Episode summary
Can Government Data Be Trusted? Plus, Yeti and JNJ. | Barron's Streetwise
Barron's Streetwise
· · Hosts: Jack Bary, Andrew Bary
Summary
The episode connects a weak jobs report and big downward revisions to a bigger market question: whether investors should trust government data. The host argues that the Bureau of Labor Statistics has historically been staffed by career statisticians doing careful work, but that the firing of its head after the latest revisions raises a new risk around credibility, even if there is still no credible evidence the numbers were politically rigged. Terry Wisman of McQuery Group says the immediate market effect is straightforward: softer data makes the Federal Reserve more likely to cut rates, which is why traders have begun pricing in a September cut and possibly another in December.
The conversation then shifts from data integrity to portfolio consequences. Wisman says the bigger danger is not just manipulation, but the perception that future reports may be influenced or redefined, which could undermine confidence in CPI-linked assets. He points to TIPS, wage contracts, rents, infrastructure revenues, and utility rates as exposures that depend on inflation measures.
Separately, the host sizes up Yeti after a weak quarter and calls the stock cheap but still risky, while Johnson & Johnson looks more compelling after a strong earnings reaction. J&J’s pharma and medtech businesses are growing despite Stellara losses and talc litigation, and the host sees the stock as “full-on interesting” at about 15 times earnings with a dividend yield above 3%.
Key takeaways
- The host says the BLS still looks like a serious statistical agency, but the firing of its head creates a new credibility risk for investors.
- Terry Wisman says the weak revisions make a September Fed cut more likely, with a December cut also coming into view.
- Wisman warns that even the perception of politicized data could hurt TIPS, wage contracts, utility rates, and toll-road revenues tied to CPI.
- The host thinks Yeti is cheaper at about 12 times next year’s earnings, but he is not convinced drinkware growth will rebound next year.
- The host says Johnson & Johnson looks more attractive after its quarter, with over 20% year-to-date return, a dividend yield above 3%, and growing pharma sales.
Notable quotes
“The Federal Reserve is more inclined to cut rates if the data is poor”
“What is new is that he's now in a position of power to do something about it”
“it was the fact that these revisions in the latest report were so poor that has induced the market to believe now that the Fed may cut in September”
“if you thought that there was something that was going to happen where inflation would run hotter than everyone was saying, then maybe you think, well, let me buy tips”
How the episode opens
The Federal Reserve is more inclined to cut rates if the data is poor. And in fact, it was the fact that these revisions in the latest report were so poor that has induced the market to believe now that the Fed may cut in September and that it may cut again in December. In fact, it's not even cuts three times this year.
Hello and welcome to the Baron Street Wise podcast. I'm Jack How and the voice you just heard is Terry Wisman. He's a strategist at Mcquaryy Group and the author of a recent report titled, "How do you play the data integrity mess?
He's going to talk to us about the recent firing of the head of the Bureau of Labor Statistics and what it means for investors. We'll also talk a little bit about Johnson and Johnson and hear from that company's chief financial officer, Joe Wal. And I'm going to say just a couple of words about Yeti and what I'm calling Peak Chug is a water bottle thing.
Listening in is our audio producer, Alexis Moore. Hi, Alexis.
Hey, Jack.
I'm back after a couple of weeks off through the magic of uh podcasting arts. I know you kept the episodes flowing here, so maybe people didn't know I was away. Um, I want to talk to you about cars.
Help me diagnose a problem. I've already fixed it, but I'm driving the car and every time I hit the brakes or I hit the gas pedal, I hear a metal bong. Sounds like a bell noise.
It's coming from underneath the driver's seat. I can feel it and I can hear it. What do you think it is?
I think it is a child or even an adult has left something in your car that shouldn't be there.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- government data trust
- jobs revisions
- earnings stock moves
- labor market data
Companies and tickers mentioned
- YETI
- JNJ
- Yeti
- Johnson & Johnson
Watch the episode
Watch “Can Government Data Be Trusted? Plus, Yeti and JNJ. | Barron's Streetwise” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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