trading day of the year and the nasdaq up a strong 2 and three quarters of one% what's going to happen next year this is the question on everyone's minds, guys let's hand it to over to scott wapner and the half. welcome, everybody to the half time report front and center this our hour what the last days of the year might hold for your money as we closeout a tough run for stocks. will next year be any better does how we end this year have any bearing on what happens next we discuss and debate that with the investment committee joining me for the hour today. let's take you to the markets, we're basically highs of the day. dow jones industrial average good for nearly 400 points, s&p a bit stronger than that the nasdaq the big winner today which is higher by 2.75%

certainly going to be in the top five it looks like no matter what happens today that's where we'll begin, liz. most people have moved on from thinking about what the final and do you think it has any bearing how we start the new year. >> sentiment doesn't care we've crossed a certain day in the calender i would caution people like i have in the last few weeks don't have a short-term memory being down before today 7.3% in the s&p when we were supposed to have seasonality wins at our back is pretty bad, and i think if we finish the year in that camp where we're down more than 7%, even 6% in one month that sentiment is going to carry into

2023 i actually think the bigger risk, then, we trudge through 2023 and we've got this sort of lasting recessionary behavior and we can't make progress -- >> that the whole year is going to be kind of muted? >> i think we have a stab down that's going to be dramatic in the first quarter maybe even before the end of january we do that and then what happens you look at average recession lasts 12 to 18 months. if that's the case and let's say the recession starts in the first quarter, we've still got a long way to go, and if the market can't get out of the way you can you could end up in this sideways fashion >> if the market fails to rally during this time it's been a precursor to higher prices sentiment has been so bad that you just get -- if you can't get anything going to end the year, it doesn't portend well for the beginning. >> yeah, it's hard to argue against that i will tell you as an individual investor, as a professional money manager, i'm not sinking a

lot of teeth into that it doesn't move me, and here's why. i'll give an example today the nasdaq as you mentioned, scott, is up hard. the dow which has been crushing things for months is only up 1.2% if i look at key industrial components they were negative earlier today. so boeing and deere. they were negative today i was thinking about that and thinking, okay, today people want to buy the nasdaq and they're using funds from what's worked over the last few months. i think that's a reasonable conclusion from what's going on today, but the problem is it's meaningless to me. it's not something that would change my stance either on industrials or nasdaqs or the markets overall. so what i'm saying to you, scott, is i agree with what you said and liz said. it's not a great sentiment right now, and i wish we were ending on a more positive note. what i'm also saying it it's not going to really matter to me a

year from now. >> sentiment to use that word is historically awful i use a stat from bespoke, they did their individual investor survey in terms of bullish sentiment this year 2022 will be the first year in the history of that survey -- now that's 1987 -- bullish sentiment was below its historical average every single day it's skewed a little bit but nonetheless it gives you an idea to liz's point you are entering a new year with sentiment being bad. >> it makes a lot of sense sentiment is so bad because we're asking for a belief in resiliency not just for consumer but corporate management we're looking for consumers, corporations, to be able to operate in a resilient -- an

environment that requires resilience, resilience they've not had to face. visibility over the course of the next 12 to 18 months to liz's point seems to be one of two problems one, the fed remains very tight. we see continued stretching financial conditions to tighter levels or we have to enter into a recessionary environment and the fed probably doesn't act fast enough to provide that additional accommodation i guess resiliency comes back to wide ranges for expectations this year. we're looking anywhere from 200 to 225 with a multiple of 15 to 18, right? that's a pretty wide range and really requires you to determine which of these company and which parts of the consumer behavior will be resilient in 2023. that's going to -- that's why there's such a wide range and

why there's so much uncertainty in terms of institution investors going into next year >> speaking of wide ranges, they certainly are that for strategists trying to predict what the next year will hold you've got to tom lees of the world whose target i believe is around 4750. i don't know what jim labenthal has set. the lows of 3,300 on the street. wall street doesn't have any idea what's going to happen in the new year it speak tuesday the level and degree of uncertainty that shannon articulated exists >> yeah, well, the market continues to price in a pain-free disinflation and if we look at the last nine months we've had declining leading economic indicators, homebuilder prints m2 growth is screeching to a halt, and we're on track for analysts ultimately to take an

axe to 23 earnings all this uncertainty will basically lead to lower stocks in '23 now, in q1 we'll likely get some positive prints in terms of inflation coming down, fed moderating their increases and the tightening campaign. so that could lead to some short-term market exuberance but in the end the market has to face the fact that that's going to lead to lower stock prices in '23. >> are you as negative as you've been i think the last time we spoke and maybe before that you made the point -- and for those who haven't followed you as closely as i have, obviously, you at one point had more cash than you've ever had i believe as a money manager, as an investment advisor. is that still the case >> yeah, so if you look at an average client allocation where let's say they have 50% in stocks, let's say in the year we

moved to 40% in stocks and we replace that cash with bonds right now there's great opportunity in to bond market because if you ascribe to the fact that the fed is slowing the economy, that's going to lead to lower interest rates on the long end of the curve so long-term bonds here are attractive when you look at what's going to happen given this fed action. >> i see you buying some stocks, though, albeit it areas -- actually both areas have done well you bought northrop grumman new last week, so defense stocks have done quite well, relative to the market. and obviously energy stocks are the best performing group by a million miles, and you bought exxon. can you take me through those two? >> keep in mind energy has had a great run, but energy generated 11% of the s&p but only commands

5% of the market cap so anywhere you look in the energy sector you're looking anywhere operated cash flows of 10 to 25%, and free cash flows anywhere from let's call it 8 to 16, 18%. so if i'm looking for a sector where i'm going to have copious amounts of free cash flow and i'm going to be insulated from market volatility, i'm going to choose the oil patch the argument against that is if we get into a slummy economy demand for oil will go down and that will impact these companies. true, but i still really like the free cash flow of that sector >> liz, if we think about the kind of sectors that are going to work, the sectors that have worked this year i'm wondering if you think they will again the out-performance, for example, of utilities and health care relative to the s&p 500 has been the most dramatic in

decades. staples have also outperformed the broader market some would say, well, that's great, they were nice places to be but now they're too expensive, so you've got may be too expensive. then i've got tech which is a huge question mark, and where do you want to be in a still cautious and uncertain environment? >> so those sectors are classically defensive, probably not surprising that they've done well in a bad year until the market does get back down to what i would consider oversold conditions where the bears get exhausted -- and look, i've been a bear i've been exhausted myself i'm tired of saying it but it's the truth and we're not done yet so those sectors continue to do okay until we get that behind us i think tech will struggle through at least the first half of 2023 because as we've reiterated over and over ad nauseam the fed is going to stay tighter for longer.

one thing i want people to think about, though, the fed's projections so what they tell us they're going to do with rates have to assume a relatively linear pattern meaning they have to assume inflation is going to come down in a linear pattern. they assume economic data is going to come down in a linear pattern. i'm willing to bet that something bigger happens before that in the midst of their so-called linear pattern that's going to pull their reaction forward and they have to do something. that still doesn't negs saerl save tech. on the other side of a big draw down i would be in classical cyclical sectors, semiconductors even, small caps, that kind of stuff. >> you'd rather be a little early thinking that's going to be worse going in but be the first out and outperform on the other side >> sure, i'd rather be early i guess than miss it completely. and something like financials,

for example, has already been punished so how much further down can it go i'm okay buying when it's down 25%. it might get down to 35%, but then you wait for it to come back on the other side >> in terms of technology i mention going into today the nasdaq was on pace for its worst december everch now with the pop we're experiencing right now it's no longer going to hold then who knows what the last couple of hours left today and tomorrow are going to hold but it just underscores the kind of year it's been for tech which has been miserable so the biggest, to the smallest, to the higher valuations, to the middle valuations, the technology trade has just been a killer this year >> and i'm thinking about something you said yesterday which i didn't get a chance to come back to you said i think these companies have executed well you remember saying that -- i'll say it if you didn't say it. these companies have eccuted well the share prices have done terribly

this is about valuations in terms of higher interest rates i don't see large cap mega-tech, the apples and googles of the world, i don't see them falling down in terms of execution if i look at apple at 24 times forward earnings, google, i'm thinking to myself they can do just fine. they can do just fine in the year ahead what does just fine mean like 8, 10% in the course of a year. to the point liz was making, i see bigger gains ahead in the classic cyclicales, the industrials, the financials. one thing we differ on which is fine i don't see the pending dip you see coming in economic activity i think we're going to be more linear i know you use that word as something to be aware of and the reason i see things linear is i look at the strength of the consumer right now. master card gave us 7.6% year over year growth in spending

we may not have that dip everybody's worried about in the first half >> rich, what about from a sector standpoint? we can take tech first obviously given your movement in your portfolio you don't believe tech is going to do well in the new year you trimmed apple a couple months ago and sold amazon in september. >> mket. but to jim's point you take a company like microsoft, their free cash flow since 2019 has gone from 30 to $61 billion. you've got apple's free cash flow going from 60 to $110 billion over the last three years, and all these companies are simply executing and increasing their free cash flows. that's after very, very large amounts of capx. so at some point these companies everyone is going to puke them out and they're going to get

very valuable on a multiple of cash flow. right now that multiple cash flow is averaging anywhere from 4 to 6%. so i am not as negative on the tech sector as it might appear i just was so overweight i had to trim it out >> but what do you think of jim's overall view i ask you because i don't know of two people who have been on this show together at the same time -- i mean weiss obviously has been extraordinarily negative on the market, and he's been correct but you've got more cash for the most part than you ever have you've been a batten down the hatches guy for months your view is decidedly negative on what lies ahead and you heard jim articulate the reasons he believes none of that is going to come to fruition

we get to choose when we're going to put money to work and this is an environment where the landscape is dramatically changing from the last 15 years of a zero interest rate environment where everything went up to going forward where we have a higher structural interest rate, which increased the discount rate of future earnings, and it's going to put more pressure on choosing the right stocks at the same time there's tremendous opportunities for our clients where we asset allocate in bond markets. so i don't only have to focus on one asset class, which is the stock market we're very comfortable now reducing our exposure and owning bonds, which has done exceptionally well since we started putting them on in september. >> you taking issue for how i characterize your view >> you are correct

i had a moment there i was like i should have -- >> you're like did i really say that >> wait a second here, because on the face of it i'm like wait, is that what i really believe we're not going to have a slow down the data that keeps coming in keeps telling me we're not i really love rich rich is a caricature of the bond managers i literally grie up with i feel at home with rich the data keeps coming in where jobless claims are today the master card data where the atlanta gdp now is at 3.7% and that's why i did the double take withyou. this is what the data is saying. >> can i say one tiny more thing? >> real quick. >> we've been coming at me about

how it's going to change -- it's going to change for nine months. the floor is yours, milady >> but i do think some of it has changed, and you have to group them into what changes at the same time as the market and what changes after the market so continuing jobless claims have decidedly moved and continue to move upward. and they haven't really come off of that trend, right look at things -- retail spending, for example. retail spending came in at its lowest level in 11 months. >> that was in november. master card just gave you december and it was really good. >> but we've got spending at we'll call it all-time highs, savings at all-time lows, credit card balances from something like master card going up. that means somewhere a consumer is running out of money. there's no reason to spend on a credit card so much if you have all this pent-up savings, so i think it's in a different part of the economy and then you have to look at initial jobless claims maybe haven't shown it yet, but it takes a little while

we heard all the layoffs from tech the layoffs now coming through in the news are what are going to show up in maybe december data that we don't get into january. >> we're at an impasse >> we are, which is why we go to shannon, our next counselor to make the presentation on, you know, whose side sounds more reasonable i'll use that word, reasonable, for how we should think about the market in the new year it's remarkable to me that we could have such diametrically opposed views based on the very same information >> well, i'd also end up with very similar expectations i think in terms of those range of outcomes that we talked about. i want to sort of take a little bit of what liz and jim and rich have been saying and sort of shift gears away from not just the consumer but i talked about resiliency earlier let's talk about capital allocation one of the things jimmy and i agree on is one of the catalysts

for next year of the u.s. economy is going to be this manufacturing reshoring, this emphasis on capx to be able to bring us up to production whether it's for pharmaceuticals or parts and the other thing i want to think about is how many of these management teams have been facing capital allocation decisions in an environment where they actually have to make a decision and i think that's going to be a catalyst or perhaps a detriment to big tech companies to manufacturing companies that are going to be looking at how do we build that next plant, how much automation has to be involve, what's the work force have to look like? we obviously are concerned about the consumer because it's the biggest part we're not going to have any fiscal spend going to add to gdp next year, probably nothing positive from a housing perspective, so is the variable this capx. poor capital allocation has hurt

the energy companies for decades, and i'm interested to see how other companies grapple with that as they're looking at more limed and much more expensive capital over the next couple of years. that's where you start to determine not just at the sector level but the company level. coming up, tesla shareerize rallying today coming up what one of the stock's biggest bulls thinks of it going into 2023 and later broadcasting legend otlln haels is back ahead of foba oamazon prime we're back in just two minutes

tesla shares are rebounding again today, pairing back nearly all of this week's losses. adam jonas is out with a note cutting the price target, though $350 from 330. he still thinks there's more than 100% up side from here. the pull back in shares or rerating as he's called it is an opportunity. we've made it our call of it day because it has been the stock of the moment, stock of the week. how do you view this one >> i don't own stock, and i've never owned it i just don't like a business where you don't have more recurring revenues, less

competition, and a more modest valuation. >> so let me ask you this, though, and i asked a group yesterday the same question, and we publicized the fact you're one of the top ranked financial advisers in this country you have a lot of clients you manage money for if someone says to you, look, i follow adam jonas, okay, i like his research and i still believe in elon musk and the valuation has come down from 80 times at its peak to under 20 times now why isn't it a good -- let's take a flier on it, man. what would you tell them >> well, taking fliers for the capital has been hard earned and we don't want to own names that have been selling at lofty multiplesch and i don't really care what the analysts have to

say- say. it comes down to what's the multiple on it, the recurring revenues and competitive landscape? and i don't think any of those meet any of the metrics irrespective of a very qualified analyst like the stock >> shan, what about you? >> well, i think this crisis of -- of confidence is based on the fact that tesla's having an identity crisis. if you go to a few years back we kept hearing it's a technology company. nobody wants to be a technology company right now. so the problem is the valuation is rerating along with all the other tech stocks, and then people are olooking at it the way jimmy to his credit has always explained this stock, it's a car company i think the whole twitter, musk is just compounding some of this weakness, but i think the reset is really benefitting from being a technology company on the way up and being harmed by it on the

way down >> and maybe, jim, that's the debate that's going to be had for a long time to come now, whether it should be valued as a car company or whether it should get a premium to that because of the kind of technology that it has, the first mover advantage that it has had in electric vehicles, the place where the legacy oems want to be tesla's already there. >> i think that's the debate is it a car company or a technology company i believe it's a car company and i do a comparison. there are other advantages like the lack of a dealership network that tesla has but i think the way investors has looked at this is huge use historical analogies this is not the first time a high flier has come back down-to-earth. is this going to be amazon which crashed and went onto be just a hero over the last 22 years, i

don't think so is it going to be a sis co systems? i think it's actually going to be that. what i don't think it's going to be to pick an obscure company that once wasn't obscure, siena is now a $50 a share company i don't think that's what's going to happen. amazon, sisco or siena, i say cisco. up next rick presents his best ideas for the year ahead. half time is back right after this grade my trade send us your latest stock move and the investment committee will debate it and grade it. e-mail us or tweet us. for expedia members, travel doesn't end at booking. it's getting a discount on your trip, plus points for your future travels. so you can think about the next trip.

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welcome back to the half time report. i'm contessa brewer. here's the cnbc news update this hour a huge surge in covid cases in china and yet the united kingdom and france today announced they won't test visitors from china for the virus. yesterday italy became the first european country to say it will

test travelers arriving from there. the united states said earlier this week it will require proof of a negative test starting next week the committee investigating the january 6th attack on capitol hill is withdrawing its subpoena of donald trump as its probe comes to a close the panel asked for the former president to provide records relating to the insurrection, but now they say they've just run out of time. the committee released its final report last week, and it is set to dissolve january 3rd. benjamin netanyahu has been sworn in as israeli prime minister earlier today netanyahu set to lead the most far-right coalition government in the country's history just yesterday the conservative party platform said its top priority now is expanding settlements in the disputed west bank territory scott, i'll send it back to you. all right, contessa, thank you. contessa, brewer rick out with his best ideas of the year list. so we've got three stocks on this list. let's start with microsoft

why did it make the list >> well, microsoft should be a core holding in anyone's portfolio because it's really the intersection of the cloud and software along with gaming they've had a 17% compound annual growth rate as i mentioned previously cash flows have increased basically 100% over the last three years, and there's low sick luicality to the company and i believe every investor should have participation in cloud. it's the major superhighway of the world. >> we mention one of your new buys earlier in the show coming from the defense space northrop grummand but lockheed is on your list, too, for the new year. why? >> one of the lowest it's been trading at and that's enabled the multiple of the cash flow is

selling at roughly 8% of cash flow that plus the fact that they have $140 billion backlog, again, $65 billion in annual sales, and they're right in the mix of what is being, you know, sought after by all of governments around the world that are increasing their defense budgets. they're working -- they're the leading proponent for the u.s. in hypersonics >> jimmy, these are -- this one -- both are in you're wheel house, obviously, but i don't need you to tell me all the reasons why you like microsoft but what about this lockheed >> it's a good call. i own boeing and raytheon. when you put all these together there's a bunch of overlap i'm going to call it like it is. as rich said defense is growing. you get raythen, and airplanes

and fighter jets and i hate the world we're living in, but we're living in it and got to deal with it, and that's where there's going to be top line growth for the foreseeable future >> canadian natural resources -- >> yeah, $63 billion oil company in canada largely completed its capx program if you look at the numbers they're operating cash flow 22% at year, spend a bit on capx, have 16% free cash flow which is unbelievable they're reducing and returning to shareholders. leverage ratio is very low, extracting costs up roughly $30 a barrel and it's a great position company to own. >> all right, well, thank you for the picks. by the way, next week on the half we're going to kick off our annual stock summit debating the stocks and sectors the committee

has the most conviction in for 2023 coming up next veteran play by play announcer, novice stock trader, investment enthusiast, al michaels, plusour experts getting ready to trade -- well orb it's a gray door trade e-mail us or you can tweet us. we're right back

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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. we're back nfl playoff hopes on the line tonight as the cuboys take on the titans in the final days of amazon prime's season. joins us live from nashville ahead of the big games good to see you as always. happy new year to you. >> judge, you introduced me as a novice stock trader. would you find another atjective? >> expert, legendary how about that >> whatever. >> tennessee has got a lot more on the line thoont than dallas does and who would have thought they'd be fighting it out with the jaguars for the afc south.

>> next week's game between the titans and the jaguars will determine which of the teams goes to the playoffs so they're going to be the last seeded team of the division champs and have to face a team that will probably have a better record in either tennessee or jacksonville next week meanwhile for dallas if they can win their next two games and somehow the eagles lost their last two, then the cowboys would wind up winning the nfc east so there's a lot at stake tonight especially for dallas, and for tennessee they've lost five in a row and they want to get a bit of steam coming into the last game of the season. >> i love your take on the season itself. it's been so strange in so many different ways the fact that aaron rogers and brady and russell wilson have hardly lived up to the historical standards that each

has set, it must have surprised you as well. >> well, it has to a degree. aaron seems to be on the uptick right now and brady won that game the other night, and that was big. it's not been a good year obviously for russell wilson once again, scott, the league is so wild and crazy and people -- it's become a conversation piece every monday morning and tuesday morning around the country this is why people love the nfl. it is so unpredictable thatkeep anybody who tells you they know what's going to happen, it's like picking stocks. they really don't know >> the game has changed a lot. the way we consume it and view it has obviously changed based on how you're calling the games and where you're doing it this year how's the first season gone? and what do you make of the evolution of the consumer, the viewer experience, if you will >> i could not be prouder of the

product that amazon's been able to put out there this year remember a year ago you probably had two people, jared stacey and marie donohue, who were trying to put this whole thing together and they did we put together the talent, the production crew, the producer. and i'll put the production up against any production i've seen on anybody's telecast over the past few years so i'm proud of the way everybody's come together. this was -- we were launching this thing, didn't know what it was going to be like and it looks like a major league big time game. and for amazon they've really gone all in. the production trucks, state-of-the-art, tremendous people love to work here and be a part of thursday night football so on balance i think it's been a hell of a year >> it's been fun to watch. some of the games have obviously been challenging and left you

exasperated on the air at times. it's been a fun watch no doubt you do this long enough you have a poor choice of words every now and then, which is why i referred to you as novice. i meant seasoned stock trader. >> i'm so seasoned ibm -- i know shannon is ibm as far as i know, right that's going to be one of her picks. >> you've been in it for 30 years? >> i've been it in the mid-'90s and early '90s back when i was a novice stock picker everyone owned ibm. i have to tell you 20 times over the last three decades i wanted to hit the sell button thank god this is the one year i didn't it's the only stock -- take a look at it right there up $1.40 on the day and almost 6% on the year i'm sure i'm like a lot of people you hold something and you're ready to settle on one

thing and i just can't, and i'm glad i've held on. >> it's up 6% year to date shan, what should al do with ibm here he's been tempted sometimes that finger has been on that cell button but he hasn't pushed it >> yeah, this stock is all about execution, al, and they're paying a dividend more than 4.5% which is comparable to what we're getting in t-bills which is a lot different than the rest of the stock universe. the pride of ibm is their consulting business. as long as they can continue to innovate they're going to be able to continue to execute. this is just the first year i think of a multi-year story in terms of management execution, and i would definitely hold onto this here. >> wow, al, it sounds to me you're going to do that. >> well, last time we talked in september you asked me what i was doing, and it wasn't a very

good year at that point and clearly hadn't been a good year, period and i said i was going to take all of my cash and put it in cans in the backyard now, i wish i had but i had very high hopes for 2023. >> i think you're right. i think a lot of us do it's a challenging environment as you know. we look forward to listening to you, watching you tonight. one of our all-time favorites, al, thank you so much for making time for us. >> love this show, my favorite show on tv >> we'll see you soon, buddy happy and healthy, okay. >> you, too. up next mike santoli has his midday word. we're right back

welcome back to half time. senior markets commentator mike santoli joins us here with his midday word. you're a seasoned market commentator, too >> i'm a novice football commentator, though. >> what a silly choice of words on my part, but nonetheless a couple days we're trying to put something together here. >> a little reprieve again, i think you have to look at it through the filter of stuff that was making new lows coming into today, right so nasdaq and s&p now lows coming into today. high beta stocks relative to safer defensive stocks a little bit of relief there was some talk this is just mechanical activity we've been seeing right now, so much focus

on these big hedged equity mutual funds that have exposure and keeping the market betf that stuff and clear of the noise to find out what the real setup is i still think people are pretty defensively positioned, and i think that idea that weak first half or weak first quarter of next year is the call. you know, maybe it's going to be a challenge. i think that's what we set ourselves up for and i think the fact january 3rd of last year was a 100% change in the complexion of this market has people thinking things change in the new year than they usually do >> what gets us out of the range we're just talking about we've got to wait. >> that range is pretty narrow so it could be almost anything it could be just a little bit of relief in the megacaps that gets us there but in terms of the real range whatever you want to call it 4100 to 37 or something like that, i don't really know.

it does seem we're capped by recession is coming, expectations every time we've got in the mid-3000s the market has gotten a bit cheaper. you have the valuation work woro it's not as if the set-up is what it was like last year >> i'll see you in a few for your last word that's mike santoli. up next, we're grading your trade. you can send them in as well ask halftime@cnbc.com. we're right back . hi. what's this, a hospital bill? mm-hmm. for 1,100 bucks? ga-a-a-ap! looks like your wallet may need a sling too. tell me about it. did that goat say "gap"? he's talking about expenses that health insurance doesn't cover. eh-ehh-eh! well i'm talking about the money aflac pays to help close that gap. aflac, huh? aflac! ga-a-a-ap! aflac! gap... uh-oh! that duck can motor! get help with expenses health insurance doesn't cover at... aflac! ...dot com.

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i want to bring your attention to some news regarding southwest airlines the airline just issuing an update that they plan to return to normal operations with minimal disruptions starting tomorrow shares are rebounding today, but it's been an extraordinarily tough set of days with all of those cancellations, most of which were due to southwest airlines so we'll see what happens now in the next 24 hours or so. let's do grade my trade here shannon, you're up first it's from glenn in charleston, south carolina i own 600 shares of costco at 488. it's dropping every day. should i hold or sell. the losses are starting to pile up >> i would say, longer term, this is going to be an a-minus trade. i think right now you're experiencing pressure based on digesting potential consumer weakness next year

but remember, costco has a subscription component as well as a very prescriptive sku management program, so they can really control their costs at the end of next year, you'll see margin improvement from their store brand as inflation starts to come down. >> rick saperstein, next to you, chris in the uk. i bought bank of america, $32.73 per share for the long-term what do you think about his trade >> well, as long as it's not the only stock in your portfolio, i would continue to hold it. it's recently prized at 1.4 times book value, return on equity has been around 15% but they are subject to the economic whims of the u.s. so, you know, the inverted yield curve can't be hurting them, but i would hold the stock if i wanted to hold a bank name >> jimmy to you next, from bud g. in akron, ohio. i recently bought newcorp, $135, anticipating government spending from the infrastructure bill

next year. please grade my trade. >> i've got to give him a solid "a." i've thought about this the whole show, it's been on my mind an "a," an "a" minus, it's the right sector to be but i want him to get an "a" plus to do that, you have to think about, nucor is spending a lot on new plants. for that, i might think about another steel company. >> i was thinking about that one as you were talking about nucor. if he said he bought cleveland's clifs, would you be giving an a plus >> he gets an "a," not an "a" minus. i've thought about this. >> keep your trades coming in. you can send us an email final trades on the other side of this quick break.

all right. 4:00 eastern overtime got a good show today. rick hitsman on all things tech. have that instacart. the markdown of the valuation there. we're going to discuss what his outlook is for 2023. scott croner with citi's 2023 outlook. i'll see all of you then liz young, your final trade.

>> so my final trades in december were sell consumer discretionary and buy the two-year my final trade today is, now we wait, and it's just cash i think there's more downside to come probably in january >> all right jimmy lebenthal, farmer jim? >> i already mentioned it, but it just stares me in the face. raytheon technologies. well-run industrials company it's not just defense, also a commercial aerospace, that continues to pick up with orders for new planes that need engines from raytheon and i like the valuation, as well >> okay. sha shannon, what have you got for us >> estee lauder, this company will definitely benefit as covid reopening in china, as chinese consumers go out and travel a bit more >> we didn't even discuss that, the implications of those new restrictions in italy and the united states from the cdc that news coming out yesterday as we were thinking about what the reopening is going to mean to the global economy in the year ahead rich saperstein, why don't you

finish it off here with your final trade for us >> microsoft continues to be an anchor for investors that want to expose you to the cloud and software, growing clothes, and it's a great name to put away. >> yeah. so that's among those big tech names that are up today. it's up about 2.5% i'll see all of you in overtime a little bit "the exchange" is now. thank you, scott hi, everybody, and welcome to "the exchange. i'm kelly evans and here's what's ahead this hour stocks are higher today, erasing nearly this week's dow and s&p losses but with the two-year yield at 4.4%, are short-term bonds a better bet we'll discuss the new alternatives to stocks plus, goldman warning that china's earlier than expected reopening could disrupt the supply chain further we'll dig into the potential economic fallout and when the recovery could actually take