that's a lot. >> that's a lot, and so far it seems the consumer is being somewhat resilient, but what we've seen this week in terms of earnings is they're being selective about where they're spending and inflation does seem to be taking a dent in terms of how they're doling tout dollars. >> yeah, and this data is going to give not just the earnings, but also the data going to be key. that'll do it for "overtime. "fast money" -- >> begins right now. right now on "fast", pain on the street the s&p and nasdaq finishing their worst week since december as another read on inflation comes in, hotter than expected are stocks in danger of heading back to lows apple falling 4% we'll ask the chart master if he can tell us to the penny where it's headed from here. chart of the week, that's weak with a "a. it's a name last month we

enjoyed. it's now suffering as geopolitics takes center stage i'm in for melissa lee on the desk, mike khouw, jeff mills, and guy adami we're going to start we the rough end to a rough week. nasdaq leading losses. turning back negative for the month of february. s&p now down in five of the last six trading sessions and for the last three weeks in a row. the dow finished down 336 points today. off low bus notching fourth straight weekly loss it's closed the lowest of the year so far. the moves coming after yet another hot inflation report a defense preferred measure, the pce showing prices rose more than expect in the january, another reason the fed could keep its aggressive rate hikes uncurbed what should today's action tell you? guy. hire for longer. that's been the trade. >> yeah, and that's going to

continue to be the trade fist of all, best of luck with your new show. any show with you on it is must watch, number one. number two, jeff mills talked about this i'm sure they have on "options action" as well. the market for the week figured the fed's not messing around, and these numbers we saw today basically galvanized that. made sense the market went lower. you should take some solace we bounced off the 200-day moving average, but the market is finally lining up what suggested should be. >> also the ten-year did not break 4%, even though we did see yields surge the entire week across the curve. >> it's interesting of course because as far as the ten-year is concerned, in some ways if you saw a bit of a bounce there and that was consistent with economic growth, that's not the worst thing in the world so when you start seeing the two-year go up and the four year not so much, the ten-year not so

much, that's a problem that's telling us we have a conflation of two unhappy circumstances. the one is short-term inflation and the other is no or low long-term growth that's not a healthy recipe. one of the things i find interesting in all this is of course we want to think about the multiple the market should be trading at. when we start seeing higher rates, we expect that much toll come in a couple turns any way but you add to that that you've got higher capital costs we see a lot of this working its way through the sm i think you could start seeing meaningful s&p earnings decline. you put those two things together, lowering the "e" and pe, it's not a good recipe. >> you see a lot more downside. >> potentially, a lot more downside, yeah. >> jeff, do you agree? >> yeah, i do. it's something we have been talking about a long time. are we going to test the lows? something i go back and forth. but i hold conviction we're not going to see the old highs of

2021 i think we're stuck in neutral for a while. i agree with what mike said. we have been in this condition most of the year where you had the losers from last year outperforming, and you're starting to see that unwind. s&p high beta is now down 10% from the recent highs. s&p low beta is down 3.5%. you're starting to see the market complex revert back to what we saw last year at the individual stock level we're seeing it too. look at merck. year to date it's lagging but relative performance is higher i think that's what the market is going to look like going forward more so than the first two months of the year last thing i'll say relative to mike's comments is we were also in this position where credit spreads were actually tightening as earnings expectations continued to come down that's extremely unusual and, in my opinion, not necessarily sustainable. so i do think reality is starting to set in i do think the idea that higher interest rates probably mean lower pes, and that's what was

driving the market all year. there was finally competition for stock. i think there's $1.8 trillion in various money market funds i think that's a historic high money is flowing out of the market into these other assets i don't think that's temporary, and i think that leave us in the place we are today. >> 12-month yield is above 5%. i should have noted. it's a short-term move guy, the surprise, what nobody expected this year was for the economy to accelerate in the month of january the surprise is that inflation is now accelerating and has reversed and moved higher, if you look at the core pce, it was on this nice downtrend the past few months how does that readjust how you should think about the market and earnings for the rest of year >> if you watch this show, i don't think it's that surprising that inflation is rearing its ugly head once again i think you know, sarah, i'm no fan of the federal reserve at

all, but i will tell you their messaging for the last six to nine months has been outstanding. the market's chosen not to li listen, but they're trying to get ahead of this thing and the fact that inflation is reaccelerating makes sense that genie is hard to butt back in the bottle. what are you willing to pay for a rising interest rate environment with earnings going lower in an economy that, yeah, it's doing okay, but almost by definition is going to start to slow down? >> so what do you do you got to cash? >> i'm not going to play the go-to cash game. that's not what we do here, and that's got a lot of people in trouble. you got to look at what you own and understand, some of these stocks have had tremendous bounces. microsoft went from 233 post earnings to 275. we talked about earnings, it was absolutely type to pull the rip cord facebook gave you a gift, and --

apple mid 150s, trending back again. these stocks all bounced for no apparent reason that i can ascertain. liz young said a year and a half ago, we've said it a number of times. the market changed from the by the dip mentality to sell rallies, and that still holds true now. >> you said go to cash how about stay in cash every single time for the last ten plus years when there was a lot of cash on the sidelines, the assumption was that when the market pulled back, the cash would be deployed. but it wasn't yield anything in realtime you were losing money. now that's not the case. people don't have an incentive to take money out of 5% money to go into equity. >> what about bonds if you expect the economy to weaken >> that's an interesting point, right? so i think there are some opportunities from the fixed income market probably for the first time in quite a while. but it's a spectacular environment, not necessarily --

as jeff was just pointing out, especially with the more distressed side. if credit spreads are nary row, you might expect to see expansion there, so that wouldn't be the place i would be playing. people with cash aren't going to be deploying it. >> bear market rally eight or nine last year. our next guest warns -- could drive stocks back to lows. chief economist at msnbc nico securities america joins us joe, it's good to see you. >> thank you, thank you. >> you have been expecting rece recession, but january data has been showing anything but. >> we had a gdp recession, an inflationary recession early last year, and my guess is we'll see a more traditional recession, sarah, this year based on the yield curve,

leading index indicators fed has to get inflation become to 2% and as you guyed laid out it's not coming down as quickly as it's supposed to means you have to have a recession. you always goat core rate lower when you have recessions not going to happen on its own january data looked good for instance, if you look at the production of natural gas and electric output, it fell 10% last month that's the biggest drop for data going all the way back to 1939 so to me, this is a temporary reprieve on the data. >> a lot of people saying january looking seasonal, but i don't know if the fed looks at it that way. they have to get rid of inflation. >> i love guy's comments he's no fan of the fed fed went way too long to raise interest rates, and then jay powell wants to be reappointed and got his inflation fighting stripes and went way too far the

other way. as you know, sarah, inflations is a lagging indicator they'll get what they want, lower inflation, but it's going to mean a recession, though. >> guy >> what's their put? we had a conversation with richard fischer. i think the put is in the form of the credit markets -- i don't want to say seizing up, but showing signs, because it's clearly not the equity market anymore. >> the credit market for sure, because the credit market always causes systemic issues, and you're referring basically to the financial market breaking. my guess is it will be something more banal it will be the labor market shedding a couple hundred thousand jobs a month for a few months in a row, with unemployment move up tot mid to high 4s. my guess is the fed reaction function will change jay powell will go from uber hawkish to being a dove very quickly. but of course if the credit markets break and there are systemic issues at the same

time, that would reinforce easing the fed pivot i still believe in the fed pivot and expect the fed to cut rates this year. >> jeff, did you have something? >> joe, it's jeff mills. quick question on interest rates. i know your view is for the fed to start cutting because of a concession we've all been so trained over the past ten years to think of that rate cut as being a good thing for the markets when maybe historically that's not the case. >> that's right, jeff. if you have a soft landing -- there have been six times the fed cut and there's been a soft landing and the equity market is up massively in three, six, nine-month periods by a lot, 20%, 25% hour, if the fed is cutting and there's a recession, the traditional rate cuts are negative historically, the timing from the last hike to the first ease is three months. over the last five cycles, it's elongated to 11 or 12 months but this fed has been so

aggressive, jeff, and that yield curve i keep looking at every day getting more and more inverted, and banks tightening standards. these are all classic, cyclical signs the fed has overdone it. yet because of the point sarah made trying to get the inflation lower, they're stuck they can't give you any nuance on the economy they are going get the economy lower and that's bad news for equities bad for credit. >> everyone though the market priced out the cut, the cutting notion -- >> almost. they got one little cut in december. >> you think there's going to be a cut because inflation comes down all the way to 2%, or because the economy is going to be hurting so badly? >> the economy is going to be hurting so badly you could lose upwards of 800,000 construction jobs, just construction alone if you match what the labor market is showing on construction versus the inflation construction data. >> all right, putting yourself out there, joe appreciate it. >> won't be the first time. >> no, we know

let's trade this, mike first to you. >> one of the things i think people really fail to grasp in situations like this, if you look back historically at how much, say, s&p earnings can fall when things go the wrong way, you have rising capital costs. we had consecutive years december 2007 where we had 15%, 16% year after year earnings decline for s&p and again the following year wasn't until 33 months after december 2007 until we got back to earnings previously where they had been. this is not an environment that sets up very well. he was talk about construction jobs we have, what, nine-month supply of new home inventory. these things are going take time to percolate through, just like inflation has taken time to percolate through. you end up in waves. i think that's what we're in, and it isn't over yet. >> guy, i'm bummed that tim

seymour wasn't here because last time i was on the show, he was giving me grief for saying, hey, the dollar could still rally this year. everybody's on the one-way train dollar weaker. we're at a near two-month high on the back of all this fed hawkishness talk >> what have i told you for years? >> you told me to go quit and trade for us. >> i didn't tell you the quit. i said, if you aren't an extraordinary journalist you should be trading currencies you're right, the dollar probably goes higher here. but in joe is right and the fed cuts in the back half of this year i will tell you something, that won't be a very good environment, because inflation is still going to be a problem and you know what's going to work gold's going to work i know you'll be like, take your tinfoil hat off and i will later. but the bank is buying it in amounts. if they catch a whiff, gold's going a lot higher. >> all right no tin hat i think that's a legit view. guy, thank you.

when we come back, a chart of the weak, weak a "a." are these moves so bad they're good stick around to find out. first, the chart master is here. that stock breaking through a key level. how much lower could it go much more "fast money" in two minutes.

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welcome back to "fast money. stocks getting bitten today. apple dropping 2%. now trading below its 200-day moving average amazon also down, falling nearly 2.5% it's now trading half a percent under its 50-day moving average. will these tech titans keep going lower? let's bring in the chart master carter worth to find out. >> what we know about apple of course is it bottomed after the market the s&p low is mid october, and apple is lagging, underperforming and then bottoms in the first day of january. now it's rally off the low was more robust than the s&p, and yet all it was was a ricochet. i think apple is not something to be in right now, and frankly it doesn't have a lot of opportunity to downside. sometimes an asset is fair

priced i would call this a pair of 2s don't be long, don't be short. look for something that's more timely, more interesting, more dangerous. this is a dull duck. >> is amazon >> yeah, more dangerous. just consider this -- how many stocks are basically at or very near their covid lows? not many. >> not too many. >> the s&p is up 80% off its covid low, and this stock is very close to its covid low. ebb can say, what about peloton? they're very small companies no large companies that had this kind of trouble. still expensive. mike can speak to that or anyone else, but this is worse. amazon more worrisome than apple? >> fundamentally the case for amazon and apple >> we go become the last couple of years and we had an epic opportunity for retail, and yet amazon dnidn't participate in that some of the news out of -- also hadn't been doing that great

that doesn't seem like a great recipe when you take a look at a name like apple it would be a better place when you think about it this way it's not a long-term duration. the valuation isn't huge relative to the market but i think people need to remember that when there was a view that this wasn't going to really grow -- right now it isn't growing. this thing has not traded at a great multiple either. this thing traded down the ten times earnings once upon a time. i don't think there's harm in apple. continues to generate massive free cash flow, but the upside isn't there. >> i love talking to you guys. all the sell-side analysts love. not too much on the desk jeff, apple, amazon, either? >> i feel like apple's been the stock that's been the bear market barometer for the better part of 12 months. it's levitating, and i think that means there's probably more to go for the overall market

everybody got excited apple covered more than broad market, but if you look at the chart, not that much has changed. continues to make lower highs. it's now just back below that two-day moving average mike said it, the pe's 23.5 times earnings, and i worry it deteriorates more. i would look to 140 as the next test that's the rising 50-day moving average, but i think it could be more downside than that. >> you guys are bearish on everything carter, chart master, we'll see you in the next half hour for "options action. next on "fast money" we'll unveil our expert of the week. started off rocking but came down to earth since monday what are the traders doing with it now you're watching "fast money" live from the market site in times square we're back after a quick break i think i'm ready for this. heck ya! with e*trade you're ready for anything. marriage. kids. college.

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welcome back to "fast money. time now for our chart of the week i know that's not a typo kweb having a weak week. the chinese internet giant dropping more than 7% since tuesday, worst since october among the laggards, jd.com, alibaba. jeff, you brought along a chart? >> i have a chart for the chart of the week. part of kweb is it got caught on the risk on rally since october. you mentioned the dollar, and i think that's a big part of it. whether it's flight to safety because of geopolitical concerns or economic growth or the fed, i think there's a reasonable case to be made the dollar remains

firm here. if you look at the chart you can see a steadily negative correlation between kweb and the dollar the past ten years. there are lots of reasons for that won't get into it now. if you believe the dollar remains firm, that could be a head wind for not only the dollar, china, but emerging markets. companies with high china exposure, whether it's western digital or qual com they have been lagging. >> speaking of chinese internet stocks, what's your take on ali baba in. >> they say no one rings the bellt top, but he was quasi mo do we said it then, there will be an opportunity to buy it, sarah, it ain't here. >> we're going to final trade. we're going around the horn. guy, start with you. >> karen finerman's birthday tomorrow happy birthday

psx, paul, sam, x-ray. >> jeff? >> seller of kweb. i think dollar remains firm, br breaks below. >> j.d. is a name that's going to be reporting earnings and looks incredibly cheap i was thinking about buying calls on the s&p for a bounce off the weakness we saw today, but i'm actually instead buying a bit of jd hoping for a move. i don't think it's done in the long-term, but might get a bump next week. >> that does it for "fast money" this week. "options action"p xt une rk meets bold, new thinking, ♪ to help you see untapped possibilities and relentlessly work with you to make them real. ♪ (vo) businesses nationwide are switching to verizon business internet. and relentlessly work with you to make them real. (woman) it's a perfect fit for my small business. (vo) verizon has business internet solutions nationwide. (man) for our not-so-small business too. (vo) get internet that keeps your business ready for anything.

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right now on "options action," the state of the consumer so important that we are devoting a second week to it we're getting ahead of earnings from target, dollar general, and two under the radar auto related names. then we're following in the grocery footsteps of category leader walmart with the number two and three in the space slated to report next week finally, an arctic blast from the past week that is, and yeti, and how we're managing a trade that left us cold. this is "options action" live from the nasdaq site on the des