to 4%. it seems like it could look like that chart has to consolidate and give breathing room for stocks. >> yeah. i i saw a stat that it hasn't closed above 4% in a while. >> and it only did it a handful of times for this run. >> we'll see you tomorrow. the first last word of 2023. and have a great evening "fast money" begins now. and right now on the first "fast money" of the new year, apple getting off to a rotten start. dragging the major averages down with it. apple is struggling. we'll explain. plus new year and same struggle for tesla now trading below $110 a share with the stock cut in half in just about a month is it time to give tesla a second look. and later on, rolling the dice on stocks, fin tech and big oil players are ready to spend some

money state side i'll brian sullivan in tonight for melissa lee. good to have you on. this is "fast money" live from the nasdaq market site on your desk tonight, tim, karen, dan, and guy adami. happy new year >> and clap for new year. >> [ applause >> let's start tonight with apple. that is a golf clap there. with nearly 4% drop today. apple is fallen back below a $2 trillion market cap what does that mean? these are big numbers. for some perspective, the stock briefly hit a $3 trillion mark one year ago apple of course not the oath condition feeling the pain today. major indexes all closed in the red despite beginning the day higher and nasdaq leading the losses, losing at the end of the day, three quarters of 1% guy. >> yes. >> apple, let's break down, i think technically it seems to be

breaking down in a lot of ways will it continue to pull the market lower or will it turn things around. >> if you watched "fast money" the last year. >> 5:00 p.m. eastern. >> every night. >> and if we make it to the eighth of january, it is 16 years. >> but tim have said 125, it has to go there and here we are at the 125 level. and at least now you could make a compelling case on valuation probably trades at a market multiple but the move makes sen sense. if you didn't know it was apple, declining margins, a -- something that they sell that is a high-end product in an environment where they're not immune to the headwinds everybody else is facing, what happens to the stock you say it goes lower and here we are and go back to the fourth quarter, we said it then that was not a great quarter by apple standards. the market rewarded them but

they shouldn't have and here we are at level that's start to make sense and for the broader market, this is what you want to see. you want to see apple give it up a little bit. >> and apple's under-performance going into this, i think it is 17% over the last 18 sessions or so and if you go back to -- and that what -- if you go back to earnings and where they had that intraday high on the day after, it is closer to 22% and it is been gross underperforming and the s&p is down 40 bips and the qqq is down 50 bips today. and if you look back on '22, it was a multiple and we didn't have the eps cuts, i think we'll get that apple, that is all we've done. is crush the multiple down today's catalyst, a big move was again some statements out of the niki that have been cut for

phone and mac and wearables. and you look at charts, 80 was a pre-covid level. 55, and 52 and 50 even in october of 2019 before they actually started to show you some services revenue which is why the stock rerated. but any way, i think apple goes lower. >> forward p.e., karen, to begin the year is about 29 and it is about 20 now is that enticing enough of a valuation for you? >> well i'm long so if you went long, then it is the same as buying -- >> you're going longer. >> i haven't yet i just want to say kudos to these guys because they were talking 125 is where it was headed and this is a while ago if we look back, we see in june of 2022, during that big downturn, it is lower than that right now. so that is concerning for sure i just, i stick with the fundamental thesis of being a

premium company with a premium valuation, which they have i don't know where it could go guy and i were looking at the downside the 110 puts that get you january earnings were actually only 2.25. which i thought was maybe too cheap to sell naked puts it is not really my think. >> is this "options action." >> it is friday night at 5:30. >> where is mike khouw. >> all that being said, it is a bit of no-man's-land, i'm not adding here. >> and dan, same question to you, enticing enough >> well i think tim made the right point. this stock is expected earnings and sales for this year, that we're in fiscal 2023 here, for apple was always mid single-digits. so it started trading about 27 times here is the estimates that haven't changed that much. and we were talking about this before in 2019, the first week of the year, this came after a very

difficult q4 in 2018 and the stm was down 20% and there was a global growth scare specifically in china and apple warned about kl china on the second day of the year and they proannounce and it gapped lower and it had a peak to trough decline. it was about three years ago, four years ago here we are now, the stock is in a bit of a fall. it acted much better than the nasdaq in many of the mega cap peers. and i think if you got that sort of move down to 110 or below it, i would be really hard pressed to see this stock any time soon below $100 unless we're in a market crash and to be very frank with you. because they have the monopoly and the moats and the balance sheet and ios users all over the world. think about the biggest mega trends in the next five to ten years in ai and vr and they're working on all of this stuff

with a billion and a half users and if you get it below $110, you want to start dollar cost averages there. >> doesn't this feel like the changing the guard the structure of the market just isn't the same structure we had for the last three or four years. so 7% of the s&p, that is part of it. but it is just that -- the six stocks that were 25% of the s&p, real economy, picking up steam and again i don't -- that is what today felt like to me it punctuated. we'll talk about tesla, same thing. >> rerating makes sense. absolutely makes sense but if you want to talk tail risk, because i think there is tail risk, god forbid something happened between china and taiwan, what does apple do to me they set the precedent with russia/ukraine. russia is not a big deal for them china is and they would be forced to do something and then things get nasty on the apple front

there is probably 10%, 15% chance of that happening but that is something you have to consider in this environment. >> but the other side of that, guy, they have so much cash. at some point they're going to come back. >> it has dwindled still $50 billion. they could come in with a buyback. employees will demand something i would imagine. >> well they've been doing buybacks for years now you get to the dwindling cash. they did a fantastic job of issuing debt at close to zero. it rounds to zero. so, that is cheap money that they have. i don't think that is enough any more agree with tim, i think there is a changing of the guard here with tesla and with apple and pretty much all of the faangs. >> but that is a bear market thing. i think it was dan of third point tweeted out if you're holding on, i think if he said with rosaries that led in the loft bull market to lead us into the next one, then you are

probably doing it wrong in some way, shape or form that is what he said so the stuff that got us to the highs in 2020, the stuff that outperformed in the last bull market until the top last year is is not going to be the stuff -- i disagree with that if you think about the weighting. if we do have a reflation trade and we see industrials and we see some other health care outperformed but that is not a big leader i think energy is not going to be the contributor that it had been over the last year and a half i don't see us coming out of whatever bear we're in and however long it takes to come out of it, is those names, trillion dollars names not being a big part of the leadership think of the structure they have a disproportionate amount of the weight of those two indices. >> i could agree with that and i don't know what the answer is and who will replace them but i look at a world where the reason you piled into mega cap tech is you got decent growth where

interest rates were zero and the interest rates are 5% or going up to 5% the terminal rate,i even though they went down, the terminal rate went a little bit higher today. and this gets into the put pell. what are we paying for the stocks i get when we paid 24 times for apple at a particular point. i don't know why we're paying 21 times trailing and again this is a world where they think they will do next year. >> and one of the big overhangs has been some sort of regulation in breaking up the companies and we've could make the case that amazon would be more valuable if the company was broken up. so i guess to me, while you invest in those companies and why they were such a disproportionate amount, they were s-- they were perceived safe >> i don't see that changing in the next couple of years. >> i would like to think this is an educational, it is not just

entertaining >> trade school. >> and apple was a $91 stock when the pandemic hit. it is still $30 plus a share above that level and history is littered with investors, karen, who have gotten their you know whats ha handed to them because they bought what worked in the past and fell in love with the stock, not the company. and i'm not saying that is apple, but you get where i'm going. it is gone down so it must go back up. that is the equivalent of my initials >> b.s >> i just couldn't say it. >> now i get it. >> a couple of things happens. so many of the stocks never, never should have been where they are, right. so i think for many of them, there is no hope to getting back to where they were within the next -- >> many of them. >> yeah. i think that is the case certainly the high-flying tech ones, many of them, even i look on the discretionary side, rh at $600 a share, $700 a share

that seems crazy to me netflix, which i do own. $650, $700 a share i think they're very far off from that. so when money is free, the multiples are infinite, but i don't think we'll get back there. >> snowflake as well which is not an insignificant company. look at where that was should have never been there but i think they would acknowledge that look at where it is now. in the heyday of this market, we're talking about the next company to get to a trillion dollars market cap, in the last week amazon lost a trillion dollars of market cap when it made the new multi-year low and apple is on the verge of doing that that again, it stinks, but it is a great sign of at least there is an end in sight. >> and insult apple at your own risk on twitter. i'll tell you that but it tells you the emotion behind this stock. and today is the one year anniversary of the all-time high in the s&p it is only one year. i know it feels longer and that

is another reason why we remain bearish. >> that was passed a year and a half ago to tesla. you could say whatever you want about apple on twitter and once that tesla thing started happening, that is where you knew that was biggest bubble in the stock market and i know we're going to talk about it it still gets you in trouble with the bulls if you want to say i told you so. >> $10 million marked out of the u.s. equity market last year even for guy, that is a large number the next guest may be a certain long-term buying opportunity let's combine the markets and the fed and some school named georgetown paul mccully is now teaching at aforementioned georgetown and joins us now on the "fast" line and chomping at the bit to get in on this conversation, paul. tim seymour, i had terminal rate and he's referencing it going

up how closely connect it the federal reserve money supply and the ability of stocks to go up, how connected are those things >> i think the connections are a whole lot closer to the policy rate than the money supply per se i think the money supply slowing down and actually going down is reflecting a slowdown in overall demand for credit, leverage and so forth. so the big issue for me is the policy rate and then, two, how does the yield curve respond to it so i think we're almost finished the tightening process it is eej a little bit below 5 or above 5 but i think we put in the highs for the yield curve is inverted and it is time to think in terms of yes, i pivot, not in the distant future but probably by the middle of the year >> okay. agreed and i think the debate over rates going up is probably over

or really darn close to it, paul so let's define pivot. by the way, maybe our wordle starting word tomorrow there is two pivots. there is the pivot to cutting rates with the fed and then there is the pivot to not raising them but not lowering them and keeping the rate and the rate and everything high for a lot longer than many people expect which one would you be looking for? >> well actually you'll have -- a stock that they could reverse and cut. so you have a pause, then a pivot. two p's if you will. and i think this will not be that far apart and i think that the pause will be the catalyst for renewed risk appetite and then the pivot will be the turbocharger. >> all right so you heard our debate between equity markets and rates i'll go back to my first

question, paul if the fed stays where they are for a while, is tech toast for a while? for the same length of time? >> i'm not sure. because the fed can find a plateau and tell us that they're going to stay there for a while. but i don't think the yield curve necessarily will be singing in harmony i think it will become even more inverted as the fed finished this tightening process. and i would suggest that growth stocks in the market for broadly is going to be key to what is going on in the five and seven and ten-year part of the curve and in that portion of the curve could maintain and -- itself and have lower rates, then you just have a higher inverted yield curve, but the equity market could get a grip >> hey, paul, it is karen,

thanks for being on and happy new year could you tell me in your thesis, what do you think inflation has to be at to allow the fed to pause and pivot >> i don't think it is a level, i think it is manifestly going down, disinflating across a broad spectrum and chair powell has already effectively told us this in the sense that we've seen goods starting to disinflate and some places deflate and seeing the housing market do the same and the third bucket from mr. powell is services away from housing and he looks at that being driven by the tight labor market and wages and that is the last thing that has to crack uncle and when it does, then the fed is finished and this nightmare of '22 will very much be in the rearview mirror. >> and we'll leave it there. paul, but we talking about it

the other night. i don't know how you cut wages without mass layoffs because once you give somebody a raise, you don't pull it back we'll get you back on to talk more about it. paul mccully, thank you. happy new year. coming up, paypal popping after putting in the worst year ever last year but that was last year when paypal be a winner this year. also oil prices down two of the biggest u.s. oil companies saying they may be done with international but they're bringing more money home we'll get the trade and talk it when "fast money" returns. at adp, we use data-driven insights to design solutions to help you manage payroll, benefits, and hr today, so you can have more success tomorrow. ♪ one thing leads to another, yeah, yeah ♪ lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”.

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with a partner that always puts you first. godaddy. tools and support for every small business first. well, we fell in love through gaming. but now the internet lags and it throws the whole thing off. when did you first discover this lag? i signed us up for t-mobile home internet. ugh! but, we found other interests. i guess we have. [both] finch! let's go! oh yeah! it's not the same. what could you do to solve the problem? we could get xfinity? that's actually super adult of you to suggest. i can't wait to squad up. i love it when you talk nerdy to me. guy, guys, guys, we're still in session. and i don't know what the heck you're talking about.

if i'm on the show, you know we're going to talk oil prices i'm sorry. that is the deal i don't get paid extra to do this oil prices sliding about 3.8%. insert worry here. slowing demand and fears of recession and the weather is good too much oil and natural gas down because it is 60 degrees in new york 70 degrees in europe no one is using natural gas for anything meantime, exxon-mobil and chevron are laggards today but there was news

two largest oil companies pulling back from international project, but that could be good news here because both companies plan to boost spending in the states all of this is chevron comes off the best year for the stock since 1980 when brian downing was playing catcher for the california angels. >> i said that. >> you said '81. >> boon. >> and ed ott. >> exxon-mobil has the best year ever, but dan nathan, you said i don't think energy is going to be the leader that it is this year are you negative on it or is it just not going to have -- >> in 2022 it was a dismillion year so i think fact set has said that they see that contribution trailing off in q2 into q3. and so to me i think you appreciate the outperformance thats stock has had relative to the commodity. the commodity does act like

we're in a global recession this year. >> dan, we're at 80. we're not at 8. >> okay. we're at 52-week lows essentially after that big rally we just bounced off of it and you saw the nat gas, for commodities, a year ago now we've round tripped the whole thing and now contending with the potential for a recession here and potential for a recession in europe and then we also have a china that has come back online. it doesn't feel back online. it won't feel back online for months. >> it will take some months. but -- >> there is pressure on the oil companies to bring it home let's be clear exxon been i lived in russia, exxon was in sacka lien and plays out there for a long time. and they're drilling holes, not necessarily those holes, but a lot of holes to nowhere and the difference from the oil companies is that they are so much more efficient. chevron had cut the capex so some of the increasing spending is fine but it is about

companies that are free cash flow jennerive and $120 oil is not good for the oil companies we've seen this over and over again. at $45 oil, exxon pays the dividend when they got kicked out of the dow, we were worried they weren't paying the dividend. as long as they're paying down debt, they're fine. >> and guy, you have been many of the new names, the new name for slb formerly known as schlumberger congratulations, oil was $60 a bail five years ago. before we even heard about pandemics or whatever. and if i could have gone then and said to the ceo of chevron or exxon, oil is about $75 to $80. >> they would have been like great. >> sign me up. >> and now we're be moaning $80

oil. >> folks at home are saying why are they talking about -- >> i'm still wounded from this go ahead. >> dan is 100% correct in so much as crude has collapsed, the commodity. from 130 to 75, if that was anything else you would say it collapsed. if it was a stock -- >> or i should have never been in at 130. >> that is where all of the $250 targets. you probably had analysts on your show all of the time. >> 250 was like -- >> a $200 target. >> if everything went terrible. >> where is the extra supply >> let me ask -- >> where is the supply coming from. >> it feels more like 420 from that -- >> i have a question okay i don't have the answer. what if -- if peace were to break out tomorrow in ukraine, right, and the ukraine situation were resolved, where would oil go that supply. >> it would drop $10 a barrel and that would be it because

there is no new oil coming online opec does not get along and we have not invested in this country in a long time that is the whole point. i don't see a lot of supply coming out of anywhere china has gone back online we're not counting china demand. i think oil price goes higher even though that is not why we're investing in chevron. >> if crude were to go sideways for the next year in a benign equity market, i think these equities are still cheap exxon-mobil had a high a couple of weeks ago and hasn't traded horribly and oih still around $290 things are hanging in there. i like energy here. >> and you're not going to have the year you had last year that would be impossible to consider you're going to get a doubling in occidental again. >> and you're not signing otani. >> hold on the next opec meeting is june 4th but opec, they resevenrve t

right to meet whenever they want i wouldn't be surprised to hear some rumblings speaking of oil and stocks, we, meaning me, will be live in miami on thursday for the goldman sachs energy and clean tech conference all day on thursday some of our guests include the ceo of chesapeake, the ceo of sun run, the ceo of chenier and the ceo of pioneer natural resources. that is all day long we won't tell you when the interviews are, so you have to watch all day long it is a tough gig but somebody has to do it there is more "fast" to come. >> paypal ringing in the new year with a huge rally one wall street analyst sees more than 20% upside ahead should old acquaintance be for got or is this a red hot buy here we'll discuss next. plus tesla shares hitting the skids to kick off the year but at what point do you

consider it a buy? those details are ahead. you're watching "fast money," live from the nasdaq market site in times square. 'rback right after this. siness . it is just right for my little business. (woman 2) we switched, too. (woman 1) unlimited premium data, unlimited hotspot data. my point of sale is on point. (woman 2) you know it's from the most reliable 5g network in america? (woman 1) you know you can get up to 10 times the speed at no extra cost? (vo) when it comes to your business, not all bars are created equal. so switch to verizon, the most reliable 5g network in america, and get the unlimited plan that your business deserves. on the network america relies on.

welcome back to f"fast. and we have some breaking news on the vote for the speaker of the house. elon >> well the house is now adjourned for the evening after failing to elect a new speaker of the house california republican kevin mccarthy was unable to muster the 218 votes that he needs in order to secure the position in fact, opposition to him grew after three rounds of voting with 20 gop lawmakers opposing

him in that latest round now republicans are hoping that this break in voting will allow them time to perhaps reach some sort of deal that would allow them to move forward with someone to lead their party in the next congress. but as of now, the house adjourning for the evening with no new speaker elected brian. >> a big day thank you very much. let's get back to th the beaten up stock gaining about 5% a rare up day. it was a bullish call on paypal from truist. they see the potential for the pal to beat earnings estimates this year and next it was not just paypal shares of block, not h&r, the weapon formerly known as square, upgraded and saying that block should see groaning earnings and margins this year. dan, a take on either of those calls. >> could i do both >> sure. >> on paypal, expectations after the year, down 80%, i think expecting 15% earnings growth

and 9% sales growth. flattish margins and they like the balance sheet and the ability for them to acquire. i like this call i can't tell you that the stock is done going down but from a value standpoint, it is great. on the flip side of that, square, this stock is well below the pay poll, it is covid lows square is still well above the covid lows i don't like it. and paypal could make acquisitions, if anything square or block, whether they bought that company after-pay in 2021, that was it. the buy now and pay later. i don't have any trust in the company right now. >> you see it on the checkout and the stock could not get out of its own way maybe a lesson there coming up, what a difference a year makes mortgage rates, but can home buyers, will they adjust to the new normal of 6% or 7% mortgages. and diana is coming up. and yes, we'll talk tesla.

it missed the mark on deliveries shares down 12%. at what point is tesla worth your money we'll talk about it coming up. >> announcer: get your prad trades to go with a "fast money" podcast. follow today on your favorite podcasting app we're back right after this.

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welcome back hope you're having a good tuesday. happy trading new year not so happy for the markets get another check. don't commit the messenger stocks kicked off the year like last year. which is in the red. the nasdaq was off .7% and the dow down 10 points and we'll call that a win. they tried to stage a late-day come back but could not. and meta platforms formerly known as facebook among the few winners. that the right, meta was up 3.6% coming off its worst ever year since going public a decade ago. chinese internet stocks, the k web was up like billy billy and

pin duo duo. >> you just wanted to say that. >> wanted to see if i could. i tried. on the down side there is a company called tesla they make cars and that stock fell another 12% today. they did not sell as many cars as people hoped them to. missed delivery numbers. the electric automaker just over 405,000 cars last quarter compared to expectations of more than 430,000 the biggest drop since september of 2020 and the lowest close since august of this year. for more on ther road ahead is c c cnbc contributor tim floud and we point to elon musk's reputational damage. is there any way that there is one thing or rank the things that are the most wrong with tesla right now. >> well today, it is probably

more about the expectation game. remember it was elon last year talking about he thought sales could increase by 60% at one point. then it was 50%. and then just a few months ago it was just under that 50% and when it comes in at 40%, that is a number way lower than a lot of people were thinking for this period. >> you know, there is also just the matter of competition, tim is there not a few years ago, yeah, you could order a rivian or maybe there was gm volt or bolt or whatever they called it back then now everybody has got electric cars and i'm reading car and driver and i'm reading you and dan o'neill and road and track, and there is a lot of electric cars getting a lot of love from the critics that are not called tesss. >> absolutely. and this year is even more difficult as the tax breaks are going to be hitting in the u.s. encouraging for people that look at an ev, to try an ev and unfortunately for tesla they're not as robust for the tesla

offering as some were hoping for because of the pricing for those vehicles and the way they were judged to be in the categories that they are. so investors are disappointed at those new numbers that we're seeing as they face that more competition. now their vehicles might be too pricey for some. >> we talked about china the quote, reopening i hate that term, but china is a massive market for tesla tim, if china, quote, reopens, are we going to see tesla's fortune turn around, maybe not a stock perspective, but maybe a car perspective. >> a hot market is china is good for tesla. tesla could benefit greatly from that it has benefited greatly in the last few years from china. there is enthusiasm for the brand. so yes, a reopening of china is positive for tesla going forward and it also helped with production if they could get past some of the covid concerns and help smooth out things those are all up-signed for tesla and elon.

>> part of the pain in the stock i think is a lack of trust in the company. and you look at the delivery numbers, i'm curious your thought and there is speculation out there that of the 411, only 300 of that were new orders and the problem is we don't have the data or the transparency in this company to understand what is what >> coming at end of the month, i think we'll get some of the regulatory filings, i think people are looking at that your hitting -- that is one of the issues with tess the last few months, is just attorney about the communication to the market we've heard from investors unhappy with elon ass he's been distracted at twitter and how are they responding to the possible recession and this is an issue with communication and trust and where the company is at this point which is why you're signaling an investor day in early march to try to clear some things up. >> tim higgins of the "wall street journal," thank you very much

tim seymour and everybody, let's talk about this. i mean, what do you think is the biggest problem with the stock, tim? >> reputational issues >> i have to laugh that we're talking about, you know, car company issues we're not talking about this tech company and this mumbo jumbo that was -- i quote my friend sy jacobs being wrong tesla is so 2020 i was three years early and wrong so i was very wrong. but my problem was this is a car company. we need to value it like a car company and the competitive landscape and also the accounting they solved the balance sheet issue three years ago, i don't think they've not solved the multiple. >> comparing it to the peak number, which is so absurd it wasn't bound by any gravitational pull of -- of finance. it didn't matter

they we they were just growing forever and competition would never matter and that is so it is here it is still -- >> competition matters. >> to that point it is still a $340 billion market cap down 70% and i would say china is the issue today. and here is the thing. we've talked about this on the desk for months and months now, we just spent time talking about china, they have less than 10% market share in evs. there is a lot of competitive like local competitors in china that might have a leg up >> some are coming here by the way, and i'm going to hand the baton to guy if there is any geopolitical issues, the stuff with china is only heating up and elon has been tweeting about conspiracies, he doesn't talk about those, free speech, because china is really important to them. it is not that big of a market and it is declining. >> in terms of metrics, quickly, tesla is still trading close to two times revenue.

ford, for example, trades at about 38% of their revenue so something has got to give ford should be higher but tess could still go a lot lower in my opinion. >> can go lower. >> $69 price target right there. >> coming up one options trade ser making a whale-size wager on this gaming stock and there is your chart. they have a big bet on the stock. who is it? it is not frank or brian downing. we're back right after this. it's getting a discount on your trip, plus points for your future travels. so you can think about the next trip. and the next trip and the next next trip. so wherever you go, you'll know you're getting the most out of your travels and you can keep thinking, “where next?”

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welcome back to "fast money. shares of wynn resorts are up today. wells fargo upgrades the stock to overweight, raised the price target by 36%. the analysts writing that wynn has a path to recapturing the pre-pandemic ebidta level and that is not reflecting in the current stock price. but the big options money is betting that a different name in the casino world could be about to cash in mike khouw joining us now with the "options action. mike >> the action was in melco resorts and the most active trade was seen in the january 14

calls. we saw a purchase of 50,000 of those for 33 cents or just under 3% of the current stock price. the buyer of those calls obviously betting that there is considerable upside between now and january expiration which is less than three weeks away >> mike khouw on melco thank you very much. i think about melissa lee. because you call her mel so i think mel co it is a name you have talked about. >> i'm long. >> what makes it more attractive than the other ones? >> it is a two brain cell trade and nothing is that easy so i'm cautious when i say it, but it is about the casinos recommission and then china which at some point we knew had to reopen. the fact that that wynn upgrade is getting back to 2019 ebidta levels tells you these stocks traded down two-thirds of the former ebidta and half of it was licensed concessions for those

that have reliance on asia and half was what was going on in china. >> jp morgan updated mel c and wynn i think wells fargo today, wynn on valuation, we've talked about this for a while, it is still too cheap. it will get there earlier -- >> there is a lot of hidden value in the massachusetts property for wynn. >> did you go? >> i have not. >> long mel or sully >> it is a pairs trade >> along that. >> you can't do that that is not right. >> i don't care. what do i -- >> we're long sully every day you're here. >> that is what i like frank, you're the fred lynn of "fast money. >> somebody had to be. >> but any position and you excel? >> no, that is joe mceuen. >> super joe. >> that is it. none of them were bobby given but i digress.

for more "options action," tune in on friday at 5:30 p.m. eastern time coming up, would-be home buyers and will the severals come down in price diana olick up with the push-pull happening in the housing market right now stick around

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so let's go. the digital age is waiting. welcome back we don't need to tell you this, but we're going to any way mortgage rates more than doubled last year. they could be headed even higher this year. it depends on the bond market. is so if you're a potential home buyer, do you get used to this new normal diana olick, what is the new normal >> well the new normal is higher rates. the mortgage rates did drop back in november and early december but they ended 2022 on a high note the average rate on the 30-year fixed had swung nearly a full percentage point lower from around 7.25 to 6.25 but by new year's eve it was back over 6.5 again. so the buyer, tote's mortgage rate translated into $2,100 without taxes or insurance which is a 63% increase from

last year. now on the bright side, there is much more housing supply 47% more than a year ago at the end of november. still slightly below the historical average but it is translating into a slower less competitive market now the home bield builders have been pulling back and you see the home building etf is around 20% for the year-over-year and last june when rates first went over 7%. so the big question you ask, what about the spring market which isn't that far away. are buyers significantly -- sufficiently used to higher rates and will lower prices now entice them back into the market prices have fallen 2.5% since june and while they are still higher than a year ago, that may be not -- not the case come spring again you ask is it a new normal in maybe once we get used to the 6s and get used to the 7s, i'm not sure.

>> there are two type of home sellers, people that have lived in a home, 15, 20 years and they have a lot of equity they could come down in price and then you have people that pot a house in the last two or three or four years maybe took an equity line to put in a new kitchen. they can't lower they're price. >> and it is been in the house a long time, you've refied a lot and you probably have a rate around 2.75% so you may have a lot of equity. you want to move and buy somewhere else do you want to trade your 3% mortgage for a 6.5% mortgage rate probably not but if prices start to come down and buyers start to come out again and start maybe bidding, it is back and forth how desperate are you to sell. do you need to sell or wait it out. we are hoping more sellers come on to the market because right now what is on the market is sitting a long time. >> it is like infested with scorpions or something like that diana olick, thank you very much there is a reason. my apartment is in fested with

coup wallas. >> and you brought along a chart. >> i was thinking about the mortgage rates, over the last 50 years and we think we have the chart. there it is. so we have this idea ma mortgages have just gone berserk and if you look at the average over the 50 years it is 7.75% which is higher than where we are now. so i think we need to reach an e equilibriumand then we'll star to see more transactions so i'm not so bearish. i think it will take some time. >> not so bearish, is not bullish. are you bullish? >> it is like the energy market. it is a supply thing there is no real supply out there. look at dhi, this time last year effectively, $108 stock, all-time high. you think this must be cut in half no, it is trading $90. it is trading really well. the home builder stocks have

priced so much nonsense in i think they're worth looking at here. >> the fly in the ointment is where rates are going. i'm not going to tell you they're going to 5% but i'm not sure they're going to 3% the yield curve targeting is over and european yields and if the rest of the world's rates are going higher, are our rates going to go down, i'm not sure. >> if you have to move, you have to buy a house or rent at a high rate, too. next up, your final trade.

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first final trade of the year tim seymour, kick it off. >> safest pick, united health. they just had nir investor day a month back like this one. >> karen. >> hyg short >> this might surprise you, i wasn't active last week but the first thingdy this morning was buy puts >> guy >> you're missing some --

[ inaudible ]. who came over with nielson who was the better player. great to have you. have a safe trip to miami tomorrow casino's work. las vegas sands. >> two words high and lie i'll see you there thanks for watching "fast money. my mission is simple, to make you money i'm here to level the playing fieldinvestors there's always a bull market somewhere and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to cramerica other people want to make friends, i want to make you money. my job is not just to entertain but educate and teach call me or tweet me @jimcramer. out with the old

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