jackie: one thing you need to know ahead of next week stamp prices are on the rise for a second time this year starting sunday it will cost 66 cents for one first class forever stamp. the post office blaming the hike on a surgeon operating expenses field by inflation. january of this year the price climbed from 60 to 63 cents and when biden took office in january of 2021 the price of one forever stamp was just 55 cents. go out, buy some stamps before sunday. that will do it for us, think of for watching and have a great weekend. >> "barron's roundtable" sponsored by global x etf ♪ ♪

>> welcome to "barron's roundtable" where we get behind the headlines and repair you for the week ahead i am jack otter. coming up we have good news and bad news inflation may come down faster than feared that a recession is still in the forecast, global market strategist brian levitt will share his outlook. you can teach an old store new tricks, how walmart is using innovative technology to reasons game. later what men's underwear sales can tell us about the future of the economy. but we began as always with three things investors to be thinking about right now. hiring slowed in june but wages rose leading investors to sell stocks that the fed will hike interest rates with earnings seasons around the corner we have three sectors to keep an eye on then the sucker bird versus elon musk battle continues, medicine twitter killer threads making the big debut, get the new platform

dethrone twitter? on the barron roundtable kristen beltran, carleton english and jacob sonnenschein. carlton for a while i thought we returned to an era where good news was good news but it was not to be made a really strong adp report on thursday and the market tanks, on friday the number not quite as strong but still enough to convince investors that it will keep i and stocks did not have a good week. >> that's exactly it. wednesday we saw nearly 500,000 jobs added to the economy. definitely led to fears that not only the fed is going to hike in july it's almost certain at this point in the likelihood of a fat hike in september potentially afterwards is increasing, friday and were no report from the labor department that showed a little more than 200,000 jobs added to the economy and that came in below most estimates and slightly below but we see things like wage increases and we all love it and having more money in our pockets but that is

inflationary wage growth not as high as it was this last year but still looking pretty high. again signs that the fed still has its work ahead of it. >> switching over to the bond market that was interesting you saw the two-year jump above five and it did come back but the tenure above for that seems a good durable move that could be a signal that the economy will be strong, what do you think. >> that seems to be at, all of the jitters are the near-term what is the fed going to be doing and that's what we see on the moves on the two-year and the yields did come down after we got friday's. but more of looking out, there is a little bit more durability in the economy when we look a few years out. >> in the coming week the cpi report that is more important. >> absolutely, the fed is looking every bit of data to try to figure out what they're going to do with rates at the end of this month, it is going to be hike, cpi is expected to be a 3.1% gain in prices, much lower

that it was this time last year but we are still well above historic levels in the fed not only wants to get to the 2% target and have it stay there they need to have faith it's going to stay there, moving to the right direction just not fast enough. >> they want to convince the markets that they will do whatever it takes. jacob, a durable recovery that can bode well for some of the less sexy sectors. you been taking a look energy, materials and thanks. let's start with materials, doctor copper is a predictor of a better economy. >> i look at materials especially freeport. >> marianne coming off of their low, it is a tough time in the market but when i look at freeport, other materials as well they are still trading at a pe multiple that isn't too rich in freeport is comfortably below the s&p 50019 times. a lot of times when freeport were copper minors are in favor with investors they can trade in

line with s&p and sometimes trade a little bit higher than the s&p, what's going to get them going as you look at the earnings report coming in. the price of copper could move higher as central banks especially the fed stops hiking rates like carleton was saying in the economy stabilizes that is good for copper in the price of copper and longtime electric vehicle demand. a lot of tailwinds and some of the tailwinds can show up at commentary looking forward and like a freeport. >> might have a lot more room to run and energy a similar situation wa chevron and banks e a similar situation with citigroup. >> chevron is closely tied to the price of oil. >> 100%. thank you very much kristen let's talk about the fun stuff, zuckerberg versus musk. a lot of missteps by elon musk on twitter. i'm not sure threads was ready for prime time but meda says we have to launch now.

>> zuckerberg came out swinging with the launch. it was actually threads downloaded in the 24 hours by 30 million people that is a record. it is up to 70 million now. elon musk does not like this, he is accused meta of stealing trade secrets, this is something that meta definitely has denied but the back-and-forth is on. jack: no question about it when we look at threads we should explain for those who have not seen it looks like twitter. ask differently but visually. >> it is a twitter clone and no one is denying that. i think zuckerberg has big aspirations potentially he said if we can get a billion people on this app we can really monetize this. that would be almost three times as many people on twitter so i think the bar is extremely high, right now it's very basic, there are no ads, you cannot search, this is an app that needs a lot of development. they've got people on their the

question will they stay and will they get addicted. >> will they become part of the conversation that is not easy to do. my next guest says were in the clear when it comes to hitting a recession this year but we might not be so lucky in 2024. invested brian levitt tell your best defense against erosion and cavities is strong enamel- nothing beats it. new pronamel active shield actively shields the enamel to defend against erosion and cavities. i think that this product is a gamechanger for my patients- it really works.

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>> let's start with inflation on everyone's mind. of course you say it is slowly but the market says it is not slowing an offer jay powell's. >> is not to jay powell's liking but we are getting there. we were to get the consumer price index report everyone has been waiting when is getting into the low threes and high twos and if we climb this month what we've been climbing on average this year you will be on the low threes. that is good news, core remains too high but a lot of that is shelter. if you look at other indicators such as the home price index or what's going on in the rental market they are coming down. cpi shelter usually lags by ten months, 12 months. you will see that come down as well. we are getting close, the bond market is telling you at least in the breakeven's, we are getting closer to the end of the tightening cycle. >> that is the good news, the bad news while we will escape recession in the near-term it is

a business cycle so you do see a recession eventually. >> all business cycles and they don't have to be as catastrophic as of last two recessions 2020 and 0 eight. when the recency bias that they're all disastrous and policymakers need to comment was substantial support. we had recessions like in 1991 were that was not the case. this is playing out similarly to 1981. inflation peaked in the march of 80 fed raised rates through the end of the year. united telegraphed recession but the market had already priced a lot of it and you started to see the early stages of a new market cycle that became a nice bull market. we still need to see the lagged effects of all the policy tightening. it's a lot in a short period of time in the economy will continue to slow but for investors i think we price the already. >> speaking about what is the investor playbook if it's priced

in, there is nothing to buy because it' it's all fully pric. >> over the next year or two investor should think well of risk assets. if you look the year or two after inflation has peaked the market does quite well worded one year the market is up 70% that's pretty close to average after the year inflation peaked in the two years after they tend to do quite well in the year after policy tightening market does quite well i think investors will do well the challenge which part of the market do you want to be and we're bouncing between the markets thinking soft landing versus the market thinking too much tightening. when you are in that you want to be a little bit more defensive, it is a mega- cap growth names when the market thinks soft landing it is more of a small value and non- u.s. dollar so you may bounce between the recovery and a wave we have to contract a little bit a few times over the next month. if you are thinking over the next year or two it's going to be a new market cycle and you want to be in smaller cap, risk

credit, more value oriented and more exposed to the non- u.s. dollar. >> is painful to buy all of those international, small caps, value had done pretty badly over the past decade but you have to realize when they have been badly for a long time is the time to buy. >> or more reasonably priced but you're essentially saying you need a catalyst for them to do well and we never had the catalyst in the last cycle because anytime they started to get going the fed would raise rates were we would start a trade war and something would slow down global growth, the catalyst is usually improving global growth and that typically is what happens when you come into the next cycle you get the improvement that does not mean value and small will perform for the next decade. it means in the early stages of a new market cycle in the year or two after inflation has peaked you tend to do well in those parts of the market.

it does not mean that we plow out of the growth if you think about a balanced portfolio where do you tilt and recovery small non- u.s. dollar those types of things. jack: we have to go in 20 seconds but a good reminder for investors, you said don't jump out of the market every time you get scared. don't jump out of the market every time you get scared we've seen far too many times recently whether covid or concern about fed rate hikes or russia ukraine, people got out of the market it's almost always, it is always a fools error to try to time these things. jack: think of her coming on the show we appreciate it. next a surprisingly tech savvy company that is back on the cutting edge of retail. more when we

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>> automation is reshaping the retail industry and after years of missteps walmart is emerging as a trailblazer, the retail giant finally adopting to the latest tech invariance is calling the stock up by it is a barron's cover story. kristen you edited the story walmart has long been a lag or and were wondering when are they going to catch up to the new kid on the block amazon. why did it take them so long? they were late, they started late and it took them a long time to recognize what a big deal e-commerce was going to be in a threat that amazon would pose and once they figured out we need to get online, they started making acquisitions or buying digitally native brand spending a lot of money on them and mostly they did not workout people might remember they spent $3 billion on jet.com that was something the winding down after four years. it's been a struggle and we

think they have been tested and experimenting in the pieces in place to make the turnaround. >> give us examples of the new walmart. >> the new walmart is tech across the organization. you are seeing it and experimenting with cutting-edge tech they have a drone delivery program something they're doing in seven states, get your walmart delivery and 30 minutes, you see and the company they have a new cfo someone that they hired from paypal, he is bringing definitely technology background in epic most importantly you are seeing in the core business i revamped website they have a third-party marketplace that turned into a digital ad powerhouse and they are using automation, robotics, a.i. and their warehouse in this is added up, we see the u.s. e-commerce double since 2019 and that's outpacing the rest of the business. >> i hear everything that you're talking about and i think how people thought about walmart ten or 20 years ago you think about. brick-and-mortar everything that

you're talking about sounds very tech oriented and something coming out of seattle or silicon valley. what is going on of the culture at walmart internally and will be here like automation and robotics. >> walmart has a culture of let's test it and if we mess it up the first time let's see if we can figure out how to fix it, you saw this with grocery that something when they got in to grocery and it's really hard business and if we put grocery on the superstores we can get people committed regularly and buying groceries and other stuff and something to rollout now groceries 60% of their business. we saw some of this innovation on the ground in the survey reported this for barron's and she went to see the headquarters of walmart in bentonville and she went onto the dance floor which is where the robots operate they are zooming around and fulfilling orders and picking products off-the-shelf and delivering them to people to fulfill the order.

this is really about streamlining the business and doing things were quickly. and ultimately this is going to shave 20% off the engineer fulfillment cost and that increases the profit margin and great for investors. >> if that is the case, if amazon is bigger than walmart what makes walmart not just something that can be decent were a real winner. >> walmart is the biggest retailer by revenue right now, amazon might pass them at any second. i would encourage people not to get hung up which is bigger by revenue, the case for walmart is three things, they really focus on profitability. this is been a problem but we think they're about to turn around and in 2025 the going to hit record earnings-per-share mask when you continue upwards it is about their stores, the huge store network and they can use those to fulfill orders, distributions and come in and pick up things that they ordered

online no one can match the stored network and walmart has always been about bull prices, that is resonated with people right now especially with inflation in a shaky economy and is bringing a new higher revenue customers, walmart thinks they have the technology to keep those people even when the economy turns around. >> walmart has a 90% america within 10 miles of walmart. amazon could only wish for them with his warehouses. >> that is part of what amazon was trying to do to get whole foods and get the store network. now walmart is trying to take away some of the business. jack: you have a pair of stock ♪ limu emu & doug ♪ what do we always say, son? liberty mutual customizes your car insurance... so you only pay for what you need. that's my boy. now you get out there, and you make us proud, huh? ♪

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jack: carleton jacob and i was talking about doctor copper in indicator but you been looking into lesser-known ones including men's underwear, tell us about that. >> understandably everyone is trying to make sense of what's going on with the economy, gdp data lags so our reporter looked at nonconventional things out there. yes men's underwear sales specifically can be an economic indicator. this is courtesy of former fed chair alan greenspan who found during times of recession or near a recession tales of men underwear go down. i'm not asking anyone to volunteer information but not many people see them you could replace the suit, the jacket, the underwear. >> i'm not asking for information but yes.

>> that is not the only one we looked at, tell us about some others. >> another one is champagne sales, during times of recession most people will not be popping champagne we saw that during the financial crisis. right now seals are holding up alright there were 34 million bottles imported in 2021, it take down a little bit in 2022 to 30.71 million to definitely watch and another one dining out this is very obvious you're not spending money to go to restaurants during a recessionary time. coming down to the peaks of 2021, the index of restaurants is still above 100 which suggest expansion, one thing i would note, grocery bills are also expensive and that means cooking and cleaning. there may be households that say it might be worth it to go to a restaurant rather than have a high grocery bill and make it myself. >> time to go to actionable ideas, jacob let's go to you.

>> trading at eight times forward earnings. >> that's exciting. >> it is because of the potential returns you can get. it is beaten-down, let's take care of the risk real quick, sales are declining because as bafflement myeloma treatment which is in decline and the patent is expiring and losing market share if it doesn't develop a pipeline the stock will keep falling but it has a pretty good idea of what it wants to do going forward. has a pipeline that could be collectively $30 billion in sales and eight times earnings. if the hits on a pipeline and hits the sales you're talking about a stock quickly go to 60 to 100. >> it sounds pretty good. >> it is summer and everybody wants to be on vacation, we just had the fourth of july travel numbers a broken record so the idea that travel is cooling-off is not happening. we talked about delta but i also like united and this is an airline with a lot of exposure to international routes and

analysts think the stock will and clan by 9%. jack: every seat seems to be full every time i fly. that is good for the airlines not so great for us. kristen, carleton, jacob, great ideas. i would say this friday july 7 marks 100 days since wall street journal reporter evan gursky which was wrongfully detained in russia, we hope you will support evans release on social media use the # i stand with evan, those of the buttons you see carleton and i wearing every week. that is all for us we will see you next week on "barron's roundtable". ♪ mama has her thumbnails out. >> michael and brett thank you so much. >> from the fox studios in new york city. this is "maria bartiromo wall street". >> welcome to the program that analyzes the week that was in helps positioning for the week