devastated attacks in israel, the band is releasing the 26 studio album it is called hackney diamonds and future songs of elton john, lady gaga, paul mccartney and many others, the album is set for release next friday. i will see you this sunday morning at 10:00 a.m. eastern on the fox news channel for "sunday morning futures" i'll be joined by secretary of state mike pompeo and exclusive interviews with house foreign affairs committee michael mccaul, iranian crown prince in arizona candidate kari lake join us with full live development from the war on israel. that will do it for us for now. thank you so much for watching ♪ ♪ ♪ >> welcome to "barron's

roundtable" where we get behind the headlines and prepare you for the week ahead. i'm carlson english emperor jack otter. coming up israel is striking back against hamas as war rages in the middle east and the ripple effect to the global economy, top strategist ed yardeni will take a look at the applications and explain the impact on energy prices. then the u.s. is on the road to chip independence but it comes with higher cost that could be passed on to the consumer. later if you have $100,000 lying around we have tips on where to invest. we began as always with three things investors ought to be thinking about right now. stocks ended the week mixed with a war in the middle east in a slightly hotter than expected inflation report, then three big banks leading expectation for the third quarter, now the spotlight is on bank of america the big losses on bonds, finally if you receive social security payments, yo you can expect a

slight raise but nowhere close to the boost and lagging behind inflation. on the "barron's roundtable" al root, elizabeth all o'brien and andrew bary. break down the week in the markets for us, a lot of volatility but it ended a little bit mixed. >> big action of the market this week was oil and we talked about the conflict at the top and oil was up 6%. other than that the indexes were mixed, s&p, the nasdaq, a little bit of a loss, the markets were up early in the week and then later in the week you saw that inflation reading was a little hotter but okay, the yields ended down, overall the narrative that the fed is almost done raising rates and markets and try to figure out what the economy is like and 24 is still the theme invalid and we had the volatility in energy markets.

carleton: i'm also curious and defense stocks, huge jump but kind of flat for the rest of the week. >> action energy market is a story from a stock was defense. the major defense contractors on average of about 11%, northrop grumman up 16% that's the best week since 2009. that is the sort of thing that happened a defense, basically wall street was trying to use the unfortunate reality that conflict is good for the stocks. nobody came out and said this is a material bump to earnings or revenue or things like that. they basically used it to say the world is a couple kid in place and getting more complicated and they used it to basically reiterate their basic ideas, wall street's favorite defense stock is general dynamics. carleton: looking ahead to next week, more earnings on top what are you looking at. >> week ahead earnings, earnings, earnings, lockheed martin, goldman sachs, tesla,

at&t, if you look at the estimates of all these companies for of the five are falling year-over-year this idea of the economy a little teetering, talk about tesla one of my favorites. it is supposed to do 75 cents in earnings, that is not really the key number, key numbers automotive gross profit margins, they've abandoned an old goal of 20% look at automotive gross profit anything about 18% is good. carleton: andrew, friday morning i know you and i were up going over bank earnings, what were the highlights from j.p. morgan and others. >> their worst if you got around 25% whole host of problems. some investments using the dreaded word on investable to describe the sector in the helping earnings this week as we could improve things and we got that. all three banks, wells fargo, j.p. morgan and citi estimates into of the stocks that j.p. morgan and wells fargo were

higher. i would highlight j.p. morgan which under jamie dimon has been the best run big bank in the country and he will be around for maybe a couple more years as ceo. he 67 and investors are very happy about that. carleton: i want to touch base on a bank that we will report next week, bank of america. it has something in common with silicon valley bank, what is going on and what will you be looking at when he reports tuesday. >> bank of america and the other big banks invested heavily in bonds when interest rates were hiat historic lows and other big losses in bond portfolios. bank of america is around 105 billion and it could get worse in the third quarter and were looking at the number in the earnings release coming up on tuesday. carleton: a lot to look for next week. elizabeth we talked about the cpi report that did not necessarily move the market that much but it does have applications for social security, can you break that down for us. >> big new social security announced a cost-of-living increase for next year, retirees

will get 3.2% raise. it will put an extra $57 into retirees reach retain thenth purchasing power and keep up with inflation. here's something to keep in mind medical costs tend to rise at a rate of 1.5 to two times that of cpi. what you see over the course of retirement medical costs in the coal is not keeping up, they have a 65 euro couple today they will be 46% of their social security benefit for medical cost fast-forward 20 years of a 90% of the benefit will be needed for medical costs alone that is a pretty staggering number. carleton: it is a shame that medical your is not accounted into it. the cpi report also has applications for one of the investments two years ago which was i bonds, can you tell us what to expect. >> the september cpi report the new i bond could be the treasury popular protected bond could rise north of 5% from the

current 4.3. carleton: thank you so much. as it israel prepares for the next stages for the war in the middle east investors brace for how it might affect u.s. markets. ed yardeni will tell us what to expect ♪ ♪

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carleton: the intensifying war between israel and hamas is raising concerns about the risk it poses to the global economy. a broader conflict could disrupt supply chains raising the price of oil and were sitting inflation here and in the u.s., joining me to discuss the geopolitical fallout from the war is ed yardeni research president. thank you for joining us.

>> thank you carleton. taking a look at the market there has not been much of a reaction to the work i'm curious to get your thoughts on why that is. >> over the past few years there have been several crises in the middle east between israel and hamas, israel and hezbollah up in the north and those have turned out to be fairly short-lived crises and were contained and managed in such a way that they came up with the cease-fire and life went on even though it could be pretty brutal. as a result of that investors have come to conclude that these flareups in the middle east that don't last very long and don't necessarily have much in the way of global macro economic consequences were much consequences for the u.s., the market may be wrong about that but the fact that we haven't had any sort of correction or

significant selloff in the stock market on fears of a global recession nor on the bond market that oil prices are going to spike up i suggest investors are pretty relaxed about the situation as horrible as it is. carleton: when you talk about the reaction or non- reaction in oil markets i'm just curious if there's anything that you are watching for that could change that. >> at this point i think the market perceives the global supply of oil won't be disrupted very much at all by what's going on between hamas and israel if this spreads and hezbollah gets involved and in return iran interest one way or another i would get very ugly very quickly and the price of oil could certainly spike up. what we saw in the summer, oil prices went up in saudi arabia

announced that they wanted to cut back their production by a million barrels per day and that led to the price of oil going up over $90 a barrel but then something interesting happened the gasoline prices went up in u.s. consumers cut back on filling up their tanks or they did not drive as much. as a result we seen weakness in the price of oil. recently it's been moving with a lot of volatility sideways. i don't think we'll see 100, 120 i think that will be a scenario where there will be a spike in a considerably worst middle east situation. carleton: i want to turn over the bonds. earlier in the week we sell bond yields with a measure of safety, but we also had the week treasury option in the week as well what is your outlook bonds.

>> the bond yield for the tenure is back to where it was before the great financial crisis for an a half to 5% may be the level at which we can get enough investor interest in demand to meet the increased supply, clearly the options are kind of sloppy here but we really did not see the bond yield sore, his sword for a little while but it came back to him for the 30 year. we are still in the foreign half to 5% range. i think we very will be at a level of supply and demand. carleton: curious what does that mean for the fed raising rates. >> it is interesting a few fed officials have expressed the opinion that maybe the bond market has done the heavy lifting for them. i would estimate that the increase in the ten year bond yield about 4% to something like foreign half to 5% recently is equivalent to at least 25 basis point increase in the fed funds

rate probably more like a 50 basis points in the fed funds rate i don't think the fed has to do anymore and i think the fed officials will be persuasive at the next meeting and at the end of october in the beginning of november and i don't expect the fed to be raising the interest rate. carleton: thank you so much ed yardeni. >> you are welcome. the world's biggest semi conductor is using production into the usa could have americans shelling out more of their electronics. more on that next.

the when the push for chip independence in the u.s. is gaining steam most of the world cutting-edge semiconductors are manufactured in taiwan and could leave american businesses

vulnerable at that supply is disrupted with tensions with china. but made in america does not come cheap, taiwan semiconductors a new plant in arizona will cost $40 billion, the barron's cover story this week and barons managing editor joins us on the panel to explain, welcome, good to see you. >> good to see you. in your story you mentioned something called chip security, could you tell us about the big push to get chips produced in america. >> there's no technology more important than semiconductors in the u.s. is really going through a big chip revival to leave semiconductor manufacturing home in the big cause of concern is taiwan for the world semiconductor, advanced semi conductor manufactured by taiwan semiconductors and there is concern about rising political tensions with china if china were to invade or attack the

country that could disrupt supplies for companies and impact national security, what you are seeing right now taiwan is printing out around the world they're building a plant in germany and japan and mainland china and the u.s. and the goal is to reassure customers that their chip supplies are secure and one of the biggest customers is going to be apple, tim cook said they will buy a lot of chips from arizona. carleton: when you talk about the plans being built throughout the world including the u.s. it seems that the cost of producing chips is going to go well. it might seem this is more politically motivated than economic, can you explain. >> there are definitely political motivations. everybody wants chip security and there's no question that the cost will be higher, taiwan is extremely efficient at producing semiconductors there but there

is money now, 2022 bipartisan chips act gold out more than $39 billion in subsidies for chip manufacturing and there's also tax breaks but it will be costlier, industry consultant handle jones estimates 30% premium arizona versus taiwan. >> karen, i am curious for the higher production filter down to the consumer will i spend more for my next iphone. >> you might spend more for your next iphone but it might not be because of the chips, they might absorb some of these costs, they could pass them along to their customers like apple and apple is not going to buy the court process from arizona in the ghetto by that from taiwan with the most advanced semiconductor manufacturing is going to take place, they will probably buy chips for power management, air tags, earbuds and also by possibly chips for 5g modems that they're working on right now they want to cut their alliance on qualcomm in arizona

could produce those. >> taiwan semi may spend $100 billion in the next couple of years on capital expenditures. it's a huge amount of money what does wall street think about this to investments think this is money well spent. >> in general is having an impact on near-term cash flows they get to take a hit and so will the profits for the company that is a huge amount of money but if they believe in the long-term tech trends going to the industry, things like a.i., self driving cars, all kinds of advanced manufacturing that needs chips, there is going to be a huge long runway of growth for this company. most of wall street does rated a buy, the stock is up 20% this year, one big investor warren buffett did sell his shares in taiwan semi's this year, not because he thought it's a bad company or bad business model

that he expressed concern about the location of the geopolitical implications of possible disruptions coming from china. >> the taiwan semi could be a buy but that will be sales for somebody else, where should we look as the boom in american manufacturing happens. it's definitely a boom for the construction industry and you have stocks like sterling infrastructure and vocal materials that are up nicely this year, they could be beneficiaries, i also benefit the pics and shovel plays in the semiconductor industry, this would be the tooling and equipment companies that provide all the gear to semiconductors, that would be kla-tencor, lam research, aes ml and applied materials. >> when i hear about a plant being built in arizona chip production rely on water will be talk about the broader implications of this can you tell us what to expect, is there

going to be more infrastructure needed in arizona, what are the costs there. >> it seems crazy to build water thirsty plants to make semiconductors in the desert and there are water shortages and water supply concerns in arizona, the taiwan semi said they will build an industrial plant on site and recycle 65% of their water and pretty water hungry and they consume millions of gallons of water every month and it's not just taiwan semi other tech companies going to manufacture this is going to bring more housing and more water demands on estate that is running short on water. carleton: thank you so much, do you guys have stock picks and $100,000 burning a hole in your pocket andrew has ideas on what to do with trelegy for copd. ♪ birds flyin' high, you know how i feel. ♪

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carleton: andrew, barron's has a guide out to wealth out this week. let's pretend i'm a generous person and a wealthy person and about to give you $100,000. what should you do with it? >> here are ideas come americans are done with covid and investors are done with covid vaccine makers, that can provide an opportunity for the covid manufacturers which is motor night and biontech, they are down sharply this year but they look pretty appealing, they have a lot of cash, biontech has 75% of the market and investment in both in the pretty good pipeline right now. carleton: any other stocks you would be looking at. >> ibm people left for dead it's

been rejuvenated under a new ceo in an a.i. play and dividend play at 5% and a valuation for 5 times earnings. carleton: costco is the best retail in the country, rock-bottom prices, customers love it, renewal rates about 90% for the 70 million members and at a time when shoplifting is the industry that the best experience. carleton: can't argue with that. why isn't tesla on your list. >> it's expensive 100 times earnings, if you will play electric boom it makes electrical components and other gear for the electric of the world. carleton: i don't have $100,000 but those are great ideas. turning to you guys i know you have great ideas, i will start with you al, part of that we talked with oakmark funds, he thinks a stock like conocophillips offers investors extra protection for inflation. he thinks almost like a bond, if oil is $80, conocophillips will

return 130% of its market cap to you by 2030 while growing his business by 50%. carleton: elizabeth what you looking at. >> i am looking at one of the largest investment run property casualty insurers as a record in all different markets. it is trading at ten times next year's earnings which is cheaper than the broad market. carleton: alright, great ideas, thank you. to read more, check out this week's edition of barron's.com, don't forget to follow was on x formally known as twitter at barron's online. see you next week on "barron's roundtable". ♪ larry: welcome to code low -- code low. i'm larry kudlow. president biden spoke this