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>> welcome to parents friend table will begin behind headlines and prepare for the weekend coming up markets are climbing right cut optimism o'clock's bill on three great companies stocks are surprisingly cheap. jack: later hybrid reits hitting the housing market hard in the fence presume rate cut next week, may not be a quick fix and will break down why will be begin with our expert panel of three things investors ought to be thinking about right now on the barron's roundtable by calling sven levinson and la foreman andrew berry is a bit last week we wandered out about, could be a.i. trade be dead and missing that you get a very firm answer this become of it is thought. >> it is that and think about 30 monday afternoon at the market closed and said nice things about how a.i. was still alive and going to spend his money it's all a needed and video was back in as close up to 16 percent this week.

semi connectors talks of 10 percent is a fantastic week protect generally it is also pretty good week for all of the as well 390 the s&p 500 were up this week partially because optimism run for you step back and it sent seven rep about 7 percent in the nasdaq was up about 6 percent at its best week of the year as if he also had best we could be rep 4 percent of the dow up 3.27 it was a great week and for tiny little hiccup on wednesday after the inflation report c1 so we are graced by your presence alena special guest from investor sister publication and you really were carefully looking at the charges awoke for the charge telling you as an actual was having been discussed. allie: exactly what a 180, from the first week of september right, and things kicked into high gear on wednesday we saw an outside day outside reversal of that it's very very and the bullish signal, meaning that the low in high today totally engulfing the prior day and so

the s&p was down 1.6 percent on wednesday they came roaring back closing up with a two and half percent swing by the end of the day and so that was a moment of shift absolutely and your expectation continue strength and that's exactly what we got thursday and friday. jack: momentum is at reasonable prices you guys call it and so we have the fed set up now when you see happening next week. >> viewed asked me physical days going to the federal cut rates by one quarter or point within get a story in the wall street journal from nick timorous whose crime scene is that that spur. ben: top of the sensor date remember whether it be have a point to point out the other point up and so we really do not know we know will get to cut weather's going to be four-point half-point remains be seen. bill: to half-point camp i don't know why the fed does not go ahead with the short-term rate of us five and half are now wire now with most interest rates under 4 percent given the inflation is running under because no reason the fed cannot get the 50 basis points and you

don't get the short rates about 4 percent in the next six months. jack: i agree with you but the one thing that makes me think that maybe not is that the history of the half-point cut not right and usually it is a cyber session it's a lot that i think the and i wonder how they will explain it so it be interesting wednesday the story coming up this weekend, have about now to be investing in stocks and that falling rate environment and when you see there. allie: i think he will be the market reaction next week and we know that cut is coming but have a committed to you today that what is the market going to do when are we going to neatly more bullish or bearish thing to give you headlines ahead of time, i'm still ongoing to know how to traded and so with that being said, i think that we should look at stocks like royal caribbean, this is a is live course and in a low rate environment that is great for shipbuilding and like buying

stocks disclosed to keep moving averages in all the technical traders on the 50 day lines of royal caribbean is about 5 percent about the ten we find really snapping back from the prior week and so i think it's an ideal set up. jack: also in the central bank would you see there. allie: an inverse relationship between bonds and gold and so when you see yields falling i think that actually investors now are already anticipating next week and you see the gold, outperforming and not only this week but if you take that step, all year long especially started in july, someone waited latest with new medical minor and so holding back to base ten rate moving average another technical level be like to get seeing a strong bathroom there and so that's one watch as well. >> and over $2600 an ounce and up about 25 percent plus beating the s&p 500. jack: andrew, that enjoy debate between donald trump and joe

biden some people are aware that disaster provided you came on the show and reported on some of the trump mouthpiece on the stock market and this week different story when did you see. andrew: will is like that kamala harris it was pretty much the clear winner you saw her the odds of her winning the election rise of the betting sites in south chino slight favorite to win even though the polls are somewhat mixed and you saw strengthen green energy stocks which another four years of prophetic administration and first green energy that was qc t up about six or 7 percent and some of the renewable energy oriented utilities like esn next year were higher and also the care stop humana which might bea loser if you get another four years of the democrats in the white house. jack: but there's a big difference between this reaction what happened after that first debate. then we had really sustained trenton some of the stocks benefit from a truck presidency because look like we were going to get the trump residency at

the presidency this and we had about some short covering ahead did not follow through this very big difference. >> this will change 16 times before november thank you guys in the markets are heading hires investors expect the fed to cut rates next week in the fund portfolio bill on where to put your money next. chase really knows how to put the hart in your local community. see what i did there? hey, jackie! (♪) evan, my guy! you're helping them with savings, right? (♪) i wish i had someone like evan when i started. somebody just got their first debit card! ice cream on you? ooo, tacos! i got you. wait hold on, don't you owe me money? what?! your money is a part of your community, so your bank should be too. like, chase!

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an eclectic for folio call the value fund that he had all the names people thought that is a thing and over recent years, yoe to earnings ratio is come to look like value now you are way below s&p 500 and think 11 or 12 times earnings, i suspect that you will tell me that it is the index is changed not bill nygren. bill: right at oakmark we have always had maybe a more inclusive view of the value that a lot of our peers have. in trying to identify with the business it's really worth from as opposed to just a simple p-letter ratio or price-to-book ratio. as recently as a couple of years ago, when the growth stocks were so down so much in price, is leading us to growth names in the tech sector, that's those names that come roaring back in a portfolio now looks very much like a traditional value portfolio so we are not doing anything different and what is changes how the s&p has become so dominated by hand the full

mega tech rapid growth technology companies. >> and i think that you told me that in your front of them he would never have more than 4 percent waiting in any given socket a sensing is risky if you're the s&p 500 index, well over that with five or six stocks. bi.bill: yes it's funny sometims people think of oakmark finance being risky fun because we are invested is so different complete the s&p the s&p now concentrated technology is our fund's and financials in our largest holdings, we've always thought the 4 percent was a pretty good can't print individual and they should not have more than 4 percent of their assets and in the name and i think there were no come the four or five s&p 500 names that are significantly more event that's. bi.jack: let's talk about three come easier for folio and three very different ones, and that's it started with gm below five in the price-to-earnings ratio in the company is some people were invited most of your.

bill: well we really become a fan of this company radically altered how they were redeploying the cash that they were earning up until about year ago gm had been reinvesting the capitol, trying to grow in adjacent businesses in this pastor the sewage due to entirely returning that to shareholders. they announce an accelerated share repurchase plan of 20 percent of the company. once that was completed, they continued to fight back and taking out well over one quarter of the shares of the company this year we expect them to continue that if the investors do not respond by acknowledging the higher value of gm chair. jack: this shift to offer betting you're not it big well you do hold company and you do think that that what is in 19 or 20 actually really oversees the price of that. bill: brighten something that off of been doing for years, they have the kind of other that's essentially into capitol

investments and i think made those to prevent the capitol firm on the balance sheet is ss and when they do it themselves, the cost go through the income statement as we head back those losses and after we had just for that we think you're buying search business will and youtube, for about 13 or 14 times earnings. i think it's pretty hard to argue that alphabet deserves to sell less than two thirds of the multiple of the s&p 500 c1 they could get broken up but it unlikely could happen but also legal threats for the know that you think that if they did get broken up and might even unleash the value right. bill: is right when think pickups do is to forces investors to individually value each piece of the company if they trade separately, they have to have a value. and our whole argument is when you add up all of the pieces, alphabet is worth significantly more than selling it so it might not be in the best real long-term interest of the

company to break up, but we think that it would increase the price that they had to do that. jack: i promised three stocks will get a corporate insurance 70. bill: spinoff from aig primarily in retirement services and insurance, they do not have much in variable and entity in their assets and liabilities are well matched five times earnings 60 percent of the book value we think is a well-managed company. jack: that's a cheap stock there and think you appreciate it. allie: enter. bill: think it. jack: event cut is on the move next week but don't expect a lower rate environment to fix the housing affordability prices just yet will break and what it means for homebuyers housing market, next.

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all in one place? my favorites. get xfinity streamsaver with netflix, apple tv+, and peacock included, for only $15 a month. where do i begin with our young character? the one thing she was sure of was that she wanted to be a writer but she had no idea how. is there anything new in that notebook? actually, i have been working on a little something and i'd love for you to read it. thanks for being in my life because you've been more than just a mentor. you've been a source of inspiration in my journey to becoming a writer. jack: homeownership is still ars

mortgage rates remain high and would-be buyers will not see much improvement and affordability from the federal reserve or from campaign proposals for the by vice president kamala harris or former president trump is appearance covers for this weekend we have parents imaging editor dear and finally here to break it all down and here and it's good to see you again and thank you for coming on. >> thank you for having me. jack: is almost enough to remember the 15 years ago when we didn't needed income for down payment and houses were selling easily what has changed. darren: all things really changed during the pandemic when the fed rates really sharply in the housing market took off in the sales took off of other people about the houses and then it all kind of collapsing the fed raise the race really sharply and left the prices really high and a lot of people shut out of the market and they cannot afford a house anymore in inventories did not recover this pretty much where we are today. >> this is situation with me in

the coming about a home in 2020, and thank you in the raleigh north carolina area and is great monthly payments and super reasonable and i have all home equity but in terms of the open wanted to move an hour away, even a lateral move is basically double the party so for now, i'm not budging. >> we know, there's been a lot of gloom about just how first-time homebuyers are suffering but for the average american homeowner, has been a boom in the 30 — 40 percent increase that we've seen in the home prices the last couple of years, his really fat in the home equity the me to be about a half million dollar home is number 700,000 in the equity in your home is a lot. >> 's trip of a locked unit i have great rated and do not want to move and darren get out of his housing gridlock. darren: there's no quick fix in about 40 percent of the homeowners, or sitting on just below 4 percent's and they do not really have a great incentive to move and there are some political proposals out there incentivize development

and kamala harris proposing $25,000 in grants for first-time homebuyers but what really needs to happen though is that housing prices would have to come down sharply and household incomes would have to rise sharply covers a 50 percent and mortgage rates would have to come down to 3 percent another that is remotely likely anytime soon. jack: andrew take us into the markets, you were bullish on housing stocks a couple of years ago that was a great call but it really run far do you still see an upside there. >> wealth homebuilding socks have been known the strongest groups in the stock market this year the industry leaders menorah 30 percent in toll brothers this up closer to 50 percent yourself before benefiting from a number of factors and better manage did they have great balance sheets and they are taking market share. maybe a little bit extended right on the trading higher than average multiples right now, not in the orphan and the stocks are often traded under ten times.

>> source but i actually like monument up so if you west point for moment plus reasonable pe with a lot of homebuilders said that scenario itself in addition to the regiment to come up we also have pvh and pulled the group and bring break partners and i have seen rebounds on the ten week line this week is another area seeing momentum and outperformance in anticipation of the cuss next week. >> the other options you go buy a couple of etf's and to stand out this pie recipe homebuilders etf it is six hb that actually leans towards the homebuilding socks then enough by tv witches and cheers u.s. home construction etf that has a mix of things about response retailers like lowe's and home depot and of the stocks that are housing adjacent. jack: darren the housing market is if it's monolithic when actually there are a fair number of regional differences what you see out there. darren: i think the places where we will start to see affordability improvement that is probably in sunbelt we see

some softening the markets like texas and dallas, the sun belt ten step favorable zoning and regulations for developers. there still a huge backlog and shortage of houses that need to be built in there's estimates out there for 7 million houses would be needed to plug shortages over the next few years and build was only putting up 850,000 a year pretty long way to go. >> you hear about weaknesses and some sun belt parties like temp of its have been storming to follow the kindness of the dallas embedded she has been a lot of inventory the dallas area right now and even austin which is been a hard to market is cooling off. >> before we go. jack: one question come the housing market not only affects everybody's lives coming it house in effect in the macroeconomy because it is such a big part of our budget is. do you see danger there for the economy. >> i don't know if i see danger but i think that if people are sitting a lot of home equity

gains after such you know big increases in prices of last few years, is a huge wealth effect to that if you have a mortgage that is under 4 percent, putting free money in your pocket right now. compared to today's rates and that can support a lot of consumer spending and home furnishings and purchases. the economy deteriorates we would see the housing go back out of it the very closely intertwined housing as you are not going to be think the tracks at the economy right now. jack: thank you and williams-sonoma stockpot a lot of the purchases meanwhile the men have a pair of investment is andrew predict the companies may to join the s&p 500, save rightn there.ou so i can learn about your family, lifestyle, goals and needs, allowing us to tailor your portfolio. (wife) what about commission-based products? (fisher investments) we don't sell those. we're a fiduciary, obligated to act in your best interest.

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jack: three new members were added to the s&p 500 who are they think about what is very crystal bar divorce next joint. >> will the s&p, adds about a dozen companies every year the s&p 500 which is the ultimate stock market club, even more important down jones jones the up-and-coming company wants getting and you know, this latest additions will develop technologies, and the software business as well as indemnity known but well-run insurer, the issue now is a good be next is socks off and get a pop as delta when they were added this week and i think that that two likely candidates were apollo global, the alternative asset manager which is right behind kkr dachshund and that which are both in the 500 from another potential additions working software company also points of point based which is the crypto brokerage mortgage terms.

jack: there's no guarantee, that joining the club is actually good for your stop and there's that pop in anticipation but some companies have done worse when they join the companies they were booted to make room for. >> supermicro was added this past year the young place about 50 percent and teslas actually little changed since it was added a few but in the long run, companies do well like nvidia, which were actually replacing a drug about over 20 years ago and of more than a hundredfold since then see what they didn't do so well but the deviled after getting a kick out of without freedom no so this go to ideas,) tradition what is your. allie: like the network some an artificial intelligence playing the computer networking space in a very close relationship with meta saugus of up over 50 percent this year but is trading within 6 percent of the ten week line so i think that you can use a decisive close blocked in my couch. jack: conduction connection to the company invent what about you. ben: all stick with the housing

treatment builder so source best performing of last ten years i think it's average about 39 percent annually they basically sell stuff to contractors and anything from companies with patients at a provided at great business to do it very well the rates coming out of there going to be over the patient's and more homes built that will be great news for a builders source and if pulled back, he does appear and periodically now the sink is getting ready to print going once again. jack: if you don't like the price you pay maybe make a little bit of money but fix the troubles and thank you guys, two more check out this weekend edition of parents are, that's all for us we will see you next week on barron's roundtable. >> ♪ ♪ ♪ ♪ ♪ -♪ bad boys -♪ whatcha want, whatcha want ♪ ♪ whatcha gonna do ♪ when the sheriff john brown come for you? ♪ -officer: you better stop...