stocks we will see what the real run rate is. i think it's a good reveal, at least for the moment, that everyone is not very upbeat. all of a sudden the market has not been delusional in deciding everything will break okay s&p flat the past six months >> next week will and the mcro. that does it for overtime. "fast money" starts right now. >> right now on fast, ending on a high snnote rates could be pretty close to the right level to get inflation under control. coming up, we'll dive into the market's next move plus, we've got pharma, defense, transportation, and a once mighty electric company on our list later, goldman's less than golden week from an earnings disaster to a slumping stock reports of a probe by the federal reserve. i'm melissa lee. this is "fast money. we're live at the nasdaq

mark marketsite we start off with a fed fueled late day rally the s&p climbing nearly 2%, closing around its highs of the day. the dow up more than 33 points. the nasdaq surging more than 2.5% those gains helping the tech-heavy index notch its third straight week in the green the rally coming after fed governor christopher waller says he favors a quarter-point rate hike at the central bank's next meeting. he added we may be, quote, pretty close to where rates are sufficiently restrictive to control inflation. so does this erase any doubt the markets may have had over the fed's path forward dan, what was the rally all about? >> i think that's really interesting. i think it was pretty much the consensus. nearly 100% probability there was going to be a 25 basis point hike i think what's interesting about the setup, we had really bad sentiment after a really bad year of returns.

we had the dollar coming off we had the vix going below 20. all of these things are a great ingredient for stocks, especially this early in the year that doesn't make me bullish it doesn't make me want to chase a lot of the stuff a lot of the stuff that i think has rallied 10%, 20%, 30%, i think are not really high quality things i think they are things that are going to do badly in a high rate environment. just because we have governs telling us we may be close to done raising the fed rate, that doesn't mean this tightening economic activity we've had on the monetary side is not going to weigh on growth and valuation. i just think let's get another week or two of earnings in the tank here and see what these companies have to say before we want to chase things too far. >> we don't have the full effect of the fed rate hikes yet. we don't have the full effect of qt quite yet either. at the same time, if we are close to sufficiently restrictive, we're closing to starting that period of higher for longer this area right here doesn't seem so bad for the markets.

>> correct yeah, and i do think you made a lot of really good points here what the markets want to see is the fed saying they're going to stop raising interest rates. it is a good point that doesn't necessarily mean rates are coming down. this higher for longer environment is still going to weigh on things like your gross sectors. you want to make sure you're being strategic about where you're investing this year this is a great seen ign, but b careful where you're investing. >> take a look at netflix and the surprise it delivered last night. take a look at alphabet, announcing it's going to cut a bunch of jobs, and the stock rallied on the back of that news maybe companies are actually right-sizing in terms of spending, in terms of head count for this environment and if this environment is the environment that will stick around for a while because we are close to sufficiently restrictive, maybe things aren't so bad for growth. >> i think part of that is true. i've been talking about that

quality growth trade for a while. i've clearly been early. going back to my fame trade, i have amazon and meta in there. i think that's part of the story. i think these layoffs are probably priced in, so you have these companies with high free cash flow. they're nicely profitable. i think those are companies that could actually surprise some people this year but back to the fed, i still think we're whether kind of close depends on what your definition is. i still think we get a few more 25 basis rate hikes. then you stay there for a while. you this is something powell mentioned specifically as something they're watching but the market and the fed continue to get further and further apart relative to the path of rates in the second half of the year. so i think that could be a potential challenge. and lastly, i think this setup coming into this earnings season, i think dan and i agree, maybe just saying it a different way. i think it's somewhat

challenging. you had that vix kind of fall off a cliff down to 17, 18, sort of the lowest level since the beginning of last year then you had a lot of really big rallies. it's not just the s&p, but you had banks and semis and some of these retail names look at nordstrom. macy's up almost 60% since the october low. all of this is into technical resistance when you're finally starting to see a down shift in demand in some of these earnings report i'll quickly mention p and g that's what's driving a lot of these earnings still i think that comes off over the next couple quarters. >> so, grasso, what is your take as jeff had mentioned, the setup gets more difficult the more the markets churn higher here we are on the precipice of the biggest couple of weeks of earnings season. >> yeah. so let's take you back from today. today we closed above the 200-day moving average in the s&p. so let's see if that's not just the blink of an eye because

that's what it's been in the recent past. the other thing is where dan started out, earnings. if you look at whether it's going to be a soft or a hard landing, we need to know how the earnings actually reflect that one way or another netflix gave the bulls a little bit of a tailwind today. the question closer to pausing or -- i guess i shouldn't say pausing, right i guess lowering it from 50 to 25 basis points. but you know the sick thing about the market is the market will read that pause or that coming down from 50 to 25 as they're closer to cutting. and whether or not you say, okay, it's going to be higher for longer, the truth is we are, the longer we get in this cycle, we are actually closer to cutting no matter how you feel about the market and the market always prices in the future the market's always six to eight months ahead

so i don't think we're out of the woods yet. i think if earnings start to get slammed, the market falls out of bed. but what i do think is that we're making investors feel a lot more comfortable with their higher growth names. and as long as they continue to cut jobs and as long as they continue to prepare for a slower market, that might give the bulls and investors a little bit of a respite from the onslaught that we've seen recently. >> all right we've got to get now to the latest developments on the tesla shareholder lawsuit against elon musk and his funding secure tweet. musk taking the stand in san francisco within the last hour but now paused until monday. let's get to steve kovacs who's been following all this. >> mel, musk gave about 30 minutes of stand and he'll be back on the stand monday so far a lot of questions from the attorneys for the investors' side, they asked him, do you understand the nature of your tweets and the impact your tweets can have on markets

they asked him about the funding secure tweet when you tweet something like that, do you understand that can cause the prices to move and musk said, not really. there's not necessarily a correlation according to him he thinks, for example, he pointed to that other famous tweet of his saying tesla's stock is too high. he said, when i tweeted that, you would expect it to go down, but actually the stock went up therefore, my tweets don't have any correlation to what the market does. but that's not what the lawyers are discussing here, mel they're asking him, do you understand that your tweets can move the markets, and that seems to be the contention so far. lawyers also asking him, do you recall several high-name investors, including ron barend telling you back in 2018, cool it on twitter, stop tweeting for a bit so we can get everything under control. remember, tesla was going through a tough time then. also of course he took a shot at short sellers, saying he believes short selling should be illegal. we'll have a lot more when he takes the stand again on monday. >> thanks, steve

pretty ironic line of questioning, you know, asking the owner of twitter now if he knows about the impacts that twitter can have on a stock price, dan. >> it's interesting. we've spent a lot of time talking about this it's a few years ago now it's amazing we're still talking about it it is ironic now that he owns the platform but this is about securities law and really about nothing else. he can say whatever he wants that is logical, his response to that lawyer's question but it's about securities law. he's already paid fines and that sort of stuff. to me, this is a bit of a s sideshow here, but it might set some precedent as he owns this thing. >> let's get more on where tesla's stock is going carter >> let's jump right in first of all, great job by graphics shout-out to cnbc department this is a fantastic instance of what you want to see, which is high, low, and close daily bar charts there are no drawings, no annotations. let's put some in. first chart change what do we have?

we have a well-defined trend line, and that warrants putting in some circles. what do we know? we have just now moved above the trend line, which is to say deserves a green arrow keep that trend line in, and what do we have? we have all the elements of a miner head and shoulders bottom. hit the green arrow again. finally last way to draw the lines. you can call it a cup and handle it doesn't matter what you call it a reversal formation is a reversal formation so an important development. the low is 101 and change. it closed at 133 today, up about 30% from its low i think 155 plus/my us is in the cards. >> this is purely a tesla-specific story, correct, carter this is nothing to do with where you see the markets going over the same period. >> tesla is sinking when rates are going up, sinking when rates are going down sometimes a stock gets oversold or overbought and a counter trend move down or up is in the

cards. this counter trend move is well under way, and i think it continues. >> carter, thanks. grasso, what do you make of this chart? >> yeah, i love the chart. this is something where i saw the same level, but i saw -- he sees it a littlebit higher tha me i see it as 150 is very likely, and if i broaden that out, obviously technicals are, once you get over a certain level, then it's more likely to go in that same direction. i definitely see 150 i could be wrong, but that's what i see and then the follow-up with that would be 180 and then 200, and then you're closing that gap from this most recent slide. but the feeling has gotten so consensus-negative, that i think the market's set up to hurt the most amount of people at the same time and that's what's going on with tesla. >> it feels like the fundamental story caps the stock move higher we're going to hear more about how those price cuts will impact margins, will impact

profitability. it will be at a cost to some degree. >> i get the idea here that it is oversold. we could see a short term bounce here they're having demand issues right now, which i think is going to be longer term. we're talking about elon musk's tweets he had a tweet last year that said, i'm done selling tesla stock. now we found out he just sold a bunch more in december i think you're going to have those shorter term issues with this i think it's going to be overvalued coming up, with earnings season ramping up, it is more than just big tech on deck we'll play a game of trade it or fade it with some other major players. plus goldman's rough week. an investigation by the fed. more details ahead "fast money" is back in two. [music playing] ♪ imagine something of your very own. ♪

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welcome back to "fast money. earnings season is ramping up. next week isn't quite the busiest of the season but pretty close. big names like johnson & johnson, lockheed martin, and general electric out with results. we thought this would be a perfect time to play a little game of -- >> trade it or fade it >> that's right.

trade it or fade it, america's favorite game. let's kick things off with johnson & johnson. courtney, do you trade it or fade it? >> i would trade this. it does continue to look attractive with some of the drugs in their pipeline right now and what's expected to come out next year. i think you are seeing their consumer health business, they are spinning off later i think that's going to see some strong growth moving forward >> steve grasso. >> i'd fade this one, and they do have other drugs in the pipeline, but they're going to be facing some generic competition, which is going to crimp profits. the vaccine business, which they've had problems with, is now an international story, not a domestic story and there's absolutely zero to be positive on the stock when you look at the technicals it's below all of its moving averages currently i don't see really anything to be optimistic about. i'd be a fader of this one >> all right lockheed martin. jeff mills, trade it or fade it?

>> yeah, so i'd fade this one. i think last year was basically all tailwinds for defense names. you had lockheed outperforming by 50% or so the valuation is definitely not crazy even after that, but i just think a lot of the good news is known, and now you have some potential headwinds really no budget increases to defense spending between now and say 2024 maybe even some cuts probably not to defense but even the possibility of that, if that's on the table, could be an overhang for this stock. i just think generally if you look at stocks right now that are dependent on government spending, they've been lagging the s&p 500. my fear is that continues with a stock like lockheed, so i would fade it as it flirts with that 200-day moving average. >> dan, trade it or fade >> i'd trade this one. i think you probably have a shot back towards that 500 level that was the previous high here i think jeff makes a lot of great points it's just valuation. i think in this market, trying to find reasonable valuation with what i think are reasonable tailwinds.

the idea there's a headwind about companies that are dependent on government spending, i think that makes perfect sense here but to me, i like the value here i think this one makes sense. >> next up, general electric steve, trade it or fade it >> so this one i would trade but i would keep it on a tight stop, and i would look at the 50-day moving average of this one. it's a couple of dollars a little bit lower than where -- i'm sorry. the 200-day moving average, which is right at 75.61. it's a couple dollars lower than where it is currently. recently they spun off their health care unit and the stock cratered now it popped back above the 200-day moving average so i'm not so convicted with the trade it on this one, but i would use a very tight stop if you want to play it from the long side. >> jeff mills, trade or fade >> so i think we sort of agree i'm going to say fade it and a lot has to do with the price action that 70% move since the october

low, now being 26% above the 200-day. it failed at that previous support level, which was around 80 i think regardless of what you think of the business or the health care spin-off, i just think in the near term, it probably trades lower. then looking out a little bit further toward the end of the year, it's not historically a great performer during recessions, so i would just steer clear of this one. >> and boeing. dan, trade it or fade it. >> i'd fade this one it's had a huge move here. if you're going to start looking at this company on 2024 earnings and sales, i got to tell you they're still not back to their 2018 peak as far as consensus is concerned, as far as revenues are concerned. then their earnings, it's going to take them a whole heck of a lot of time to get back to that $16.5 number on 2024 earnings. i think it's kind of expensive, had a big run. i would not be a buyer. >> courtney. >> i would trade this. people are assuming it's not going to get back to where it was pre-pandemic but you're seeing business

travel, international travel is coming back. airlines are putting in orders because they need those fuel efficient planes i think it's very promising to see how much their free cash flow improved after large losses in 2021. i think they really have some room to one. >> we have time for a bonus round. it's your lucky day, folks j verizon, general mills, trade it or fade? >> i'm going to trade this one i think it's been sold to death. there's nice support around 37 it's got that 7% dividend yield. i think the risk/reward is good. solid free cash flow solid profitability. this one for at least a trade. >> there are only four days left to vote for your favorite 2023 acronym. are you vibing with courtney's picks? are you looking for fame with the general? we want to know. tslq the list goes on and on. all the choices on the home page you can pick your favorite three. you can vote more than once or

even twice, so i heard head on over to cnbc.com/fastmoney polls close at the end of our show tuesday, january 24th. coming up, goldman sachs' terrible, horrible, no good, very bad week. what is giving the bank the blues? the details next you're watching "fast money. back right after this. back when i had a working circulatory system, you had to give your right arm to find great talent. but with upwork, there's highly skilled talent

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welcome back to "fast money. goldman sachs shares dropping 2.5% today on a report that the federal reserve is investigating the bank's consumer business the central bank looking at whether the bank's marcus unit had proper safeguards as it ramped up consumer lending earlier in the week, goldman reported a major earnings miss,

in part because of the rapid expansion of its consumer arm. gold man the worst performing dow component. shares down 8% since tuesday jeff, what do you make of this news >> yeah, you know, i'm not a big fan of the banks i think we all know, so i won't beat that dead horse again i just think for goldman, this is yet another overhang, and i think after the earnings report, they probably bit off a little bit more than they can chew. so it's likely a year of retrenchment, i think. you probably see some balance sheet reduction, some expense cutting, maybe scaling back some of their offerings for the stock, i think it means it chops around for a while. so i don't think you can really get too excited about it until you get past some of those issues. >> it seems like the misstep into consumer banking was just made worse they went too far, too fast, courtney, and they may have done it to the point where it raises regulatory concerns. >> which is never something you want to hear with banks unfortunately. i think we are likely going to be in this higher for longer rates in 2023, which should

benefit a lot of the banks now when you have something like a goldman sachs and their consumer business isn't panning out, it's been a loss leader for them and they're likely going to have to make some cuts there this is not one of the banks i'd be touching. a large miss in earnings and then this news i don't think this is going to look good for them moving forward. >> grasso, we got a good look at the banks this week. so which one you like? >> well, the j in my just trade, melissa, happens to be jpmorgan. >> shameless plug. >> we can have a shameless plug with my acronym. we could also have a would you rather goldman sachs's chart doesn't look that appealing to me. when you look at the jpmorgan chart, it's bouncing right now or should be bouncing right around its 50-day moving average. it's 134-ish level as your support. you've heard me say it before. since the financial crisis, jpmorgan on every metric that you can overlay over a financial

has beaten every other financial company. so i would stay with that one. >> so your acronym is at 21%, so you're leading the pack so far today, grasso. it has been speculated around that you've got a lot of children and maybe they're all out in the back behind that door that's behind you. just voting, voting, voting. is that what's happening >> he's putting his thumb on the scale. >> i have a huge sicilian family, melissa. i can't confirm or deny that people are treating this like a video game at this point so keleese i've got a bunch of people with vowels at the end of their name that don't like to lose. >> final trade steve g steve? >> i'm going to go with visa visa looks like it's keeping that ascending trend line. i like the chart i like the company visa. >> mills

>> i'm glad this came to light i want a full investigation on grasso's -- on voting for sure but sell macy's. i think after the big run, you want to fade here. >> courtney? >> berkshire hathaway. we're talking a lot about growth, but i wouldn't get pulled into the growth trade here i like them. i think it's a good play. >> dan. >> yeah, american express. i'm a seller stick around for o.a i'm going to tell you how and why i'm going to do it. >> because dan's going to be on it tune in. that does it for us here on "fast. as we mentioned, "a.o." is up next he “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

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right now on "options action," the titans of tech are doing a whole lot of belt tightening, this as their earnings are right around the corner we'll drill down on the moves of microsoft and the growth trade coming up. plus, boeing's big run the aerospace giant as jumpeds nearly 50% in the last three months what is the options play for home gamers? feeling bullish on beijing a credit card play you might want to decline. and a look back at a name we said could stream higher i'm melissa lee. this is "options action. let's check out some of the