the country, they don't like it and they know it doesn't have to be this way and they know it's not guns it's about crime and law and order and justice reform. james: we got to go but this question of guns you see a lot of cities where the gun laws haven't changed in the surge in violence and prosecutors he won't prosecute and defend the police is not a phrase anymore but are we still dealing with the legacy of that moment. >> the answer to this question, why is the crime rate in red states where they don't defend the police, where they do not prosecutors are prosecuting, why is the crime rate higher than in the blue places. james: because they have blue cities in the states. >> that is not true. >> will have to debate this next time. thank you. tammy bruce and maria hearth, will be back next week on the "wall street journal at large". 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. key economic data closely watched by the fed showing mixed signals. is disinflation on the horizon recently hidden -- is inflation too sticky? what is on the mind of warren buffett? bircher's annual meeting only a few days away. even though inflation isn't beaten yet the yield on our bonds is get a big hut. where do you find the best return for your cash? we begin with three things investors ought to be thinking about right now. big tech stocks led the week's market rally. now investors are turning their focus to the wednesday rate hike decision. the bank turmoil isn't over.

depositors yank their cash out of first republic. is the contagion contained? introducing can view. what to expect from the biggest ipo of the year as johnson & johnson spins off its health business. ben levisohn, carleton english and andrew bary. the s&p continues to inch higher on the surface, not much is happening. kind of boring. ben: the stock market had a microsoft landing, pardon the pun. microsoft had great earnings, alpha that went up 1.7% after it earnings, meta jumped 13% and these big stocks are doing the heavy lifting for the stock market. that is why all three major indices, the s&p, the dow and the nasdaq finish tire. jack otter: investors cheered meta-getting out of the meta-verse. here's the thing. big tech generals are leading

the march higher, they are not doing very well. what's going to happen? will they drag everyone with them or are they going to move aside? ben: they will move aside. they are driven by lower yields and bad sentiment toward big tech stocks but we've seen both of those ready to reverse. everyone is buying them because they say these are things that worked before, had a bad year. they've done great. then look at the yields and they have come down. as far as they are going to for a while. then you look at everything else and acting as if a recession is coming. you need something to pick up the baton. jack otter: we have the fed meeting, 25 basis points and we will have a jobs report for april. what will you be watching? ben: we are listening to what the fed says, not what it does.

the market expects a quarter point hike. that is what will happen. on the market expects a stop. i think the fed might portrayed as a pause. the stock market is predicting a cut later this year. that is what they are listening to. the job report will be important but it will come after the fed meeting. not sure it will have much impact after the wednesday meeting. jack otter: we don't have to worry about a banking contagion. it seems to be different. carleton: we saw most of the banks report earnings. we have a lot of beats, most were in line. it was within a reasonable margin. what shocked the market was the extent of the deposit flight, 100 billion left, jpmorgan and ten other banks. with that, it is a unique situation, a bank that caters to wealthy clientele, known for

offering sweetheart deals, mortgages, and other lending. that's not a traditional banking model that works in a rising rate environment. jack otter: mortgages on late houses. andrew: they are concentrated in east hampton, connecticut. carleton: and paying one% on some of the. the average loan portfolio had a yield of 3.2% which, not very enticing for anyone looking at the banks. jack otter: does this mean customers at regional banks can feel her money is secure? carleton: customers of the banks, fdic insurance, 250,000, that applies to most people. you have to think of first republic. well in excess of that, look at the uninsured deposit levels, not just the same extent it was at first republic on a stocks might be challenging but your money, your savings are safe.

jack otter: the ipo market dried up when the market went south last year but there's a big ipo coming, johnson & johnson spinning off itself. andrew: their consumer help business includes brands like tylenol, band-aid, listerine, johnson's baby products. it should go pretty well. jack otter: i don't how they ended up with ken view but one of the best times to buy ipos is when no one wants of them. if you can come to market in this environment it is not healthy company. andrew: it is valued 16 times last year, 3. 5% plus dividend yield, durable brand and reasonable growth prospects. jack otter: we have two companies instead of one, you think they are similar? andrew: j&j goes faster with

its pharmaceutical and medical devices but from a stock market perspective it can hold its own. jack: you thought the spinoff was not necessary. jack: don't know why they need to do it. for years they said the goat company was better off together. they mean jumping on the spinoff trend in the industry. you have a nice company merging from j&j later this week. jack: the fed's preferred inflation gauge remains high ahead of the rate hike decision. headline inflation continues to fall. i will ask charles schwab, liz ann

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jack: headline inflation is showing signs of improving. core measures and other consumer data closely watched by the fed are sending mixed signals where the economy is headed. charles schwab, chief and sediment -- chief investment strategist liz ann saunders joins us. >> economic data has been so volatile recently, you like to look at leading indicators to cut through the noise. what is the data telling you now? >> the index of leading economic indicators put out by the conference board on a monthly basis peaked 15 months ago. it has been almost steady move down, the 2 -- to the tune of 8% negative from that period when they peaked. that is deep in recession territory. perhaps one of the reasons it

hasn't yet manifested itself in clear recession is there's a bias within those indicators toward the goods/housing side of the economy plus financial metrics like the market. doesn't pick up as much in terms of what is going on in services. there's a bit of a cavity out to the leading indicators, goods versus services comparison. jack: consumers seem strong on hotels and restaurants. that said, do you think this means recession is inevitable? this is barron's cover story. >> we've been calling this a rolling recession because you had segments of the economy in recession territory. housing, many goods oriented segments of the economy particularly consumer goods, certain areas within tech representing stay-at-home

beneficiaries. we had the more recent offsetting strength and you pointed out consumption bias toward services but across the board of consumer spending, the consumption number looked pretty good, there was deceleration with january given a lift because of much warmer ib iweather than usual as we look at simple and quarter data. ibly15 if jerome powell were to ask what he should do, would you say after wednesday, stop and pause for a while? >> i'm not sure they should hike on wednesday but i am not sure. he's not going to call me. given the turmoil in the banking system, the uncertainty, not to mention there is a lagging indicator that is inflation knowing the effects of monetary policy are

in the future but given market expectations of the fed, best guess that is what they are going to do. does he more forcefully him that was it or does he stay that independent and emphasize what will pick up in the press conference? jack: we were talking about the fact that the market's climb is mostly on the back of a few large tech stocks. you've written about the potential dangers of the market relying on a few generals as you call them. will the soldiers pick that up >> we are not seeing that but it is not just the bias to the very large names. they are not all tech. they are techy communications services. the fact that outside of those

mega names is more biased in defensive areas like consumer staples, it is a mixed message, going into the safety of those big names. the leadership reflects that economic uncertainty, hence the biased toward defenses. it is a mixed bag, a tough one for investors, no question about it. jack: what is the best playbook for investors under those conditions? >> we've been m.div. that -- emphasizing fact investments as opposed to the model sector type calls and factors, just another word for characteristics. the wrapper around the factors we've been focusing on is quality. when you think about the macroenvironment you want to look for companies that have strong free cash flow, strong

balance sheet meaning high cash, they don't come to the banking system, lower volatility as opposed to higher data. it is a mix of the some growth factors, some value factors but the appropriate moniker is stay focused on quality, this is not the time to go down in quality. jack: thank you so much. early insight on what to expect from warren buffett, berkshire hathaway's coming needing. meet three students all learning to save and spend their money with chase. freedom for kids. hungry? thank you, chef. control for parents. nice. one bank for both. chase. make more of what's yours. ♪

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jack otter: next weekend, time

for capitalist woodstock, 30,000 people descending on omaha for the berkshire hathaway meeting. andrew bary has been following warren buffett for decades. you had a hamburger with him once. what are you looking for? andrew: i had a hamburger, he had a blt and a coke. i'm looking for what he thinks of berkshire's equity investments, whether he want to purchase all the petroleum, 25% of it, succession and comments on some key berkshire businesses like geico, burlington northern railroad and utility business. jack otter: buffett where so many hats, he ceo, but the question is who will succeed buffett when it comes to running the portfolio. do they have the chops to follow the big guy? andrew: buffett think they do. they went to the berkshire equity portfolio. you know how well they have done.

one thing i like to hear buffett say is how well they've done versus the s&p 500. i believe they are behind the index. we might find out next saturday. jack: how long does buffett stick around? does he stick around until he dies? jack: andrew: buffett is turning 93. he shows no signs of wanting to give up his top job. berkshire is his baby. he loves it. you wants to put the finishing touches on his mona lisa. carleton: timely reference ahead of the coronation. to the portfolio, why is buffett selling banks? andrew: he's concerned about the issues of the past couple months. some bank stocks in the last couple years, goldman sachs, jpmorgan, he has been right about that. carleton: do you see the big elephant he's talking about?

andrew: he might purchase a homebuilder. if the price is right he would be interesting. ben: should we be buying the stock? andrew: the stock is attractive. it is $500 a share which is 20 times earnings, given berkshire's strength, a media index fund given diversified incomes. it's for individuals. 99% of his net worth and berkshire, a little high for an individual but many investors have 25% or more equity investments in berkshire and quite comfortable with it. it offers protection, nice thing to have in the current market. carleton: unless your income oriented looking for dividend. will ever pay a dividend? andrew: he wants to reinvest it. i think he wants to pay taxes, a few hundred dollars a year in

taxes. don't think he wants to do that. ben: he held it in treasury bills, he knew he didn't want to be in long-duration bonds. he's earning 5% on this money that is earning quite a bit now. andrew: sitting with hundreds of billions in losses, berkshire invested heavily in equities so it's not been entirely risk-free but berkshire is in excellent condition. jack: the largest single holding his apple. you think warren is confident in it? andrew: it's more of a consumer company as much as are tech company. he has said he doesn't think apple users would give up their phones for even $10,000. i don't think i would give up my phone for $10,000. jack otter: you say it makes you a better employee than a worker.

your income depends on the iphone. carleton: it is an efficiency tool. it just doesn't work quite as well. jack otter: it works better. one question that has been in the air for years. after buffett moves on does berkshire hathaway break up in terms of parts? some people say the parts may be worth more than the whole? andrew: some are worth more than the whole, he thinks the company is bad together. he structured the board comic putting his daughter on the board so after his death it may hand together but as soon as he is dead, they may come out for his successor and you could see pressure break up the company. jack: thank you. you have interesting investing ideas for next weekend. a recommendation on how to get the best bang for your buck as i bond yields are expected to fall. - double check that. eh, pretty good! (whistles) yeek. not cryin', are ya?

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ordinary etfs. visit foxbusiness.com/"barron's roundtable". jack: on monday, the interest rate on high bonds will reset dramatically going down north of 9% at one point. it is one. 3. is it still a good idea? andrew: these are the treasury saving bonds that adjust with the rate of inflation. inflation is down the last 6 months but it is not bad relative to money market funds and attractive attributes to i bonds right now. jack: they have a compounding evidence that's worth explaining. andrew: interest is added every 6 months, interest on your interest and that illuminates reinvestment risk with bonds

right now. jack: another option for investors is tips, treasury inflation protected securities, what are your thoughts on those. andrew: you can purchase etfs which offers you exposure. they yield a percentage point above the inflation rate which is attractive right now. jack: a couple stocks, what's your idea this week? carleton: it is excited about being on vacation in ireland and scotland but i'm looking at diario. i plan to go through their portfolio for the next week looking at the johnny walkers. challenging stock. it does treat more expensive but below its historic average. if you are looking at the economy thinking we are going into recession, liquor stocks

tend to do well during those times and a 2% dividend yield, it's not the 5% you are getting elsewhere. jack otter: people keep buying. what your idea? ben: a pharmaceutical company that got off to a great start in 2022 and went sideways for nine months but got some good use this week when a company announced its cystic fibrosis drug didn't work. this was an overhang for a wild. with that, vertex stock jumped and it will break out. jack: and other recession resistant software. to read more check out this week's addition of barron.com. follow us on twitter@barron online. that is it for us, see you next week on "barron's roundtable". ...

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