on monday, which already has fans buzzing, a promotion of the event giving which yous to potentially ground-breaking product releases. we'll be keeping an io eye on it and report all that's happening on mornings with maria at 6:00 a.m. on fox business. over on fox news channel on sunday, 10:00 a.m. eastern on fox news channel for sunday mornings futures and exclusive interviews with house speaker kevin mccarthy, ranking member mike lee, congresswoman anna paw lynna newman and newt gingrich with me sunday at 10:00 a.m.. that's it for us here on fox business. have a great rest of the weekend. thank you so much for being with me, and i'll see you nex

>> welcome to barron's round table getting behind the headlines and prepare you for the week ahead. i'm jack otter. coming up, most investors would rather paloer taxes and franklin tempton cio explains where to get tax free gains and we'll dive into the next big trends for the coming years and years t intelligence and how you can invest and some earning more based on company's esg performance. is this another ploy to raise salaries. we begin with three things investors ought to think about right now. wasn't just big tech this week. the entire market did well. plus, the may jobs report shows while the economy added more jobs than expected, unemployment rate shot up. more big retailers are getting caught up in the culture wars with ad campaigns tied to pride month and interesting investing opportunity here. and an ftc crackdown on mna

means arbitrage funds may be great investments. i have my guests with me tonight. ben, we've been talking every week about how it's only tech stocks driving the market higher, but we saw everything go up practically this week. each of the major indexes up more than 2%. >> yeah, the market is having a party and everyone is invited. so tech shown as it has been this whole time, apple has almost hit a record high ahead of the developer conference and may show off vr goggles and saw the dow go up 2% this week and that was on the strength of industrials and s&p up 1.8% and this is great. even better than that, small caps, which have been awful this year were up close to 3%. it's really everything that is going up finally, and that's the great thing to build a rally on. jack: partly because it's a gold i did locks jobs report? >> that's a big part of it.

the unemployment rate ticked up and wages didn't go up very much and put that all together and get a number that wasn't too strong and strong enough that we don't have to worry about recession and not so strong that the fed goes ahead and hikes next week. jack: ben, over the course of the week we saw a dramatic increase at rate hike pause. >> that's right. everyone for sure there was a rate hike in june but on thursday after a couple fed speakers talked and it flipped and 75% chance of a pause and even with the jobs number that came out, the stronger number, that didn't come down much and came down to about 68% chance that it's going to be a pause. looking ahead, it really does seem like the market expecting the fed to stop and wait come the june meeting, june 15th. >> big sirely for equity novices toker. >> re--- investors and going up for stocks and few companies that got criticized for pride marketing. >> yeah, a lot going on in the retail sector and look at

something like li lulu lemon anw double digit stock growth and nordstrom did very well and macys warning for lower sales guidance ended up ending out the week well. the thing to look at is what's going on in other aspects of the retail space. lot of head winds obviously coming from some of the headline issues around companies like bud and target getting embroiled in some of the marketing issues around pride and things like that. probably not too much risk for the companies. look at fundamentals and more than just the headlines so there could be entry points there. >> in fact, i think, andrew, you said target is a decent investment right now? >> yeah, it looks good and things will probably blow over and trading big to wal-mart and a 3% dividend yield. jack: carlton, one thing is twist and slack from apollo on the show and he put out a chart

that said cradling seizure disorderses spiked draconian -- delinquencies spiked dramatically. >> yeah and against all age groups as well and drawing comparisons to the great financial crisis in 2008. looking at consumer health, it's a spotty picture because you have whether you call @ luxury sectors of the economy or higher end. those lulus and nordstroms doing pretty well and a company like a dollar general warning about weaknesses in their customer base. be and with that wonderful placesser if that's unique to lower income customer or more a problem with dollar general not managing inventory and labor as well. >> we're watching what's going on with the economy. >> andrew, an obscure economy a low digit performer and a steady eddie and a big opportunity right now. >> yeah, biden administration is launching a war on mergers and ftc, federal trade commission under its chair dena --

lena kahn and the purchase of verizon therapeutics and that's widening out spreads and creating more opportunities for investors right now. >> jack: briefly explain how the merger arbitrage thing work? >> if you want to invest and warren buffett doing this for decades, buy the companies that target the acquisition and typically will trade a discount to the value of a deal and basically hold on to the target stock till the deal closes and make that tread. it's often very tight and gotten wider as investors are pricing in more risk as the government goes after more deals. jack: your point is that the deals are actually probably more likely to go through than not. >> well, the deals may do better than wall street maybe thinking right now. i think some of the legal theories that ftc is putting forward and they're dubout and can get -- dubious and get double digit rushes for an area that's not providing concerns. jack: a few seconds left and part of the thing going on is

politically is an effort to put a chill on the market for the big mna dials. >> yeah, have merger activity slow down and they feel even if the -- their efforts don't work in terms of individual deals and chill merger activity and be deterrent to more deals. jacker: thanks, andrew. strongs job data out for may. what does it mean for the economy? we'll get reaction from franklin tempton next. ♪ we're going on a bear hunt. ♪ ♪ going on a bear hunt. ♪ bear? ♪ we're gonna catch a big one♪

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i'm joined by sonal desih. thank you for joining the show. what was your biggest take away from the jobs report on friday? >> look, the labor market is wrong. from a market perspective, i ate saying this -- hate saying this but most markets would actually have preferred a slightly weaker number. the labor narcotic is strong and american -- market is strong and american consumer is strong and the market is an excellent way to gauge how long the strength of the recovery and we're still recovering and we'll continue. i take away that it puts the fed in a very difficult position on balance i don't think they'll raise, but it makes even more clearer that they're on a pause and not at a stock. this is not the end of the hiking cycle if they don't raise next week. jack: that's an interesting question and of course there's a lot of discussion, when do they hike? what did they cut, et cetera. you're looking at the forest and not the trees and you've pointed out this easy money we've gotten

used to over the past decade may not be here for much longer or we may not see it for awhile i should say. can you explain that? >> yeah, we in the markets are so focused on the next great hike. i've lost count of how many times people ask me, what is the peak. it's not the peak that's interesting. it's the valley. the point is at some point the u.s. will face a slow down, a recession. at some point the fed will cut. i happen to think that's not happening this year. but the more interesting thing is where does the fed cut to. there's many, many people that think it'll go back to pre-covid, and i think that we're really going back to pre-gfc. the aberration if you will was not covid. it was -- the aberration was not the post-global financial crisis period where interest rates were really, really low or rather beyond the opposite. that was the obstructing cerumen

ration. the fact that we had -- aberration. the fact that we had rates as low as they were for the last 15 years. if i look at where the fed thinks the normal rate or neutral rate for interest rate is 2.5, to 5%. that's not right. if i look at what academics serious studies look at, for decades going back to the 50s and centuries, the neutral rate of interest is around 2.25. add in inflation, neutral fed funds should actually be over 4%. it shouldn't be as low as what the fed is currently programming. jack: yeah, people don't realize that literally the past ten years were some of the lowest rates in 3,000 years according to bank of america study. okay, what does this mean for portfolios and how should investors set up for this? >> what investors need to do is recognize that we are not looking -- we should stop looking for equity-like returns

for fixed income. fixed income, i hate saying in, it's supposed to be a boring asset trust and you're supposed to get not equity-like returns and equity-like volatility. that's not been the case this year and going further forward, i would hope it does once again begin to be the case. that you look at returns where, yes, i think rates are going to go higher including in 10 year treasuries and then we don't see that jumped in because if you blink you'll miss it getting into duration. you go through an extended period of time where rates grind lower as the economy weakens. how do you position for a period like this? well, you look at interesting places. i like investment rates still. i don't like getting over my skis on ricks. yes, we like high yield but very actively, specifically picked. we like mu ni bonds and think

it's a good area to be and especially in the fiscal environment we're in, bethink municipals are valuable. jack: you're an esteemed member of the barron round table and high yield -- no, municipal bond fund was one of your picks. unfortunately we have to leave it there. i do want to say you have interesting thoughts on how the chinese will in fact not replace the dollar as the reserve currency. we'll have you back onto talk about that. sonal, great to see you again and thank you for coming on the show. artificial intelligence is reshaping the tech landscape but not easy to invest in ai. we'll tell you how to play it next. i got into debt in college, and no matter how much i paid, it followed me everywhere.

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jack: artificial intelligence suddenly dominating headlines over the past few months and investors who own the right stocks are benefiting big time. where does it go from here? it's part of a barron's special quarterly section, the guide to wealth. ben, we tack al whole bunch of friends in the story but start with one that's getting all the oxygen and 39 years after the term nay torr hit screen screend we're talk about ai. >> ai has gone from a pipe dream to a reality. we saw with chatgpt and there's a consumer opportunity here and we can sell stuff through this and real game changer is when nvidia came out with the earnings and the numbers were fantast and i can better than the earnings was the guidance, which was 50% higher than they had previously said and that was because people are ordering chips to be able to do ai, which takes a lot of memory to co. so all of a sudden everything that had anything to do with ai is rallying. you have chip makers are doing

it, data base companies, c3ai has the ticker. ai was flyin flying and that's e it just got everybody super excited because this is real now. jack: one quick thing with nvidia, seems to be priced for perfection. investors that own it, should they take profits at this point? >> i don't think you take profits at this point. stocks hit a million in profit value and pulls back. it's the one company that seems to be make ago lot of money off this right now. it's a stock to hold. there's analysts out there telling people to hit the brakes on this, it'll take time to go from big hyper scalers that are buying for their cloud businesses and whatnot. for nvidia, the future is now. jack: think amazon is a slightly more smart law because it's cheaper? >> it's not cheaper but it hasn't gained as much and there's concern that it's a cloud business and a good chance that ai help withs the cloud business and will drive more

business to them and should help in the long run. jack: got it, carlton, another trend we call out in the story is india. as we know it's now the largest population in the world. it's a very fast growing economy. i looked it up right before the show. ten years ago if you invested in the u.s. market, you more than, i think you more than tripled your money over the past ten years. you invest in france, you more than double your money with the french index of stocks. india not quite. turn $10 grand into 18 gap. 18 grand. why is now suddenly the time? >> yeah, wall street gets overly excited about things and wall street loves acronyms and looking at bricks, brazil, india, china. they did not pan out and to your point looking at worship god's largest population and that's 1 -- world's largest population, 1.4 billion and about 40% of them are under the age of 25 so it's a country that's not going to have sewage social services

cost for aging population. that bodes well for it and india has been in a year's long effort to have a national identity program for it is population. years ago you'd look at india and a third of the population didn't have a birth certificate and 60% didn't have bank accounts and now people are starting to access financial services and infrastructures and transportation improve and broad band internet access improve, and in a more affordable way so this is going to be a growing economy. i'm not saying that this is going to knot knock it out of the moon or anything like that because wall street gets too excited but you don't want to ignore this population. jack: interest that you think banks is a opportunity in india. >> absolutely. with the national identity program, there's more people that have been blocked from accessing financial services suddenly being able to. you want to look at something like the hdfc bank for maybe a single stock investment or if you just want greater expose uroto the region, do the etf,

inda. jack: one more for you, andrew, the energy transition. not always easy to play though. evs can get very expensive, how are you looking at it? >> might take a more conservative approach and buy electric utility stock stocks aa big buildout of wind and solar power generation in the next decade and transmission lines and play through electric utility stocks and companies like du power, american electric power, 4% dividend yields and the utility etf and have dividend and earnings growth in the mid single digits in the current decade. jack: bio-tech changing the world and all sorts of wonderful things happening and really stricky for investors. >> one company is the therapeutics developing a jean therapy and a cure -- gene therapy for a muscular dystrophy that is a killer and affects boys and is a real game changer. jack: you've been covering that for year years and kudos to you.

carelton, the water issue around lake mead. >> yeah, and the agricultural and semiconductors use a lot of water and invest in an etf dealing with issues of water conservation and purification and water investment etf. jack: we covered a lot of stuff. thankers for that. you have even more investment ideas and those are coming up. andrew says ceos are raking in the big bucks based on esg performance. we'll explain when w what do we always say, son? liberty mutual customizes your car insurance... so you only pay for what you need. that's my boy. ♪ stay off the freeways! only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪ [ applause ] the day you get your clearchoice dental implants changes your struggle with missing teeth forever. it changes how you eat,

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jack: andrew, ceos and good buddies on the board-over directors found another way to

boost pay. >> the woke agenda continues to infect corporate america with esg pollty it is and they're paid well and looking to boost pay by paying them based on certain goals like the head of chipotle got paid for using more sustainable produce and diversity goals and head of starbucks got paid for getting rid of plastic straws in the stores and we're see ago lot of that going on right now. ceos pad their pay with the help of directors. jack: good for the environment and a lot say he should have got a pay cut. time for actionable ideas. carleton, starting with you. >> i'm with you on the paper straws and looking at defensive sectors of the economy and normally intensive downturn and consumer staples and utilities. if you lock at how the market has performed this year, they were all laggerred and also facing inflation and yields

aren't that enticing and new way to play defense is actually tech believe it or not. when you look at stocks performing so far and definitely a ton of outperformance and not about the high growth stocks necessarily. it's about looking at tech companies, particularly in the enterprise software space and predictable revenues, businesses are still going to have to pay for cybersecurity and software and things like that. it actually could be a good spot to hide out and for that look at something like the invescoqqq trust. jack: ja margins just as hot and going with the high valuations. again, what's your pick? >> all tech cisco systems and not seen as ai play and it's only up 5% this year and less than s&p 500 but may be a larger ai opportunity there, particularly building out the infrastructure that's going to be needed for that. and the stock has been rallying just a little bit.

it's dirt cheap and about 12.5 times earnings, which is well below the s&p 500. it looks pretty interesting here. jack: cisco is the darling in 1999 and still $30 below where it was at its peak in 2000s. >> if you've held your stock, still haven't gotten your money back. jack: ben, karleton, andrew, great ideas and read more at barron's.com and on twitter twitter@barronsonline. see you next week on barron's round table. ♪ and i said nothing. >> have a great week. maria: happy weekend to all. welcome to the