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 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 and i'll see you again next time. >> 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. what's going on? >> 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 we'll see what happens. >> all right, sticking with tech andrew, there have been predictions that the mag seven would be ceding its leadership to the rest of the 493. that day is not here yet. >> no. not here. it's been a mag seven market for this entire year. you saw new highs in many, many of those seven stocks this week. i mean, apple, microsoft, the nvidia and others are really doing very well. the that group of seven is up about 70% on average this year. it's accounted for most of the gains in the s&p 500. you know nvidia has almost tripled this year.

>> so what is your favorite mag seven stock. >> well i mean i'd point to meta which is benefiting from the ai trend. it's trading for about 25 times next year's earnings. i think alphabet still looks good. and nvidia is trading for about 30 times next year's earnings. its earnings are going to ratchet up maybe by 50% next year after a doubling this year. take him who works on our staff just did a book on the company. he highlights just how well run this company is. >> okay. we'll talk a little bit more about alphabet with you later. but for now, megan, investment bankers are licking their chops. they see a big year for m&a next year. they do. >> but they might need to hold their horses because this week was not great. good news, good news, not so great news. it was a difficult week for the kroger albertsons deal. remember that. that's been going on for a bit. federal judge said no dice. and unfortunately that just has fallen apart. we have seen albertsons actually sue kroger. the deal is officially off. and even additionally to that particular deal, the us steel deal might be actually in

jeopardy as well. biden administration may actually put a little bit of a block on that too. so not a great week on on the mergers and acquisitions, but good news ahead. we do see a lot of activity, a real, you know, enthusiasm when the trump administration takes office. there is set to be potentially some less regulatory oversight there. sectors like, you know, energy, media and even, you know, the bank sector might actually do very well. tech, on the other hand, may have less of a bonanza. so, you know, we do have jd vance, for example, has been actually lockstep with the current ftc commissioner, lena khan. she's out. and so that may ease things up, but probably not for tech. >> i mean, one play on it would be goldman sachs, which is the leading merger advisor, has been one of the strongest of the big bank stocks this year. and david solomon's been very optimistic about the outlook. >> you know, it's interesting in terms of strange bedfellows. the trump administration has also been negative on that us steel deal. so i don't think that's going to happen. >> it isn't. but you know, it is something that is kind of

interesting because we're going to maybe see that capital one and discover deal take place. so that actually was announced in february. it's been on a little bit of an ice at this point under review, but we may actually see a little bit of movement there. and that combined entity could actually be a big competitor for the american express's of the world. so keep an eye on that one. i think that's a good bet for investors. >> yeah. and you're seeing the arbitrage spread on that deal tighten up, which signals investors are more confident that deal may happen. >> it really should. there's a lot of disruption in that industry. it's not as if it's only credit cards. we'll also, i suspect, see a lot of action in the media industry. >> definitely. we have already started to see people lining up. you saw comcast making some moves. i think we'll see other things where we may actually see some spinoffs in that particular space. private equity, also a big player there. we can actually see a lot of different types of activity over that next year. >> there's a lot of subscale players that need to get bought. >> absolutely. all right. >> thanks guys. the economy is firing on all cylinders. at least that's what apollo chief economist torsten slok has been saying for years. he'll look

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treatment is right for you. >> i find it challenging to come up with a gift that's really impactful, something that really makes a difference. jolie has been a tremendous gift. it's something that is not only looks beautiful, but makes us feel amazing and is something that we get to use every day. >> the latest inflation data out this week is giving investors an idea of what to expect at the federal reserve's final meeting of 2024. consumer prices came in slightly higher last month, and wholesale prices are at the highest level since last february. joining me now is apollo chief economist torsten slok. torsten, thanks so much for coming by. good to see you again. >> thanks for having me. >> so what is this new data mean for the fed meeting next week and for all of 2025 for that matter? >> well, we have seen of course, inflation come down after the pandemic. it peaked in the summer of 2022 at nine. and now inflation 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 high and more 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 right. 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 the list and the logic next. >> when you can't watch, listen. get the latest news, business and news headlines on sirius xm anytime, anywhere. fox news radio on sirius xm america is listening. >> customize and save with liberty mutual. >> customize and save. >> and then i wake up. >> is lemieux with you in all your dreams? oh, yeah. >> only pay for what you need. >> liberty, liberty, liberty,

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the cut, but the rest of the picks go far beyond the mag. seven andrew berry is our resident stock picker and here to tell us about it. andrew, one of my favorite barron's stories of the year. before we get into the picks, was there any kind of a connective tissue between your various stocks this year? >> well, i mean, we took a more value oriented approach. we think the market performance may broaden out from the mag seven, and that you could see some pockets of opportunity elsewhere. >> let's start with uber. that stock has been really out of favor with investors in recent weeks. why did you like it? >> well, i mean, it's rapidly gone from being in favor to out of favor. the fear is that autonomous driving and robotaxis may somehow bypass the uber network. i mean, as tesla and waymo, who are the leaders in that area, roll it out. i think those concerns are overdone. it's a very well-run company. i think they may come around and the stock is trading pretty inexpensively now. it's trading around $60 a share, which is less than about 25 times next year's earnings and a very strong free cash flow. >> you're also sticking with one of your picks from 2024. alphabet made the cut this

year. why are you still optimistic after a great run in 24? >> well, alphabet was a great performer last year, was their best choice in 2024. overall, though, we had a tough year in 2024, partly because hertz, the rental car company, did poorly. but alphabet is still looking quite good. i mean, the stock is one of the more reasonable of the maj7 trading for about 20 times next year's earnings. it looks like their strength in search will not be affected too much by some of the ai trends as they embrace it. this quantum computing news this past week where they developed this chip just shows their engineering capabilities, and they've got other great businesses like waymo, cloud computing, youtube and others. so it's a nice package. >> youtube has more streamers than netflix. >> so andrew, i was really excited to see that you had some retail stocks on this list and was once with exposure to china, which i thought was kind of interesting. so let's take alibaba first. what is it with that company that so much excites you? >> well, you know, alibaba is the leader in china. and e-commerce is also leading cloud computing play in china.

it's been out of favor for many years. stocks trading around 90 right now which is only about ten times next year's earnings. it's got a lot of cash on the balance sheet. about a quarter of the market cap is right now in cash. and it looks like the chinese government may be taking a more favorable attitude toward the homegrown tech companies. the big issue, though, is china, its economy, how well it's going to do and also how the trump administration is going to be dealing with china. i think there 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 lvmh. you know i'm really interested here because again it also has exposure to the chinese economy, particularly with that consumer segment. where are you seeing some value in this play? >> well, i mean, lvmh, you would think would be having a strong year, just given how well the markets are doing and how much wealth is being created in the world, but it's actually down about 20%. china has been a problem. it's probably its biggest market. but i think next year will be better and the chinese market could improve, the us market

could improve. the rich have never been richer, and that may mean more spending on luxury goods. it owns the louis vuitton leather goods, like $2,000 handbags. it also owns tiffany alcoholic beverages like hennessy cognac and dom perignon champagne, as well as sephora and also bernard arnault, the ceo and controlling shareholder, has been buying the stock recently. >> you're picking citigroup. i've got two questions, really? and why? >> well, you know, citi's been a perpetual underperformer. it's been the worst among the big banks. i think it finally could be turning around. jane frazier's been the ceo for the last couple of years. she slimmed it down. she's refocused it. there are three largest businesses that are actually quite good. one is international payments, another is an investment bank, as well as one of the top credit card companies. and the stock is pretty inexpensive trading right now, trading around ten times next year's earnings. 3% dividend yield. it's the only one of the big banks trading below tangible book value. and so mike mayo, the analyst at wells fargo, it's his top pick.

he thinks the stock could potentially double over the next couple of years. >> okay. and schlumberger or slob as the old timers call it. what do you like there. >> well so slb is the ticker, hence the nickname slob. it used to be a dominant company in as far as what growth investors wanted. it's been out of favor. the stock is trading around 40 right now, but it's a leading oil service company in the world. and 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. stocks are around 40, which is around 11 or 12 times next year's earnings, 3% dividend yield, a pretty good management company is viewed as being the exxonmobil of the services industry. >> we can hear jack and andrew talk about the rest of the picks on jack streetwise podcast. a couple of seconds left, andrew, take us to the market more broadly. what are you expecting next year? can we have another double digit year? >> well, i think it'd be a decent year. i would watch. the one concern i have is interest rates, particularly treasury rates. they've been moving higher recently. and if you see i mean the ten year treasury now around four 3440, move up toward 5% like it did earlier

this year. it could be a problem for the stock market. >> all right. thanks, guys. in addition to the streetwise podcast, of course you can go to barrons.com to see andrew's pick. and coming up, andrew and megan have some investment ideas, and jack's going to tell us how to pretend to understand quantum computing. stay right there. >> hey, get your head in the game, son. the scout from football college is up in the stands. >> maybe you'd rather go to school for insurance. >> i didn't raise no insurance, man. >> but you did. dad. >> football is your passion. but mine is providing round the clock protection to progressive customers who bundle home and auto. jamie, we need you out here for football. >> you're giving up on your dream, james. >> no, that i'm giving up on yours. >> oh, james, wait. >> oh, that's not the exit at granger. >> we know the ones who get it done. where? a lot of hats. a hard hat is one problem solver is another. whatever the job calls for, we're here for you. we're america's trusted source for industrial grade products.

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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." ♪ larry: hello, folks was welcome to kudlow. i am larry cutler. businesses and families are doing the trump dance was more on this dance with congressman wesley