costing companies and house judiciary subcommittee will be beating next tuesday to discuss rising retail theft and the threat to public safety, according to the national retail federation store theft cost companies $100 billion last year it is all in inventory shrinka shrinkage. we will be following this on buddies with maria six to 9:00 a.m. eastern weekdays on fox business. i will see you on fox news channel sunday 10:00 a.m. eastern sunday morning on the fox news channel for "sunday morning futures" a box lose of interviews with ron johnson, former national intelligence director john ratcliffe, 2024 democrat presidential candidate marianne williamson all with me sunday join us live. that'll do i business. thank you for being with me. have a great rest of the weekend. i will see you next time. >> "barron's roundtable" sponsored by global act cts ♪

♪ >> welcome to "barron's roundtable" where we get behind the headlines and prepare you for the week ahead. i'm jack carter. coming up to inflation data and the fed rate decision has investors looking ahead to next week. i'll ask j.p. morgan strategist david kelly what he's watching, then the s&p 500 entering bull market territory thanks mostly to a big tech stock, can the rally last? later the biden academy versus the trump academy. we will show you the numbers. we begin with three things investors ought to be thinking about right now, the markets closing out the week higher and is a game over for gamestop in the mean trade, canadian wall wildfires causing a blake of smoke over the u.s. this week will take a look at the stocks that rallied in the aftermath. a new defect for boeing is causing the slowdown on his deliveries of the 787 dreamliner but airline stocks are continuing to soar as summer

travel surges. on the barron "barron's roundtan levisohn carleton english and. it may not feel like it but it's official were a noble market how did that happen. >> we entered a bull market this week and we did in the most temperate way possible. the s&p 500 gained 0.4% in the other indexes did not go up that much at all. it was a small-cap russell 202,000 again was 2%. that is a sign there is a rotation going on underneath the service and people are willing to buy more than apple in the big tech. >> it shows you people that are concerned about market rest were wrong they said it was narrow only seven or eight stocks and basically driving the market higher rate it turned out the market is going down broadened out in small and mid-cap are doing really well. >> you sound like a sensible market to me. >> to some people to look at this and say recession fears and whatnot why is the market going up but on one level it's more sensible gamestop reported

earnings in the fire to ceo and the stock dropped 8% and the canceled earnings call, the stock is down to 23 split adjusted it was up almost 87. the mean stock trade has faded away and instead you're having people treating it like a regular company. you buy stocks because you like the outlook for that company. that's an amazing change. what are we looking at next week. >> were looking at the fed it is supposed to take a pause that's what the market is betting. i'm worried will have cell of the news reaction especially if the fed decides is a hawkish pause where they will pause and hike again but if they decide to hike one more time in then say were done maybe it goes up. >> meanwhile unconsider concernt your health karl your voice sounds scratchy. >> after this week i could do a

may west impersonation and a lot of people in the northeast corridor felt the same thing because of the effect of the wildfires that are going to canada earlier this begin new york we saw the orange sky cloud and i know you were walking through the bit to. what scary. we see this very early in the traditional summer while fire season and to get it from canada and new york city and the northeast quarter to feel the effects. is not just that the effect of the bad air would new york city at one point this week having worst air quality work in more traditional areas in the world. it's also the market and economic effect of what the look at the commodity in the price of lumber when it 7% over the last week. then you see companies like whirlpool for households and commercial real estate alike were also seen a surge because people are paying attention to the effects of the wildfires. i was an office building where i

got to the elevator and a small like a campfire. in new york city where the fires were pelaton how to brief pot because they thought we would be exercising indoors again pretty see a lot of stocks had the impact long-term impacts in the insurance market. >> even ahead in northeast quarter yet a lot of insurance companies planning not to issue new policies for california which is been prone to wildfires because of the risks there. jack: let's switch to aerospace for boeing. it seems to go on and on the dreamliner is a nightmare. >> another one of the series and manufacturing problems for boeing investors don't care that much. this is happened before for

boeing to stop it's been strong and it hit a near high for the year in the reason the investors are looking out to 2025 and 2026. they figured manufacturing problems are good to be fixed this is boeing and airbus to nobodies going to challenge for another decade or two so basically they feel the profitability will return to boeing. jack: i hate to say it but it looks like airbus is well ahead. >> this is what they consider airbus lesser of a european consortium and a better balance sheet and narrowbody play and maybe a better value than boei boeing. >> let's switch over to the big clients for the company's. airline is doing very well i've been on a plane with an empty seat for a long time. >> planes are close to being full and delta can be a big beneficiary it's one of the best managed of the big airlines the stock was week early because of recession fears but those arch trading seven times earnings look for resumption of the delta dividend this summer. >> delta does run a tight ship. an interesting stat across the

barron's wire airline pilots at the top end are making $700,000 a year. >> it is a big number that may be on the high-end and issue costs are rising for fuel an issue in labor but there offsetting with prices. >> i do want the guy at the helm to be well-paid i feel better investors have their eye on next week's inflation data in every decision from the fed. i'll ask j.p. morgan strategist what to expect next. he snores like an angry rhino.

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and i remember kind of thinking like, "oh my gosh, i think we could be sisters." because i think we looked... yes. right. yeah. and i don't think at that time- i think you're the one to tell me that we had the same birthday. yes. it's really unbelievable when you think about it, because it's been, like, really over 20 years that you were my mother and father's banker, you became my banker and now fran is in her third year of college and you're her banker. it's so unbelievable because i'm just 20 years old. [laughing] jack: a big week ahead for the markets and money investors looking at highly anticipated federal reserve into major

inflation reports, joining me ap morgan asset management chief global strategist david kelly. thank you for coming on the show. >> sure, glad to be here. >> for years including on the show use of the fed was keeping rates too low for too long it's clear you were correct if jay powell and his colleagues are listening would you tell them to stop at this point? >> definitely there are like the monetary policy we know there are lags in what we see in the economy slow motion slowdown but we see a lot of momentum leaving the economy as this year goes on and inflation is coming down. frankly they should not of pushed rates as high as they've done but they should stop now. jack: you think were on the way to the 2%, 70 people in the grocery store say inflation is out of control you think the data suggest will get back to 2% soon. >> yes getting inflation down is not an overnight kind of thing

it's like sending a slinky down the stairs it takes a little time to come down. as were tracking it a year ago in june of 2228.9% year-over-year in april of this year 5%, next week were you to be at 4.2% year-over-year when we get the june date in july will be at 3.4% were making a lot of progress and it's all the way to the end of 2024 to get down to 224%. there's nothing wrong with inflation coming down 3% to 2% that is fine not worth every. jack: got it, direction is the most more important than actual numbers i think it's clear what do you think the fed should do, what do you think the fed will actually do. >> i think they can be very sophisticated pretty think what they will do they say were skipping a beat he now were

knocking to raise rates but don't take that as a meeting on hold were not on hold were skipping as we may come back in july and raise rates they'll send that message saying they could raise rates again. ultimately i don't think they will think there's enough coolness coming on inflation and growth they will leave it at this but i don't think that's what we get here this week. i think what they will say they could raise rates again in july which i wish they would not say it but i think that's what they will say. >> jay powell does not want to be arthur burns. i would ask you about the job market you done a lot of work and clearly jay powell is watching carefully and the headline numbers look strong but going below the data you see evidence of what the fed is doing is having an impact. >> we see evidence there's not much inflation pressure coming from the labor market. that's the most important thing. if the labor market is tight and not enough workers that is quite clear we've had 25 straight months in which wages have gone

up by less than cpi inflation what that tells me regardless of how tight the labor market workers don't have that much bargaining power the not able for compensation for the inflation that occurred. if enough we have a tight labor market i don't think that means huge wage gains if we don't have huge wage gains inflation will be able to come down. it's tight but not an inflationary labor market. >> audit, let's put this together for investors. what is j.p. morgan asset management think investor should do it with outlook and economic data you are crunching. >> i think what they should do first of all look past the federal reserve and the threat of recession. we may have a recession going into next year but if we do it'll be mild. the real point when we, on 2024 and 2025 is good to be slow growth, lower interest rate economy. the fat fed will have to cut next year when you get back to the low economy that's good for financial assets it would be a

longer duration on bonds i think it's okay for long-term bonds in overweight equities i'd be particularly overweight international equities because i think the dollar will come down in this environment. >> most people are under owned international which seem to be cheaper as well. >> absolutely you can buy a dollar of future earnings overseas at a 30% discount to the united states and you can get twice the dividend, international has done poorly for a long time partly because the dollar has gone up but the dollar is too high we think this configuration of the global economy should push the dollar down it if it does i think that means good returns on international investments. >> thank you for coming on the show and sharing insights i appreciated. >> anytime ♪ limu emu & doug ♪ what do we always say, son? liberty mutual customizes your car insurance...

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jack: after nearly a year the s&p 500 finally into readable market despite persistent inflation, rising interest-rate recession fears. how did we get here and get the market rally be sustained the barron's cover story this week. then, i guess that's why they call it a wall of worry. >> entered this year end everyone was terrified, terrified of a recession, frightened of the banking turmoil of the debt ceiling and if the market has gone to a bull market in this because the big tech stocks which benefited that they became defensive plays, they make a lot of money and when you're worried about stuff that's where you want to go and they benefited from a i a big theme everyone's looking to big tech saying they will get a lot of money off of this so you end up investor seeing that and they buy the stocks there so big they push it up without anything at

all. >> you need artificial intelligence will be have andrew bary who on the show in january addicted tech stocks would do really well despite everybody's fears. i think we have a clip of that. >> big tech it simple stick with the mega techs apple, amazon, alphabet are good and down 25 or 50% in the last year and the evaluation is getting more attractive. >> well done early still attractive at this point. >> i think alphabet is pretty attractive i'd be cautious on apple is 180 from 20 times earnings to 30 times earnings. i think it's getting rich almost 3 trillion-dollar market value right now and not a lot of growth right now. jack: been do you think this is sustainable with tech evaluation elevated. >> i think it is two ways the market can go up tech stocks can get more expensive and people can buy the medicare is a market higher but you can see the

market rally broaden we see that without performance of small caps this week in the rsp the equal weighted s&p 500 etf which gained 1% which doubled s&p 500. if you keep having the market brought in now and good reasons to do so including stronger earnings you can see the market go higher even as big tech treads water. >> what if people are comfortable paying 30 times earnings stocks that everybody loves where do they look for good values. >> a lot of stuff is on sale when you saw tech marching forward the main was energy and financial. of course we understand what was going on with the financial sector in the banking turmoil that we saw back in march and april and one way to play this to the bank index the kde and a lot of stocks looking undervalued and i think they are oversold from where we were they have headwinds in their looking good. the other thing is energy demand is not going down and these companies are run much better

than they were years ago. >> give a nice dividend on the energy index. >> even on banks here looking at dividends in excess of 4%, not a bad place to be. >> a better deal than if you buy bonds. >> too much good deals. >> throw a wet blanket on it what should be worried about. >> the worries are when we started it's about the economy, the economy is weakening and we see in the job market is not as strong as it used to be. we also see and possible earnings. if you look at morga morgan stay strategist mark wilson saying it's too optimistic analysts are too high and will see a big drop and that could take the market to 3700. then we have the fed everyone expects the pause if the fed decides we don't want to pause there's too much inflation, that could really cause the market to take a breather. >> the important thing to pay attention to the amount of time

in the market, all of these things are headwinds and can take the market lower. do you need the money today or long-term investor. always pay attention to what's going on in the headlines but i don't think of the volatile times want to go all in cash, stay in the market but be mindful of what's going on that's proven to benefit over the longer-term. >> there could be fuel in the $5 trillion money market funds people liking the 5% getting out of their money market funds, the stock market is doing a lot better money market could be headed lower if it uses by the end of this year. >> david kelly mentioned international stocks looking attractive. >> i agree they underperform for ten years, japan is the top major market in the world for 20%. as he pointed out a lower dollar and lower evaluation in high dividend overseas could mean they will outperform in mostly value oriented not a lot of big tech overseas. when you buy international

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jack: history suggest it's awfully early to say who the presidential nominees will be in 2024. right now despite trump's indictments it looks like a rematch so barron's took a look at biden trump record tell us what our reporter found. we have to caveat same presidents have less control over the economy than we tend to attribute to them and covid effects makes this difficult

more than it would be. >> exactly a lot of credit to our economic duo meghan who looked at 11 economic measures during the first 27 months of trump and biden's presidencies. what is interesting trump going into the covid pandemic inviting coming out of it. a lot of the data points can be muddied into your point the fact that the president directly has on the economy is up in the air it's more of a feeling of sentiment and how people feel how they're doing that gets them in the voting booth. the main one that we want to look at and focus on is gdp trump's campaign was to get us about 4%. he only did that in two quarters one was a covid quarter, biden coming out of the covid economy so we had the economy surging after that pretty look at the records trump was averaging two and a half per quarter and biden 3.1% per quarter the other one

the sticky point the one we feel when we shop, inflation. when trump was president the fed had a hard time getting inflation up to 2%, that was the case coming out of the economic crisis in 2008 in 2009. we all know what were doing we saw inflation top 9% last year. as of april 4.3% that is something american households are feeling the most you look at that both sides were big spenders in terms of the covid pandemic response. unemployment numbers were muddied because of the pandemic but both looking at 3.5% unemployment rate. ultimately it comes down to how people feel in the economy, consumer confidence. during the trump years consumers were feeling pretty good, but inflation rate is now consumers are not feeling healthy. >> the big numbers at the gas station tend to depress people. >> let's go to stock picks.

>> simon property group owned a bunch of malls the stock got hit hard with the banking turmoil because people that own malls depend on credit. the stock is bottom in good fundamental reasons and has good malls in these are bigoted a lot of money the stock was interesting with a 6.5% dividend. >> paramount the big media company the stock got hit hard in the last year 50% around 60 near multiyear lows. the good news were looking at cut cost and it could be an acquisition candidate for company like apple or amazon and the valuation is really low historically. jack: a scale on the business. andrew, carlton, ben, thank you very much, to read more checkout barron's.com. follow us on twitter at barron's online. that is all fo >> welcome to kudlow. i'm larry kudlow