year. so we give the gift that keeps on giving. we'll be following this on mornings with maria, weekdays 6 to 9 a.m. eastern on fox business. i hope you will join me here on weekdays, and i'll see you over on fox news channel on sunday morning, 10 a.m. eastern live for sunday morning futures. i've got exclusive interviews this weekend with house ways and means committee chairman jason smith, house china select committee ranking member raja krishnamoorthi. trump media ceo devin nunes and utah senator mike lee. sunday on fox news. join us for sunday morning futures. that'll do it for us here on fox business. thank you so much for joining us. have a great rest of the weekend i'll see you again next time. >> on the barron's roundtable sponsored by global etfs. >> welcome to barron's roundtable where we get behind

the headlines and prepare you for the week ahead i'm jack otter. coming up, the federal reserve's final meeting of the year is just days away. and investors are expecting a third rate cut. but apollo's torsten slok says to expect rates to stay higher for longer. he'll share his 2025 outlook. and later barron's is out with our list of top stock picks for 2025. we'll take a look at which companies made the cut. but we begin with our expert panel and three things investors ought to be thinking about right now on the barron's roundtable. my colleagues jack howell, megan leonard, and andrew berry. so, jack, the s&p and dow were down a little bit on the week. the nasdaq eked out a gain. what was on traders minds. >> well stocks are still up massively for the year. so maybe just call it taking a breather. we did get some big stock declines after financial results from oracle and adobe. but there was also a big gain for broadcom. so to me it's not a clear trend there. alphabet had a huge week. that was after announcing a quantum computing breakthrough. and we got some

inline inflation numbers. that makes a rate cut from the fed seem likely in the week ahead. >> i think actually traders are pricing in somewhere in the 97% odds for a rate cut. but keep in mind we're going to get that cut and then we'll probably be on pause for a bit. >> let's go back to the quantum thing, jack. that's been a red hot area. >> this was an embarrassing week to be a supercomputer. google said it has a new chip called willow that can perform this benchmark calculation in less than five minutes. that would take today's fastest supercomputers length of time longer than the age of the universe. that is a dunk in your face supercomputers. so one day, these types of quantum computers like willow could could lead to drug breakthroughs. or maybe they'll lead to battles over data encryption. but for now, what they're doing is mostly making stocks go up. google went up 5% both tuesday and wednesday. if you own anything with the word quantum in the name, you're probably doing pretty well right now. quantum computing up 584%. d-wave quantum up 344%. doesn't even really need quantum in the name. there's a

company out there called rigetti. it sounds like a tomato sauce brand, but it's a computing company that was up 547% year to date. and of course, there are also exchange traded funds once called defiance quantum etf. >> aren't these pretty small companies? most of them. >> most of them and not yet profitable? >> yeah, i called apple. i tried to order a quantum macbook. they said it's not quite there yet. >> yeah, i'd say i'd say in the cycle where five, at least five years too early for the free cash flows and probably five weeks too late for the best stock gains. but there have been predictions they would have the leadership to the left rest of the 493 in that day is not here yet. >> and it has been for the entire year many highs and apple microsoft are doing very well it is about 70 percent on average and accounting for the

s&p 500 and nvidia almost tripled. >> what is your favorite? >> i point to meadow and exchange about 25 times with next year's earnings. the alphabet looks good and nvidia was 30 times next year's earnings to ratchet up 50 percent next year after doubling this year. and highlights just how well the company is. >> we will talk more about that later. but for now investment bankers are licking their chops seeing a big year for m&a. >> they might need to hold their horses. >> good news and good news it was a typical week for the kroger albertson deal a federal judge said no dice and unfortunately that just has been apart. we have seen albertsons to kroger the deal is off and even additionally to that particular deal the us steel

may actually be in jeopardy as well. the biden administration may put a little bit of a block on that. not a great week on the mergers and acquisitions but and with enthusiasm with the trump administration is taking office. like energy and media and even the bank sector are doing very well. but tech on the other hand may have less of a bonanza. we do have jd vance has been in lockstep with the current ftc commissioner. she is out so that may ease things up but probably not for tech. >> goldman sachs of the big bank stocks and david has been very optimistic about the outlook. >> it is interesting with strange bedfellows the trump administration has been negative on the us steel deal

so that will not happen. >> it is in. >> but it is interesting because me will maybe see capital one and discovered deal take place that was announced in february and it has been on i.c.e. and under review but we may actually see a little bit of movement and that combined entity could be a big competitor for the american express of the world. keep an eye on that it is for the investors. >> that deal may happen. >> there is disruption is not only credit card but i do suspect seeing a lot of action in the media industry. >> we've already started to see people line up in comcast made some moves and we all although -- -- also seen spinoffs in the space with private equity is a big player. we can see a lot of different types of activity over the next year. >> the economy is firing on

all cylinders that is what the chief economist has be

is back at around three. the problem is that we are not quite back to the fed's target of two. so yes, three is good,

but it's just not quite good enough. and the challenge is looking into next year that we may get some tailwinds coming to inflation from the new administration potentially that could potentially therefore play a role for markets that the fed is just not quite able to cut interest rates as much as they have previously talked about. >> those tailwinds for inflation would be from what policies. yeah. >> so trump on the campaign trail has talked about a number of things. but the three things that probably are most important for investors are that he's talked about lower corporate taxes for domestic manufacturers to 15%. he's talked about introducing tariffs 60% on china, 25% on mexico and canada, and maybe ten, 20% on everyone else. and he's also talked about we might need to see also some restrictions on immigration. and it happens to be the case that all these three policies will probably put some at least modest upward pressure on inflation. so the bottom line problem is that the economy is already strong. and if we add some modest upside pressure to inflation, that will mean that

the fed will have to keep interest rates higher for longer. and it's going to be more difficult for the fed to cut interest rates in 2025. >> i want to give you credit because you have been saying literally for years that interest rates would have trouble getting from 3 to 2, and that the us economy was stronger than most people thought. so your crystal ball has been clear so far. we'll see what happens. i want to ask about the investment implications here. but first, you have continued to be bullish on the us economy and bullish looking forward. and yet some people feel so lousy about the economy. what makes you bullish? why do others feel bad? >> well, i think a very important aspect of what's going on at the moment is that consumption on average is doing well, but that reflects some differences underneath the aggregate consumption numbers. we are seeing that, of course, stock prices have gone up. home prices have gone up. if you own fixed income, the cash flows you get in private credit, the cash flows you get from your fixed income investments at the moment are at the highest level almost in decades. so therefore people who own assets, they

have generally been doing quite well, whereas individuals who have debt have generally done less well because interest rates have gone up. and who is it that owns debt? well, if you owe debt to someone, you are generally a younger household because when you're young, you owe money on your credit card more than other generations, on your auto loan, on your student loan. and therefore people who have more debt have been more vulnerable to the fed raising rates. so there is some segmentation in who is it in the consumer space that's been doing well and who has been doing less well. >> so what does this mean for the stock market next year? >> well, the challenge of course, for the stock market is that when interest rates are higher for longer and we still have a good economy, that should mean that we should see growth. but the challenge is that the stock market is now so concentrated in the magnificent seven, and the valuations of the magnificent seven are very, very high. normally, the p e ratio for the s&p 500 for the last 50 years has been around 16 or 17. but you see that the p e ratio for the top ten companies in the s&p 500 on a trailing basis is at the moment, 49. that means that a

lot of these companies that are big, namely magnificent seven especially, are very expensive. so that makes it difficult for investors to put more money into the s&p 500, especially when those stocks that have been driving returns continue to be at very high p e ratios. >> we're short on time. you like midcaps because they're big enough to not have too much debt, but a little bit smaller than those those mag seven. >> that's why if you have to be in public equities, i do think that you have the a highnd andr expensivee expensive stocks and the big stocks, they are very, very overvalued. and the small cap stocks are vulnerable to interest rates staying higher for longer. in the russell 2000, 40% of companies have no earnings. so that means that if you have to be in public equities, i think the mid-cap companies are generally looking better. >> and you keep saying public equities. i'm hearing a lot about private markets. fewer companies are going public, of course. so you are a fan. and of course apollo is big in the private markets business. why do you like it? >> well, what's particularly interesting, of course, in private markets at the moment is that if interest rates are higher for longer, you can go

up in quality. in investment grade, first lien, senior secured top of the capital structure and if yield levels are higher and the spread on top of yield levels are still more, at least a higher elevated levels relative to where they've been historically. that also tells you that you can get nice cash flows in fixed income, in particular in private credit at the moment, benefiting from the level of yields being higher in safer assets such as investment grade credit. >> all righty. we're going to have to leave it there. but torsten slok, thanks so much. see you soon i hope. thank you. jack behrens unveiling its top ten stock picks for 2025. we've got ♪ you know i'm a dreamer ♪ ♪ but my heart's of gold ♪ ♪ just one more night ♪ ♪ and i'm coming off this long and winding road ♪ ♪ i'm on my way ♪ ♪ i'm on my way ♪

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with so much great entertainment out there... wouldn't it be easier if you could find what you want, all in one place? my favorites. get xfinity streamsaver with netflix, apple tv+, and peacock included, for only $15 a month. ♪ jack: barron's is out with our list of the top ten stocks for 2025 bedding that value-orientet value-oriented investing isn't

completely dead. andrew berry is our resident stock picker and, andrew, one of my favorite stories of the year with. was there any kind of connective tissue between your various stocks? >> we tack a -- took a value-oriented approach. we think you could see some pockets of opportunity elsewhere. jack: uber, that stock has been out of favor with investors in recent weeks. why did you like it? >> i mean, it's rapidly gone from being in favor to the autoof -- out of favor. the fear is robotaxis may somehow bypass the uber network. it's tesla and waymo who are the leadest. i think those concerns are overdone. i think they may welcome around. the stock is trading pretty inexpensively trs -- strong cash flow. jack: you're also sticking with one of your picks from 2024, alphabet made the cut.

why are you still optimistic year? >> it was a great performer last year, it was our best choice in 2024. overall, we had a tough year partly because hertz, the rental car company, did poorly. alphabet's still looking quite good. the stock is one of the more reasonable of the mag 7 trades about 20 times next year's earnings. it looks like their strength in search will not be affected too much by some of the a.i. trends as they embrace it. in this the quantum computing news this past week where they developed their engineering capabilities, and they've got waymo, cloud computings, youtube and others. it's a nice package. jack: youtube has more streamers hand netflix. >> andrew, one had exposure to china. let's take alibaba first. what is it with that company that so much excites you? >> it's the leader many china and e-commerce, leading the cloud computing play in china. it's been out of favor for many

years, stock's trading around 90 right now which is about 10 times next year's earnings. it's got a lot of or cash on the balance sheet, and it looks like the chinese government may be taking a more favorable attitude toward the home grown tech companies. the big issue is china and how the trump administration is going to be dealing with china. i think it could be more bark than bite with trump on china, so i think it's an out of favor company, and it's pretty well run. >> now, you also have a luxury play here a little bit here, lvmh. i'm really interested here because, again, it also has education r exposure to the chinese economy. where are you seeing some value in this play? >> well, you would think they would be having a strong the year given how well the markets are doing and how much wealth is being created in the world, but it's down about 20%. china's been a problem, probably the biggest market. but i think next year will be better, and the chinese market could improve, the u.s. market

could improve. the rich have never been richer. it owns louis vuitton leather goods like $2,000 handbags, tiffany, alcoholic e bev with ranges like hennessey cognac as well as sephora. and also bernard around fault, the ceo, controlling shareholder, has been buying the stock recently. >> you're picking citigroup. i've got two questions. really? and why? [laughter] >> well, a perpetual underperformer. it's been the worst among the big banks. i think it finally could be turning around. jane phrase frazier's been the ceo, she's refocused it. their three largest businesses have good, international payments, investment banks as well as one of the top credit card companies. the stock's pretty inexpensive right now, 3% dividend yield. it's the only to one of the big banks trading below tangible book value, so mike mayo, the analyst at wells fargo, it's his top pick. he thinks the stock could

eventually double. >> schlumberger, or slob as the old times call it. what do you like there? >> s.o.b. is the ticker, hence the nickname, slob. it used to be dominant as far as what growth investors wanted. it's been out of favor. the strock's -- stock's trading around 40, but i think oil's going to be around and natural gas is going to be around for decades. it's going to be servicing that industry. stock's around 40 which is is 1-12 times next year's earnings. -- 11-12 times. it's the exxonmobil of the services energy. jack: we can hear jack and andrew talk about the rest of the picks on jack's pd if cast. what are you expecting next year? if. >> i think it'll be a decent year. interest rates, marley treasury rates have been moving higher recently, and you see the 10-year now around 4.30, 4.40, move up toward 5%, it could be a problem for the stock market.

jack: thanks, guys. in addition to the street wise podcast, of course, go to barron's.com to see andrew's pick. and coming up, andrew and megan have investment ideas, and jack's going to tell us how to pretend to understand quantu progressive makes it easy to save with a quick commercial auto quote online. so you can get back to your monster to-do list. -really? -get a quote at progresivecommercial.com. your shipping manager left to "find themself." leaving you lost. you need to hire. i need indeed. indeed you do. sponsored jobs on indeed are two and a half times faster to first hire. visit indeed.com/hire

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♪ >> how would you determine the ground state of quantum system with ono exact solution? >> weigh function and various perimeters until i found the lowest energy solution. >> hmm -- [laughter] jack: this is not a rerun of "the big bang theory," this is jack hough explaining in 60 seconds what this quantum computing is all about. >> traditional computing uses bits where you store information at 0s and 1s, that's it.

quantum computing uses cue bits based on the material of subatomic parol particles. there's a thought experiment has used to illustrate that that involves a cat in a box with a raid e yo active element and a poison, and you don't know whether the cat is alive or kid. i don't have a cat, but i do have a dirty the old skunk that my dog likes to carry around in the woods. [laughter] you put it in the box and, you know, under regular binary computingst the either alive or dead, but in quantum computing, it can be both alive and dead at the same time with probabilities for each as long as we don't look at it. there are parts here that's called a super position. there are parts that i don't understand including everything i just said -- [laughter] but the upshot is you can use a quantum computer to do mavisly parallel computing, it's much faster than traditional computing for certain types of jobs. jack: okay, that didn't help me at all, jack, sorry to say. but when a.i. and quantum computing get together, they're

going to subjugate all of us. [laughter] in the meantime, let's get some stock picks. megan, what do you have? >> i don't have a skunk in a box, but i do have restoration hardware. i think this is an interesting play right now. it certainly didn't have a great last quarter. it missed some estimates, but it is really project jekylling for a strong fourth fiscal quarter, and i think it's going to be a solid play. they've been doing a lot of rejiggering of the company, they've got some interesting product lines out, and i really peel like it's going to be one of those luxury plays. we're seeing uptick in the real estate market. everyone needs furniture, this is where i'm at. jack: you can get a druggerful for $100 -- drawer full. >> i'm thinking 250, but cool your jets. jack: andrew? >> pepsico has been a stock that's down about 5% this year, a couple concerns. growth is slowing, you've got to semipick effect hitting demand as well as rfk jr.,

manufacturers of snack goods in his sight, but the stock looks pretty inexpensive, it's around 20 the times next year's earnings with about a 3.5% dividend yield. and i think that americans' appetite for snack foods and some of the beverages they make is not going away. jack: do not bet against fritos. all right, jack, schroedering ear's kink -- skunk, gotta love that. that's all for us. we'll see you next week on "barron's roundtable." ♪