tv Barrons Roundtable FOX Business July 9, 2021 10:00pm-10:30pm EDT
string of progressives who cover the full spectrum of crazy left ideas like so many democratic-controlled cities the authorities may not be able to run an election without tripping over themselves but at least the people can be relied upon to some degree of sanity. that is it for us, i'll be next week more in-depth interviews at the wall street journal at large. thank you so much for joining us. ♪ >> "barron's roundtable" and sponsored by invesco qqq ♪ ♪. jack: 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 ceo who turned online video platform video into a 10 billion-dollar company, later what will be the next big mean stock and how long can the crave last, as we begin
what we think of the three most apparent things investors are to be thinking about right now stock stumbled but worked down for long volatility is expected to continue. thanks kickoff second quarter earnings season and corporate profits holding up in the risks of holding chinese stocks as beijing regulators crackdown on companies listed overseas, on the barron's roundtable ben levisohn, carleton english and alex fuel, last month in june, the market was pretty placid and this week we saw a volatility come morning back thursday the market was way down in a chargeback on friday, what is going on below the surface. >> is sure look like that for a moment fears about peak growth early in the week and on thursday the delta variant concerns were at the forefront of everything after japan declared state of emergency and said there will be no spectators at the olympics. it really looked like the market was going to sell off but after a big drop at the open thing
stabilized in the market came back in by friday is like nothing had changed all three indexes the dow and s&p 500 and the nasdaq composite rates to all-time highs by the end of the week when it's almost as everything was hunky-dory again. jack: the one thing they did change it didn't completely come back the chart that we saw the ten year yield is down and 1.3 range which seems to suggest the bond market is expecting bad growth, maybe even a recession, was that a technical thing that will correct itself? >> that's what investors are tried to figure out right now there is a campus is look at these bond deals their signaling bad economic times ahead but there's another camp and says there is too much technical stuff going on to find a signal, the fed keeps buying bonds, yet forced buyers among insurance companies and also traders out there that know where the stock
orders are in hitting those and forcing people to buy, it is really hard to know if there is an actual signal what we do know when the moves are big and fast it scares the market and accelerates the drop in stocks. jack: what are you looking for next week? >> i'm going to keep watching the data and keep watching the technical things going on in the market but i will also watch earnings there's a tongue coming out because earnings season is starting next week. jack: let's talk about earnings with carlton analyst keep on raising the expectation and we hear the second quarter gdp growth is going to come in at eight or 9% i don't think we've seen that since joe namath was throwing the football, what are you expecting from earnings season. >> next week we will get a taste of every industry, the predictions are saying year-over-year are going to increase by 66%, of course you have to remember where we were a
year ago last year were basically and full economic shutdown there's a bit of a low base effect, there are signs of the companies have been able to improve, it's going to be a bit of a mixed bag companies talking about coming out of the pandemic of the recession and the path forward that they see as well. jack: this is the mother of all easy given how bad things were a year ago, what particular companies are you looking for. >> next week it will kick off with delta, pepsi and unitedhealth, you know me i love the banks and there's a bunch reporting next week j.p. morgan, goldman sachs and bank of america to name a few. jack: the one thing we might look at in their forward-looking statement as bond yields our interest that margins closing to the point where they are worrying? >> what people had been hoping for ahead of this bond yield that we would've seen a body mean out not sure if we will see that just yet, what investors
are going to look for is any sign of loan growth in any volume that can make up for the persistently low yield, investors are going to look to the banks to see how are they navigating the new normal trading revenue help them but will help them as much as year, also referred leases priced in and also share repurchases and dividend that the banks are allowed to do likely also pricing as well. jack: let's pivot to china, that was a big story or a big story last week we saw the right healing act the regulators crackdown on that and the shares plummeted another company pulled it back from a potential ipo, what is happening there. >> i think the ipo were still working through that and it's really changing the way u.s. investors are thinking about it in china and a recap, they rate $4 billion in the ipo, day later
china stop the company from signing up new users in china, not a good sign for the business the u.s. stock tumbled about 16% and now down 15% from the yoke christ and 15% from the yield hides, these are big issues and it's really a reminder that investing in china has been a pair of activities for investors, one thing to begin with if you're a u.s. investor, you've never owned an economic interest in ali baba and had a contractual relationship with the company and that kids around various chinese rules, now investors have generally been okay with that ali baba is up huge clothing in the u.s. and the crackdown is raising new questions is happening the day after the ipo it is pretty clear china was sending a message to investors around the world and its own companies. jack: coming up a
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jack: for use online platform vimeo with youtube and netflix but four years ago today a new ceo took the company and a different direction, now vimeo is a 10 million-dollar company and gives companies the tools to create high-quality video on their own last month a copy went public vimeo joined me now anjali sud i really appreciate it. it's an incubator that hatched max expedia what was it like growing a business and the environment. >> were the 11th company to come out of iac, there's a clear
playbook that they've done very well which is identifying a large market opportunity where others aren't focused putting a lot of attention, capital in the long term view on how you could disrupt the market and vimeo is a realization for that in the world of video software, i think we greatly benefited from the experience of iac and also ready to be independent and on our own and were thrilled to be in the position that we are today. jack: actually doesn't seemed like it's a new era you have adobe to zoom, how is vimeo different. >> we think of ourselves as enabling every business, every team, every organization in the world to use professional quality video the same way that they used tax or images or e-mail or chat today, we do that by providing a complete solution that is really professional so
any employee can use it. anything about video, video has extorted cleburne a form of entertainment in the hands of hollywood studios and then it became an expression that we create video on our phone and we think of the next wave video of every business using it as a really critical form of communication, in order to do that with the lower the barriers to make professional quality video much more simple and that's what we do. jack: what you described is an interesting phenomenon going out the economy which is dispersion, amazon takes retail directly and netflix brings the video or the movie to your home instead of a theater, how exactly does a small business owner want to use the meal, how do they help the small business owner.
>> absolutely, the way that most small businesses there focused on growing their business and to do that they need to reach customers and to do that they need to be able to engage among social media is a more engaging high-performing format, vimeo get higher click in newsfeed and most small businesses in order to make a produce video they would need to hire a crew and spend thousands of dollars on budget and have a professional editor common all to make a 152nd video that has a shelf life of a few days then they need to do that every day, the ecosystem was designed, it wasn't designed so your laundromat owner could create beautifully produced video and we've effectively tried to boil down those capabilities into a simple tool and a mobile app that allows you to make these
videos in a matter of minutes and clicks, same thing on the enterprise, most companies today to produce a live event they have a whole professional team and how that's doing that were building the capability that takes what you do outfox having a live tv studio, how do we boil that down to something that any employee from their laptop or browser can actually produce and manage. jack: you might scare some people in the tv business but real quick i want to go back to this asynchronous video even partially replace e-mail what would that look like in five or ten years. >> you pick up all the visa businesses communicate, we can mitigate in person and schedule meetings i videoconferences and communicate nemo and a whole another medication and you want to send a message and record your screen, you talking or
something with a slideshow behind you and you want to send that to somebody, what were finding is an idea of a synchronous video messaging and it's exploded to the pandemic i'll give you a couple of examples of how it's used a lot of companies are hiring right now, as the ceo we used to be able to walk around the office and meet the new hire but you cannot do that and you can't smudge a zoom call for everybody want to welcome to the team i sent a quick video message saying welcome to the team i'm super excited to work with you i get a message back and it's a really great way to have a personal connective asynchronously, receiving companies do this for training new hires, customer support, walking through product demos, collaborating internally and i think you're going to see this really exploded in the next years is another way that we can
all work better. >> it's a lot better than voicemail, thank you so much, we really appreciate it. coming up what forces are driving the mean stock phenomenon and how long should be expected to continue you may be surprised to the answers to the questions, i certainly was. jason, did you know geico could save you hundreds on car insurance and a whole lot more? cool. so what are you waiting for? mckayla maroney to get your frisbee off the roof? i'll get it. ♪ (upbeat music) ♪ ♪ ♪ whoa. here you go. (in unison) thank you mckayla! dude, get it. i'm not getting it, you get it. you threw it. it's your frisbee. geico. switch today and see all the ways you could save. there's an america we build and one we explore.
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for coming on, you cover the original mean stock gamestop for 20 years and the careful analysis that the shares were worth around $16 but at one point they hit 463 they recently traded $190 as a veteran security analyst how do you get your head around the mean stock phenomenon. >> it never troubled me when a stock was above my target because i always assumed investors saw something i did not like netflix capturing 200 million subscribers or tesla selling a million cars, this one i'm still scratching my head i understand it was a short squeeze and i think that was technically correct but is persisted for months and i'm not sure why the shorts come back for such a beating. jack: given that you expect us to keep going.
>> is einstein definition of insanity you keep doing it over and over and hope for a different outcome the shorts keep coming back they hated at 20 and hated more the hundred and hated more 200, as long as they think it's fundamentally worth a lot less the company has $23 of cash and no debt is certainly worth more than 23 out of $50 target they keep coming back and as long as they over short this stock i think the reddit raiders keep winning. >> it is carlson, you mentioned the reddit raiders and this narrative has been about the retail trader but you look at the move in the volume and the average robin only hold a few hundred dollars, do you think this phenomenon is retail trader or do you think adobe big money behind it or some other plane into this. >> i don't think there's any big money on the long side behind this certainly money on the short side and that's creating the mismatch the reddit raiders come in with a hundred shares at
a time and forced share price higher in the guise of the million shares short are squeezed, no big money on the long side i literally talk to one in the last month on gamestop and it was solely because they were indexed against the russell midcap 500 and gamestop was moving the index. >> i jumped on the day trading boom during the.com bubble and in some ways this feels like 1999, do you see the similarity in the difference between. >> it is the same i think the funny one is ryan cohen who is responsible for the whole move and all the memes he actually showed pets.com stock puppet which was a 1999 - 2000 explosion or implosion, i think maybe, you never know what is
really talking about but i think he was saying this is crazy so he put up the sock puppet, the reddit raiders are too young to remember that, i remember that very well. >> even if you believe in the town of ryan cohen and gamestop, is there any way they can actually build a valuable difference, no one's going to buy physical disk in the next few years. >> viable yes, you're wrong people will be buying physical discs in the next few years as long as there's a place to put the discs on the councils and the councils are new, they came out in november. playstation five xbox series ask each have a disk drive, this exists as long as somebody wants to make them the publishers will make them because gamers want to trade them in they look at a discontinued 20-dollar bill for the trade and they will keep buying of a gamestop will continue to lead physical sales
and they will dominate you sales, is a viable business, can the new management team take earnings from a dollar from a dollar 50 to whatever boot be required to the stair price ten or $20, no way, not a chance they can't grow revenue that much and they can't get that level of operating profit. i don't see a 10 billion-dollar company with 10% operating margins that's not going to happen i don't see how the company grows its way into the share prices. >> we have to go i have to ask intent seconds we have left, do you want to play parler game of guessing what the next object of the reddit raiders will be? >> i'm awful i covered a bunch of skills, they seem to love all of these oddball stocks, new egg is one i was looking at the cover, annoyed deal with that is. thank you so much, i appreciate
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jack: alex you embarked on a fun exercise which is to figure out what will be the next company to reach $1 trillion in market value. >> i been thinking about this since facebook joined the trillion dollar club making it the number five member of that club all the big tech is basically in their when will we get number six there is a long drop off call with the trillion dollar clip tesla's mast was $630 billion you might get there but it's not easy to scale cars like software other folks have mentioned to me nvidia and j.p. morgan the scale difficult if you of course need to make a bet
i would go with visa they were $500 billion a bit of attack and financial services hybrid the company makes money on every transaction that runs across the payment network, its economic recovery and by the way the stock is returning 30% on average annually for the next decade it wouldn't take it too much longer to get to the trillion dollar. >> that's an extreme regrowth trajectory let's go to actionable idea, we will start with you been. >> i don't want to wait to hit a trillion dollars i'm looking at visa right now people are traveling in their still using it for e-commerce and we see people use their cars generally total consumer credit rose 10% that's the biggest increase since march 2016 the stock is looking really interesting. jack: postcode i'm not using cash much anymore. carlton which are suggested and
might be a good time to rebalance if you haven't already this year the market hit all-time highs on friday were getting a ton of data from companies in the form of earnings in a perfect time to reassess your portfolio. jack: when stocks are going to the roof, that's an excellent idea, to read more checkout bearings.com don't forget to follow us on twitter at barron's online, that is it for us we will see you next week on "barron's roundtable". >> from the fox studio in new yorkrk city. street". maria: happy we can do all will come to the program analyzes the week that was in position you for the week ahead, i am maria bartiromo a wild week for stocks is past week veteran investor and founding partner of capital partners, mark is here to tell us where things go from here. as the border crisis razors on squad member rashida tlaib is pushing to defund u.s. immigration agency hou