of america, wells fargo, morgan stanley, traded like stocks, they are pretty liquid. jack otter: sometimes they sell for less then par. andrew: interest rates far you can make good money on preferreds. there's capital appreciation that you didn't have the euro two ago. banks get in trouble, you could get hit pretty hard. silicon valley bank and signature bank, preferred stock issuers, have stopped trading on the new york stock exchange and there may be little or low recovery value. jack otter: the big banks could go down in value. andrew: other issues at the banks. jack otter: let's go to actionable ideas.

ben: looking at oracle, trading at a 52 week high, jpmorgan touted the progress they are making with their cloud business, looking pretty interesting. jack otter: i like your pick, has a connection to social security. carleton: the pick with humana. they focused on ensuring older americans are tied to the medicare advantage plans. the stock trades relatively cheaply as the market multiple but has twice the growth of the s&p. ben: if you don't think medicare will cover your costs, any insurance policy, the leading what will help out. thanks for that. great ideas. to read more check this week's addition of barron.com, follow us on twitter,@barrononline.

we have a special farewell. maureen murphy, who has been our producer since the launch of this show is moving on from the television business. we are going to miss the reassuring sound of her voice in our ear every week, but we know she will be watching a separate when she goes to italy, a well-deserved trip and she can tape the show. thanks for making this show come together every single week. that is all for us, see you next week on "barron's - [announcer] this program is a paid advertisement from u.s money reserve, a company not affiliated with the u.s government or the us mint. philip n. diehl is the president and spokesperson for the company. the markets for coins and bullion are unregulated. prices can rise or fall, so buying these items carries some risks, as performance of a coin or the market cannot predict future performance. views and opinions expressed in this program are those of the advertiser and not the views of this station or network, its management, or ownership. - [narrator] the stock market has recently been experiencing wild swings up and down.