microsoft if reporting on tuesday. meta will report on wednesday and amazon on thursday. these may very well set the tone for the whole market. ford and general motors also reporting next week. it'll be a telling look at how the the uaw strike has affected the auto makers' bottom line over a month into the work stoppage. we'll be polling it on "mornings with america -- mornings with maria," weekdays, 6-9 a.m. eastern on fox business. join me for "sunday morning futures" live with interviews with ted cruz, john ratcliffe and attorneys general ken packton from texas and greta that burg from iowa. join us live on sunday. that'll do it for us on fox business. have a great rest of the weekend, and i'll see you again next time. muck. ♪ ♪ ♪

>> welcome to "barron's roundtable" where we get behind the headlines and rare you for the week -- prepare you for the week ahead. i'm carlton english in for jack otter. the war enters week two. global market strategist brian leavitt will look at how escalation fears are impacting stocks and energy prices. then, a big week for big tech is on the way. netflix kicked off earnings this week with a bang on strong subscriber growth, but there's a lot more to come, and is one tech giant faces trouble from china. and later, we'll give investors an inside look on the stealth play for electric vehicle stocks. but we begin, as always, with three things investors ought to be thinking about right now. stocks sank this week as investors are keeping a close watch on growing middle east tension. then elon musk is having some regrets about tesla's highly anticipated cyber truck and the ev maker's third quarter earnings were a big big

disappointment. and a warning for investors about following the smart money when it comes to their investments. on the table, ben levisohn, andrew berry and jacob bonnen shine. so, ben, another cloudy friday, another cloudy weekend and that also played out in the markets. why were markets down again this week? >> well, this week's loss was brought to you by the number 5, that's 5% on the 10- year treasury yield. [laughter] the treasury yield's just been going up and up and up, it makes people just say, hey, i don't even put money into stocks, i can just buy bonds. and if that that has hurt stocks, particularly those that have exposure to yields in different ways. big tech stocks, because they have profits out in the future, those get knocked down, the val weighs. -- valuation. solar edge and enphase, those stocks got smacked partially because they have no profits, they're building out these businesses, and it's getting more expensive to do that. so it was a terrible week for

the market partially because of the middle east overhang, but really it's these yields that keep going up. >> so it seems the fed may be near the end of interest rate hikes. we're kind of getting use9 -- used to the higher for longer. >> i think that's exactly it, all the fed speakers this week sounded dovish. they sounded like rates had gone high enough. powell on thursday ec ecod that, but he also said that, look, these rates need to remain higher, this is more work to be done on inflation, and that really just keeps sending the yields higher and higher. and it's, you know, basically it's going on okay -- to be okay as long as the economy can stand it, but it's up to the economy to show it can keep going with yields this high. >> so what are you going to be looking at next week? we are getting a bit of economic news as well. >> we're getting our first reading on gdp for the third quarter. economists expect it to be around 3.3%. there's something called the atlanta fed gdp now which is a model, and it's showing 4%.

both would be good numbers. problem is they're backward-looking, and we're going to be watching ge, gm, big tech earnings, we want to see what they say not only about this quarter, but what's coming. >> jacob, tesla is one of the more volatile stocks and had a pretty tough report this week. break it down for us. >> down double digits since earnings. and web bush securities' dan ives saying a mini disaster on the quarter. a little over $23 billion in sales for the quarter, up only 8% year-over-year. they missed estimates. one of the big issues was pricing was actually down year we over year, and when elon musk, ceo, was asked about it on the earnings call, he said higher interest rates, weak consumer can. the issue was that investors were kind of saying what east really the issue there. and then you had research and development spend, additional billions of dollars on that reality -- related to the cyber truck. >> tell us us more about the cyber truck, because people weren't excited about it, and it doesn't seem like beat 's --

wall street's excited about it either. >> the tesla was clear about this on the earnings call, ramping up capacity and production is going to take a while, so margins are going to remain hit as they invest in that, and the sales are not going to flow through for a while. >> is there any bull case on tesla? >> absolutely. when musk says higher interest rates, weak consumer, when musk talks about that, well, if all i autos are getting hit by that and tesla's getting hit by it to some degree, then maybe that 8% in a couple years, in a year might be like double digits. and if that's that's the case, tesla's not really getting crushed by competition, and and that is something that the bulls will hang their that hats on. >> gotcha. so, andrew, we have the average investor daily being told to go into alternative investments, but you are actually getting evidence that maybe they shouldn't do that. why? >> well, no group of investors has embraced alternatives more than university endowments. at harvard, for instance, they have about 70% of their

investments in -- [inaudible] and only 10% in regular stocks. returns are mediocre. harvard just reported in june, so did yale, up about 2% versus 20% for the s&p 500. way behind a mix of stocks and bonds as well. >> it seems when you're in alternatives, you're also paying for that -- [laughter] >> it's being pushed by advisors kind of like getting into a taylor swift concert. ill not get behind the velvet rope. i'd be very cautious about that. fees are high and returns have been mediocre, and i think it's a very crowded market. warren buffett says keep it simple, a mix of stocks and bonds over the next five years could easily beat an alt-heavy portfolio. you could do 60-40, 70-30, 60% stocks, 40 president bonds depending on your risk toll lance. >> 60-40, apparently not dead. thanks, guys. fears of escalation in the middle east is have markets on

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>> the devastating war in the middle east entering its second week as israeli forces prepare for a grown operation in cause saw. this as rising tensions with hezbollah at the israel-lebanon border are ramping up concerns that the conflict are expand. u.s. markets are closely watching all of this play out. joining me is invesco global market separatist brian leavitt. thank you so much for joining us. >> thank you. >> so starting with the middle east, we're not seeing much of a reaction in u.s. markets, even in oil prices. why is that? and what's going to cause that

to change? >> yeah. the markets have become acuts customed over -- accustomed over time to not paying attention to regional events. does this change the trajectory of the u.s. economy and what the federal reserve is going to do. in both instances right now the answers appear to be largely no unless you see a wider confrontation emerge, a sustainedded rise in emergency price -- energy prices. for now, i believe the answer to those questions are no. >> and just want to turn attention the washington now. we are seeing a little bit of chaos on who's going to be the next speaker of the house. again, the market does seem to be ignoring that right now, but is this a point where the market will be paying more attention? >> yeah. i mean, again, it's something that the market has grown accustomed to. so conflict in the middle east, dysfunction in washington, d.c., we've seen these things before. now, congress needs to have an appropriations bill, and we need to keep the government open by november 17th. congress was supposed to be in

recess over the next couple of a weeks, so the market is not paying attention right now. ultimately, congress tends to act when there's a need to act. goes back to that churchill line about americans doing the right thing only after exhausting all other options. [laughter] i believe we'll get there, and we will be able to, you know, spend what needs to be spent and keep the government open. >> okay. so we talked a little bit about some of the things that the market and economy are maybe ignoring or just not focusing on so much. but what are some of the economic indicators or that matter most now? >> well, the big news has been how strong retail sales was in the latest reading and the jobless claims number which continue to be strong. so it's pointing to u.s. consumer resilient and the job market very strong. and typically, investors would say why isn't that a good thing? usually good news is good news. but the market right now is treating good news as a little bit of bad news because inflation is still above 3%.

you would need it closer to 25% in order -- 2.5 in order for good news to be good news. interest rates go up and equity valuations have been adjusting as a result of that. >> yeah. it's always tough to know, okay, when do we want good news to be good news and bad news to be bad news ask and all of that. what does that mean for the path the fed is on now? just curious of what you see the fed doing going forward? >> the fed wha data-dependent wh is interesting because fed policy operates with a lag, but they're going to be data-dependent. we'll see what that means. the market expects the fed is done. if you look at the fed funds futures market, the market believes that the federal reserve has increased rates for the last time and actually believes that interest rates will be 4.75 a year are from now which means an easing cycle will start. i'm a little bit less concerned what they do in the next one and more concerned what they do in the series of meetings after that. i think we're at or near the end of policy tightening and

typically the end of policy tightening creates a better backdrop for risk assets. >> so just curious, if we were at the enor near of policy tightening, was the fed able to do a soft landing? are we going to see a recession? >> we don't know yet. i think it's probably too overconfident to think we can get through this without some form of economic down downturn. now, the good news is for investors we priced it last year. we were down 25% which is very much in line with the average return during a more mild recession. typically what you -- i think investors have forgotten that we can have mild recessions, because 2020, '08, '01 were so disastrous. you can have more mild downturns where the market falls 20, 25% and you're back at the new high within a year or two. those are years like 1991, 1981. so that's how i would view this. we're trying to navigate some weakness in the economy. the the federal reserve can pivot. if you get to a place where

you've already seen peak inflation, peak tightening may be here, peak rates, or usually that's a good backdrop for equities and for credit over is sub -- the subsequent years. >> how would you position? >> i would be positioned to think about what a new market cycle looks like. i think the way investors are positioned right now, you have a lot many -- in money markets and cash which yields 5% and a lot of money in growth and tech stocks because of how the markets have played out. i would say lock in some of those yields. don't just like it for 30 days, move into corporates or municipal bonds so you can lock in some of those yields. and on the equity side, diversify into more cyclicals, value, small or capitalization stocks. >> all right. around the world with brian leavitt is. thank you so much. >> thank you. >> netflix kicked off third quarter earnings in spectacular fashion and more of the biggest names are on tap for this week. our expert panel will preview

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♪ >> shares of netflix if surging on strong third quarter earnings released thursday. this upcoming week more big tech names including alpha get, meta the and microsoft are on tap to report. meanwhile, another tech giant took a hit as the biden administration slapped more restrictions on chip exports to china. all right, so is, alex, let's start with the news from netflix. we saw some subscriber growth. is this a one-time story on them being successful on cracking down on password sharing, or is there more to it? >> i do think this was a monumental report for netflix and potentially a longer term turning point.

i think the key is the company isn't standing on ceremony, and that's allowed them to make some important moves starting with advertising which they were initially complete completely against and now telling people they can't share passwords across various family accountses. both of those things are having a really big impact. as you said, they added 9 million subscribers in the latest quarter. that is a huge number, the most since early in the pandemic and a real rebound for them. in terms of the password crackdown, it turns out that users willing to pay for something if they feel like they're getting good content, and that's been the case with netflix. through it all, netflix clearly feels good about all this because they're also raising prices. so a lot of things happening here, and it tells you they're operating from a real position of strength. >> so disney has enough problems of its own, but does this put pressure on disney's streaming service? what's the implication there? >> i think we're going to learn a lot about disney in three weeks asks and whether this is a streaking -- streaming renaissance or netflix executing

well. when disney reports in november, the analysts are expecting them to report roughly 2.5 million new streaming subscribers across all its various brands. that's a far cry from netflix's latest quarterly number. so if they get anywhere close, i think it's going to tell us probably a lot about streaming overall that maybe streaming has started to come back from its, you know, post-covid lull. >> so let's talk about this coming week. most of big tech is going to be reporting earnings. what are you watchingsome. >> let's be honest, the real action in technology this entire year has been a.i., right? so i still think that the a.i. theme is the one across the board, across all these names you have to be paying attention. ironically, it's not what's moving the fundamentals. the a.i. results are still not in sales, they're still not in the bottom line, and so i do think there's a little bit of a race risk that if you don't hear enough about a.i. and if management teams don't do enough to keep the hype cycle going,

you could see a little bit of a selloff. so is i think it's important to just watch how management teams talk about a.i. >> alex, outside of a.i., what are the other factors you're looking at on earnings? >> all right, look, probably the most important fundamental thing going on is still in the cloud. for several quarters now we've seen this slowdown in excitement. we had growth for years of 50% quarterly in cloud, there's some signs that maybe that's bottomed and it's starting to pick up again. that'll is are a huge impact on amazon and a big impact on microsoft and a decent size impact on alphabet as well. i also will be interested in seeing what's happening with e-commerce commerce. i think -- e-commerce. i think this is similar to streaming where you're starting to see some return to e-commerce again, return to growth. that could be really good news for amazon. and then, look, for google, for alphabet and meta platforms, we'll be looking at the advertising platform. >> what about apple?

it's been down for six straight days. what's going on? >> that stock reports the week after. i will note they are down, you know, down about in line with the nasdaq, so it's opinion a tough time as yields have headed higher for most of these guys. i think apple's in a bit of one of these innovation lulls, perception of innovation lulls that they go through every few years. at the end of the day, they're still the all about the iphone, 50% of sale, and people aren't seeing a lot of excitement there. there's not that much you can do with an iphone every year, so that's potentially worrisome. their sales are flatlining right now, but i think these have proven to be buying opportunities in recent, in recent years when you'ved had those flat growth years. >> i disagree. i think apple's overpriced at these levels. there's no growth, trading for about 30 times earnings. at least alphabet and is amazon are growing, apple is not. there's also big risk in china where they get about 20% of their sales. tim cook's clearly worried, and there's nowhere near a.i. so

far. >> andrew, i would say look at the historical chart, you would say maybe that doesn't mean much because it's all about the forward-looking are results, but i take your point. >> i mean, what about nvidia which came urn pressure on the biden administration curbs on chip sales to china? the stock had a huge run, big valuation. what do you think of the stock and the outlook? >> i was a little bit surprised by how hard nvidia got hit this week on news that the biden administration was clamping down, because this has been leaked for weeks now. i don't think anyone should have been too surprised by what happened. ultimately, near term even yum term for nvidia, this really doesn't matter. they're already selling more chips than they can produce. >> thank you so much, alex. a lot to unpack there. and do you guys have some stock picks? we'll give you the self-play on ev stocks. stay right there. ♪ ♪

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♪ ♪ >> all right. so, ben, we know you are an auto enthusiast, frequenting driver. tell us what you love about bmw. >> nobody should talk to me about cars -- watch. [laughter] but barron's has a new stock, bmw. all the german car companies really looked like they had missed the boat on evs, but it turns out bmw shipped more cars and more everybody vs in the third quarter than rivian, ford and gm combined. and it's been successful by making electric versions of the cars people already like. if you like their sedans, there's an electric version. if you like their sports cars, there's an electric verse. al root teak -- took their suv for a spin, he says it's just like a regular suv is, it goes a heck of a lot faster.

>> how does it stack up on valuation? >> like a lot of these stocks, it is dirt cheap. very similar to the others. it also has a lot of cash on the balance sheet which makes it look cheaper. but the best thing about it is that it actually has 15% of its total sales are battery electric vehicles more than volkswagen, gm and ford, and that means it actually has -- it's guaranteeing itself a future in a world that may or may not be ev. that means that investors can look at bmw and say, hey, i like the fundamentals and not worry about whether it's going to be around orbit. >> all right, well, thank you. let's turn to some actionable ideas. andrew, you were saying what the smart money was doing wrong, but i'm curious about this idea right now. >> i think buy blackrock. there's a lot of controversy about larry fink's woke views on investments b i he's actually built a very big business, a very good outlook, the biggest player in etfs right now. and the stock is pretty

inexpensive, around 17 times forward earnings, 3% dividend yield. >> and, jacob, what's your stock pick? >> mcdonald's. it was down as much as 13% since the middle of september when the ozempic news hit. if you look at 27, $28 billion of annual sales, probably north of a billion purchases made a year and the fact that the number of people that use ozempic next year is going to be 20 million even though it's growing, that doesn't hold a candle to the size of mcdonald's. >> interesting pick and not just because you brought french fries for us today. thank you, andrew, jay e cob, ben for your ideas. check out this weak's edition at barron's.com and don't forget to follow us on x, formerly known as twitter,@barron's online. see to you next week on "barron's roundtable." with "making money." ♪. >> this is a fox b