than many others and the professor who has been with us from the start and has been critical of the fed throughout the entire year just doesn't believe they'll be able to do what they say. the final note is you always make us think. since you start out the gratitude, we express ours to you for being with us all year long all you as well. see you on the other side. "fast money" now. right now on "fast" a brutal 2022 mercifully coming to a close. titans of tech, apple, microsoft, meta, tesla, losing $4 trillion in market cap. ouch can a new year bring new life? plus, the all the edition of would you rather who brwins can a drugmaker slay the biggest banker on the street funny thing is its lousy

performance is downright fabulous to its peers. name and prediction for the next year coming up i'm melissa lee. on the desk tonight, jeff mills, actually here on the desk. guy adami and steve grasso we start by bidding adieu to 2022 we the major good riddance. closing with worst losses since the financial crisis nasdaq down for four straight quarters sifor the first time since the bust dow a relative outperformer but still shedding almost 9% could there be relief in sight history shows the s&p posts gains more than 80% of the time after a drop, and the average is 14%. are we in for another rebound in the new year i'll kick things off with jeff, because he's the only trader to make it in to the nasdaq to sit with me tonight.

>> very happy to be here i'm a stat guy i always throw stats out i love that shall especially history. but nit this case you throw stats completely out the window. a couple of weeks ago i tweeted that regardless of what you think about next year and this history, you are unwinding sort of unthinkable fiscal stimulus we've a never seen this before it's unusual we talk about it last night, the unwind of $18 trillion of negative debt down to zero if you could put up a multichart of the two year, it's unbelievable the move we've seen in rates and i think we have this chart made but this has been my north star and really is for the next 12 months it's the move in interest rates and the correlations to earnings earnings need to come down, and that's going to be a head wind to the market. if we look at this chart, you can see that downwind move, that's inverted. shows the upward rise.

that's gouk to drag positive revisions down as we move through 2023 that's why i don't think we're going to see a boom next year, even though down a down 20% year, you think we should. >> entire businesses, entire industries have been built on zero percent interest rates, grasso, so maybe yef is right, maybe it's different this time around i know we all hate that, but maybe it is. >> i'm with jeff i think when you look at stats, this time could be different, but i agree what he said when he finished up -- you need to see earnings estimates come down we haven't seen that yet so there is a disconnect but the other pushback is that's become so consensus right now. what happens if the market is shocked to the upside if when earnings start to report they're not nearly as bad as this earnings recession that the sell side is calling for? so then you can see the fed getting closer to the end,

earnings recession really a little meh, and then you see the market kind of, you know, rally from there i think in either scenario, the market's going to rally towards the back end any way do we get a sell-off the first quarter? does that lead into the second quarter? or do they do an all act for the bears? >> grasso said he thinks the idea earnings have to come down is consensus, yet theover all forecast isn't that. the first half of the year is going to be down and back of the year is going to rally that's consensus. >> what's that saying? great miennds think alike. steve is in that category. i'm in the mills camp. clearly jeff has been working out. he looks buff as hell. i'll say this, the bold case seems to be predicated on a couple things. we're so far down from the high

we made this time last year. and number two, somehow the fed is going to come in and bail us out. i don't think the second one's going to happen. in terms of the first one, i don't think you can build a case on the back of, that because it doesn't matter where things were matters where things are going if you look at what's going on, mike wilson took his numbers down potentially $180 in s&p especiallyings if you put a market multiple on that, it's significantly lower than where we are now, and i think almost by definition the market has to take another lower to flush this excess out of the system oh, by the way, which is my verbal crutch, the fed is still trying to unwind a balance sheet that got almost to $10 trillion, which was ridiculous >> so maybe it's worthy think about the other side of the stat we were saying two-year downyear in term of two straight years of declines, very rare. but in the four time it's happened since 1928, what

happened the second year the declines were even worse than that first year jeff >> right, and i think that's why you can't trust averages they can be deceiving sometimes, and i think the fed is a big part of this i think the market is forecasting rate cut in the second half of the year. we have this weird recency bias where all the people think that central banks can come in, save the day. we've seen "v" shape recoveries because of that. this time they're in a complete box. we're going to keep rates higher longer the market has not internalized that if you look at forecast for earnings next year, these high interest rates are going to work their way through the economy through earnings and at the same time earnings are forecast to be 5% growth or something like that in 2023. if we enter anything that looks luke a recession, you get 10% earnings decline that would be somewhat mild. i think the market needs to factor that in as we move through the next couple of quarters. >> we have had a notable drift

hire on the ten-year yield just in the past three weeks from 3.4 and change to where we are now, which is almost 3.9. we have japan raising the upper band of its yield control target, which is the last anchor, the last anchor in the world in term of holding treasury down, treasury yield i should say, guy. then we have china interesting to me china, the world's second largest economy opens up, and forecast don't change at all yet. that's a wild card in term of, how does that impact earnings estimates? aren't we just anotheraway or lockdown away from a threat to earnings, at least for this first calendar quarter >> i believe that to be the case and again, i love to be extraordinarily optimistic going into this year, it's just hard to make the case and what you just laid out is exactly right. there's a real chance that china -- let's say it were to re-open.

i think the knee jerk would be higher in market until people figure out, that's going to add to the inflation problem this federal reserve is trying to combat that's going to make their difficult job more difficult jaen pa, they intervened in their currency a few months ago. first time in a long time because their currency was getting throttled. this latest move in the bond market was to intervene again. now you think about central banks pushing buttons left and right. to me, that leads to one place, probably precious metals but current volatility in the bond market which will make its way into the equity market. >> grasso, looking at the first half of the year where you think it could be choppy, where do you hide out i hate to use that term, but sounds like to so many degree you're high out, waiting for better times ahead. >> i think if things get better, people are going to rush into the old names that buoyed this market so you have to stay a little bit clear, still go to value

investing, and then you're going to have to unfortunately rush right back into all the technology names that were hammered so aggressively >> all right the market carnage of 2022 gave us a lot of stocks that could be potential buys for the new year, so that gives us fodder for what could be the ultimate round of "would you rather. first up, meta versus amazon hmm. jeff, what you do say? >> i tried to play "woulder rather" last night and we weren't playing it so i'm glad we're playing it tonight i think you said i pulled a grasso this was a tough one for me. i wanted to choose meta just because of the valuation, the business that i think it is. i think there's a lot there, so if you have a three-yore timer -- i think it's interesting. the issue i have is in a risk off market, which i think next year is going to be, you're going to have people question the investment strategy around the metaverse, and i think the

reliance on advertising and the cycle we're in relative to that is going to be a challenge with amazon i think the market's got the profitability issues this year a little wrong i think it's short-term, and over the next year or so, you're probably going to see gross margin expansion as they shift away from the merchandise to services, aws, prime i think about it as an apple story where they're moving from hardware to services and the price to sales ratio, the right way to look at the valuation is right back where it was in the mid 2000s so i think you can buy it here. >> i know grasso is on the other side of this. >> yes jeff laid it out pretty well w both at or below the pandemic lows meta is so bad it's good camp for me we are getting some more clarity around the metaverse i don't know what this company's going to look like i don't know if it's going to break into two, three, whatever it's going to be, but i think it's going to be more value-add

than it was this year. it was so hammered and the consumer is probably going to be under pressure more so on the amazon side versus on the meta side. so for those reasons i'm more optimistic on meta verse going forward. >> this is one of those so bad it's, what, with carter braxton worth? >> so bad it's good. >> so bad it's bad, he said. he said so bad it's bad for amazon, too. he laughed, actually he actually -- you could hear him laugh at both of those stocks guy, so, would you rather? >> because he called in. it was a snicker it was unbelievable. extraordinarily derogatory. >> cut like a knife. >> i would rather amazon -- nice song by you, a little bryan adams. if steve can't explain what meta is, think about the problems they're having at meta themselves they don't know what they are. if you can't explain what the

metaverse is you're trying to create one, how are people supposed to understand it? oh, by the way, another vushl crutch, amazon at these levels i would much rather amazon. >> here's the next matchup j.p. morgan versus eli lilly jeff, what do you say? >> this is cyclical versus noncyclical for me at the same time it's interesting. it's also cheap versus you can pensive. lilly wins because it's noncyclical, but morgan is cheap. i think the valuation is more expensive than it looks like on the surface because earnings come down. i still want to be in the camp offer health-care where earnings -- eli next year. i like lilly. >> grasso? >> best bank ever created, j.p. morgan strongest bank that emerged from the financial crisis i think the banks have been underestimated

i underestimated them for a long time i stated the other night, make mayo said these banks are more recession ready than they've ever been before eli lilly is to binary for me. either it makes it or doesn't. i think j.p. morgan survives going forward. >> by the way, which is not my verbal crutch, grasso played nicely tonight guy, what do you say >> if it was j.p. morgan versus eli apple i'd take j.p. morgan unfortunately it isn't we've talked eli for years along the merck, best pharma out there. valuation has been a concern for five years seems to look past that. j.p. morgan obviously a great bank i would submit still has to come down in term of metrics specifically price to book so eli lilly in this game. all right, coming up, spin the wheel on casino to bes find out if there's any luck left in that center. jackpot trades next.

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welcome back to "fast

money. casino stocks delivering mixed results to investors the moves as gaming got hit with drastic and one predictable covid restrictions in china. what's in store for 2023 contessa brewer has the playbook. >> casino companies are getting ready with a lot of changes. first, in macaw, borders have re-opened. concessions have been renewed. millions in new investments have been promised. all this how about the fuel for the mother of all pandemic rebounds but the covid surge across china is reigning in expectations for an immediate boost in tourism, so patience will still be a virtue secondly, what recession casino companies across the united states keep doing a booming business, inspite of inflation that seems to affect other areas of consumer spending boyd, bally's, penn, and red rock resorts are watching closely their regional and local

casinos to see if there's cracks in the business. third, las vegas on steroids this already was a record-setting year for profits on the strip, and 2023 could propel sin city to new highs -- a packed convention calendar, entertainment -- i mean, hello, adele. and sports the highlight there is of course f-1. mgm and caesar's will be the biggest beneficiaries. because they're the biggest operators on the strip gambling is expanding. chicago getting its first casino texas is considering legalizing sports gambling. but weir seeing new concerns over problem gamble, and that is presenting new channels for the likes of fan duel, owned by flutter, draft kings, and bet mgm, the market leaders in sports betting. >> thanks, and happy new year to you. contessa brewer. >> happy new year. >> guy, i'll go to you the "w" in your dawn trade was

wynn maybe the timing wasn't right buck given china's re-opening, if it gets through all this covid first quarter, first half of the year, maybe it's gangbusters for wynn >> yeah, the timing was mid rabble lack at the move wynn had since october. it's probably rallied 60%. quite frankly, probably adds to it if i had to guess and still, despite the move on an evaluation basis you can make a compelling argument. the macaw numbers are going to be miserable based on what contessa just said i think you can stay with wynn i was a year too early as is typically the case this might be theier the stock gets finally to triple digits again. >> sports gambling, jeff >> look, mgm is better positioned, no question about it they're taking share that's all good. but i've got then trade very, very wrong

i was saying stick with mgm for that reason because of its domestic exposure. i'm going keep this simple i'll change my mind just looking at the charts. the price is giving me the answer look at wynn trading above the 200-day. the 200-day is rising. mgm is the opposite. come up, bring outyour 2022 glasses. up next, we'll reveal our charts of the year, and we'll make a couple new year's resolutions final trades you're watching asmo"ft ney. we're live from the nasdaq market site in times square. back after this.

welcome back to "fast money," and our chart of the year times two

it's a tie start with the first one apple's relative performance to the s&p 500, apple hanging on for a big portion of 2022, but then it snapped, so can rebound in the new year? >> the chart of apple so important because it's been you are guide telling us bear market is not over. >> right. >> i think that is still going to be the case i think you could move all the way down to 100. i think there's some support there. you would still be trading at 6 times, even if earnings hold up, so continue to watch apple. >> grasso, 16 times, down to 100, wow. >> obviously bag fat round numbers. so, we have been all consistent about this that the market has not bottomed until they sell the apples of the world. they sold it, but they haven't ripped into it so i agree with jeff if you think the market's going lower, look for that $100 level on app toll say that the slow is clearing. >> guy >> jeff has been consistent on this all year. tim as well.

we've talked about that $125 level. i think this is a good sign. i think you need apple, you need microsoft and the stocks to get taken to the woodshed in order for the broader market to make a bottom i don't think we're there yet, but i think it's encouraging it's starting to get there. >> let's get to the second heart of the year. mortgage rates, my, how they have changed in the course of one year the 3046 year fixed rate soaring 100%, sending shock waves through the housing market hit the highest level since before the crisis. what does this mean for housing, housing trades jeff, what do you think? >> the reason you want to watch housing is because it's the first to break when interest rates rise, and then it's going to be the first to recover when we reach bottom. it's one of the first incaters in our books look for housing to find a bottom in earnings and the stock market >> guy >> i like it a lilt differently. i still think as long as the

bond vault continues it's going to be harder for the equity market to put in a bottom. when this stabilizes and we have a handle on what real rates should be -- that coincides with apple and those things that's when we can talk about tradeable bottoms. >> we know a couple things higher for longer. we know that the unemployment rate has to go higher. we know the fed has to break housing. steve grasso >> they're just starting to break it we see building starting to crack. existing home sales starting to crack. pending home sales starting to crack. in the intro we went from 3% medical reportage rates all the way up to 7%, somewhere around 6 and change now depending how you look at it that crack in the housing market is just beginning and you're going to see that filter through for the the balance of 2023. >> guy, how about a home depot

or a lowe's? are those relatively safe? >> we thought that, and home depot had a pretty precipitous sell-off but finally it got to levels where you can make a case in term of valuation. i don't think home depot is going to hurt new a meaningful way some of the high sal situation, high growth names did. they'll be in an environment where it doesn't work, but i like it where it is right here. >> it's time for the final trade. let's get some new year's resolution trades. final final trade of 2022. steve grasso >> well, my new year's resolution is i want to gain ten pounds, i'm going to be less of a nice person, and i'm going to stream a lot more, so netflix. >> really setting the bar high for yourself guy adami? >> you know, new year's resolutions are, you know -- i'm sure you know what i think of them i'm thankful for everybody at "fast money," especially the people you don't see behind the

cameras. my final trade, devon energy, mel. >> ditto jeff mills >> i don't want to dumpster dive for grow stocks in 2023. i think there's a need for some people to do that dwgiven the moves we've seen lower amazon a quality stock i think you can buy. >> that does it for "fast money" this year. what an extraordinary year to be on the air don't go anywhere. "options action" for the year is up next.

right now on o.a., the notable moves in the options market in this final week of 202, from a ride sharing giant to an ev infrastructure play to the rise in the housing market plus, pick the time frame. one year, three year, five year, we'll break down a dow component that's been a dog for some time. can this pharmacy giant flip the script in 2023 finally, buffet to get on the banks before the banks kick off betting season i'm melissa lee. on the desk tonight, mike