tv Barrons Roundtable FOX Business November 23, 2019 6:00am-6:31am EST
that seldom ends well. that is it for us, the latest updates follow me on twitter, facebook, and instagram i'll be back on black friday for the retail in america, that is here on the wall street journal at large. thank you for joining us and have a wonderful thanksgiving. >> "barron's roundtable" sponsored by qqq. chris davis on roy davis advisors on bank stocks for growth and why he says they can boost your portfolio. no surprise test those who pick up, the cyber truck of the future of the ido industry? in groups joins us on the panel of whether you should prepare for a bear market in 2020. "barron's roundtable" starts right now. ♪ >> welcome to "barron's roundtable" with the sharpest minds on wall street to get behind the headlines and prepare you for the week ahead.
we begin with the three most important things investors should be thinking about right now. earnings season is almost over and while results were weak there is light at the end of the 2019 tunnel, test the unveiling a new pickup truck with the rollout did not go as planned, can the cyber truck keep tesla electrified in schwab and td ameritrade are close to a deal on a 26 billion-dollar merger and what will that mean for investors preyed on the roundtable, then, caroline and jack. jack i will start with you on earnings season, earnings were down but revenues were up a little bit but in retail it was not wishy-washy it was boom or bust. >> it was retail waccamaw, stocks were popping up and stocks were getting pounded down. there's a real separation we went where everyone was getting out of everything but amazon.com. now people are piling to target, it was a putrid and turned into
wall street. they are gaining market share in categories where weaker chains are getting hurt in closing down. that stock is doing very well. gap is done poorly especially if you consider the preannounceme preannouncement, everybody is fleeing that stock. >> them 7% today and coals as an example, more on sales but the earnings are worried about too much discounting, they don't lock it in nordstrom really surprised me. i was not sure whether this one would be a retail victim but they had a very well received report and people are liking with are seen in the department stores that can make a go of it. >> and a pretty good job of key ration, they've a lot of good stuff. what does this mean for q4 and were partly 2020. >> tdi q4. thank goodness. q3 was the last in down numbers.
i think things get better from here. we will probably see a smaller decline for q4 and return to positive earnings growth next year. wall street says 10% earning growth next year, no way. they're always up to height and expect that number to get cut in half. if you have 5% earning growth next year, stocks compare favorably with other aztec and investors like to see when things are getting better i think is positive for the market. >> can we get multiple expansion or 5% earnings and 5% growth market? >> it depends who you talk to bring some of them are saying will go from 18 times earnings to 19 to 20. it gets iffy because the investor behavior and how much everyone is going to fall in love with the market there's no way to know that for sure but it's possible you could see a little bit. >> eveline musk announceelon mus
truck. >> first elon musk had a much better view than that he said this is the best model and will be a better pickup truck than the ford f1 50 and the porsche 9/11. analysts say it's really weird. also credit suites say not ford and gm are breathing a sigh of relief is a very competitive landscape coming late 2020 when these are released. i think clearly credit suites does not see this as a threat and bullish analysts say the uniqueness could be a good selling point and lead to solid demand. the big question, who will drive it. i don't think the pickup truck driver will want to pull up to the worksite in this but then again -- >> i'm getting ready for a huge midlife crisis and that your vehicle. >> there are a lot of people who
drive pickup trucks that do not need them. i think the big point will this resignation with the metal trapezoid futuristic looking car or with buyers and some analysts say yes with tech enthusiasts with more than the pickup truck driver, that means it's amisha at best which of course can hurt profitability. >> the dealmakers were added this past week, schwab and tv ameritrade may be merging a $5 trillion plus brokerage. what's the follow. >> this is a huge deal. >> at this point we don't know if it'll happen but if it does it is huge. it had to happen, these companies have been watching these come down everywhere and the only way to survive this is to get bigger and the accommodation of tv ameritrade
and swap. no one was predicting this they thought e*trade would get bought out. this is a brilliant move, probably great for schwab as a company and the stock. >> a money manager told me that swab is amazon.com of financial services, the low-cost leader and if it was that before this this would presumably make it more powerful and more regulators will say about the deal if it's happening. >> that's a good question, good chance regulators will look at it and say it's too big. but there's also fidelity and other companies that are also huge. >> the current administration does not have a huge appetite for taking on companies like this. coming up one member of the panel says we could see
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>> a half a century ago by a value investor who took advantage of the market sustained for financial stocks the founder grandson is continuing the family edition of beating the index over the long term with a heavy investment in bank stocks. but the financial crisis the performance has been spotty. chris davis joined me now. over the past three months your favorite financial stocks have really served and led the market and i'm guessing the lot evaluation you think they still are in? >> absolutely we take a generational view of these things but you mention my grandfather and he started investing in banks in the 1940s and you think about the environment and people have gone to the crash, depression and world war, it took a long time for investors to have confidence
that the financial system was resilient and that the environment we see today we don't think it's a play for a year to the next decade we think banks are wonderfully positioned to build well. >> this coincided with the steepening of the yield curve in the right direction so you think it's more than that, potentially long-term play? >> absolutely the combination of factors that have come into place incredible durability, the strongest balance sheets in the last 50 years and they built up the capital ratios, your resiliency, the basic business model the strongest bank has shown gain market share and increasing dominance in the business model and five of the top eight or nine holdings are in the second century they have great durability and the cheapest valuations of any sector. in great profitability and they aren't overturning because interstates normalizing would be an added benefit to earnings,
dividends that should rise every year for the next decade. you will not see the elsewhere. >> banks have been around for a long time but skeptics say could there be issues not cyclical we had john stein on the show last week and he is offering an operation but 1.6% on checking and savings. no fees, meanwhile quicken is originating more origin than wells fargo. i'm wondering is there a better mousetrap than the old legacy banks and is it possible they will be bleeding retail sure. >> this is the way in which regulation works in the bank paper. i think about over my career the disruption facing banks. let's start with the big one money market funds were invented, people say why would i go to a bank i have a money market fund. what else was invented the merger under mortgage-backed security. you don't need to go to a bank
to do with the mortgage, they mortgage-backed security. atm, who need branches, we have atms, the internet, that will be the big disrupter, through all of this what we see, the highest profit and all in banking history. because people value the security, cyber protection and over time there is a lot of scale advantages that come from the so you have to look constantly be aware disruption but it's amazing how over 30 - 40, 50 years banks have absorbed the disrupter sources for the better surface to their existing client. >> what are you avoiding in the market? >> the other side of financials people are free to look at because they remember the great recession and they're worried in unstable, they imagine their risky when in fact they are much safer than they've ever been. at the other side is where people feel safe. if people feel safe they put up the business were rational
places because of looking and roomier. give consumer companies, utilities, these things on average are trading -- the s&p low-volume index, the trading at 20 - 22 times earnings with no revenue growth and i think i looked at the average company in the low index and is increased 30 to 45%. >> one more question, if all the talk in the market and what you look at and not look at your not said a word about the 2020 election, trade war, impeachment, you don't read the newspaper? >> if you take a generational view, what you realize is uncertainty, bad headlines, are constant. look at the last 20 years what we got there.
we've gone through the russian bond default, the emerging market, the tech telecom the collapse in real estate, the financial crisis, the euro crisis, there was two recessions. and yet what has happened, businesses, the underlying business is what creates. they have grown, adopted and become more profitable and more valuable over time. what we know next year will have a lot of bad headlines but if you invest for a decade or two decades you will have every session in times of raising rates falling trying to predict in trade, that's a loser's game. but investing on the idea the you be able to be resilient and go through the periods and build wealth over a decade that's how you maintain equanimity in the headlines. >> over ten years the market is up 450%. thank you very much part coming up our ideas on what you can do right now to improve your portfolio. first jim it's a seat at the table. that is
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>> with many risk factors facing the stock market, ben is feeling a little bearish for 2020. joining the roundtable is chief investment strategist jim paulson. before i get to you i want to go to bed give us your overview for two or three years you're been chronicling how the great tenure might come to an end and so far it is following your script. give us a rundown. >> back in 2018 when people were feeling bearish and on edge, i had an idea that the yield curve would invert into thousand 19 and that would cause a bear market in 2020. one of the reasons i was not worried in 2018 despite the volatility. here we are now and we have the
yield curve and there is the argument about whether the yield curve works or not. when you look at the data you see the economy has slowed and the leading indicator of the economy that has been doing their job in leading us. we seen them continue to weaken and unless they pick up we will see the economy go into recession in the market as a leading indicator as well and it will fall as a habit. >> that is pretty depressing but you have a more optimistic view on things will play out. why is bearish been wrong? >> i respect that a lot but i think a yield curve has been very good historically no doubt about that, is predicted since the 60s every time without a recession. but if there is one indicator that is messed up it could be the monetary indicators which the yield curve is a monetary
indicator and we've messed up monetary molly when negative yields and you wonder how good the indicator will be but mostly, i see a full on policy assaults in the last year given to this economy whether it's a big drop in long-term interest rates around the world or a surge of money supplies and most places in our quantitative easing back in gear whether physical jews being expanded and if this does not work i'm not sure what we will do in the next recession because we what of what we've done in the last year. it takes about a year and it's only been about a year since we started and were starting to see signs of improvement, economic surprise turned up around the world and even the market pmi they came up friday morning went up for the third month of the
row showing manufacture recovery and so far the job in consumer state together. i kinda like the combination of a lot of fear which means risk on asset are being underpriced with a full on policy assaults to prove things. if it does there's a lot of upside for market prices. >> to stats from been stories, he's looking at the atlanta fed predicting for ten of 1% growth which is pretty weak. it points out the number of job openings is coming down, do those were you at all or the other factors trump those numbers customer. >> all that stuff worries me. i would say the atlanta fed number has been down to this level were pretty close at different points in this year end so far by the end of the quarter and jump supplier in the
jolt as part of the reason the rolling over by consumer confidence and other things they cannot go a lot higher, there at such high levels if they stay at those levels it'll be sufficient to see us through so i remain a little more optimistic and 2020. >> do we just get one last hurrah for the economy in the market and then pay the price year down the road and maybe ben is right, order we return to sustainable growth but keep the party going. >> i think that's a good question and one of the things in 2020 will recover but the big story to your point, i don't know if the s&p goes up a lot but what could happen is a major leadership to the stuff that is and what leads men to share is going to be the small caps, emerging markets, international stocks in the defensive sector and lowball investing will underperform and you can have a
5% - 10% upside in s&p but a bigger upside in assets that have not participated. and to ben's point, if we have a better next year we have full employment and rates and inflation come back and that could create problems in the following year. >> thank you very much. i will have you back when you see the first glimmer, maybe ben is right. we want you back on the show. up next, roundtable members give their investment ♪ limu emu & doug hour 36 in the stakeout. as soon as the homeowners arrive, we'll inform them that liberty mutual customizes home insurance, so they'll only pay for what they need. your turn to keep watch, limu. wake me up if you see anything. [ snoring ] [ loud squawking and siren blaring ] only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪
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to the streaming works, i've never heard that comparison. >> is gotten very complicated to figure out what to watch and where, it's getting into electric cars. everybody had an electric pickup in the crossover vehicle coming, it will be a lot of manufacturers spending up front to make vehicles but i don't think will do a lot of volume. just a highlight in the same way there will be a lot of companies take a beating for a year to on streaming before they reach scale. i think it could get too crowded with new models in the next couple years ahead. my advice on car stock, stay away from car stocks and watch from a state undertake distant. >> usually means say prices. >> i bet you everyone will have to discount to remodels. you might get a great deal on a carpet technology is changing so fast you have to think about when you want to lock in on a car you alone for a long time. >> the tesla truck is only 3999.
>> jack was putting in his deposit. >> i don't know who can buy the low-end model. if you're going for the tesla truck you're going $70000, i don't think the salt a lot of 40000-dollar was. we want you to go into the coming week making her next move. one idea, the cover story. >> bullish on fisa, the company undergoing a big transformation it's getting rid of consumer brands like advil off patent brands which include viagra and can focus on drugs that can develop and by in the blockbuster drugs have the ability to move the price and in terms of prices it is down 10% year to date underperform in they're down, not without risk because that's on fisa making big scientific leaps. >> you like an energy stock conocophillips whether you're bearish or bullish this is cheap and pays a big dividend and it's getting bigger.
>> to read mark check out this week addition barron's.com and don't forget to follow us on twitter at barron's online. that is it for us. do not go anywhere, i will see you at 8:00 p.m. monday night, it is a date, maria bartiromo. >> from the fox studio in new york city, this is maria bartiromo wall street. >> happy weekend, welcome to the program that analyzes the week that was in positions you for the week ahead. i maria bartiromo. coming up the president of the new york stock exchange is here, stacy cunningham will join us. the godfather of the venture capital industry, alan is here to look at private valuations and where the growth in the economy is today. it's been an exciting year on wall street, the dow closed above 28000 for the first time ever, rockers all over wall street several big-name companies went public in filed ipos but has
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