Best trade of the year, and as those stocks soar, Consumer Staples are selling off. So in a world where investors are hunting for income and appreciation, is energy the place to be . Pete, what do you say . I still there is room to the up side. I like the way energy is trading, and we get towards 51, some of the news pushing the Energy Stocks higher. I think its pretty interesting. You look at the xle today, as a matter of fact, up over 2 . Where has been by far the most active area in the options world over the next couple weeks, energy, baker hughes, halliburton. You look at the earnings report, very, very impressive. So do i think its over for energy . Absolutely not. I think were in a new range and i think right now were probably in the middle part. I think a little more up side. Where in energy would you go . Services, first of all. Halliburton the best of breed in that space. Schlumberger more global. If you listen, north america spend and margins going higher. And i think these guys are very well positioned. They have the scale to do it. If you listen to oil traders. I talk to a couple guys. They will tell you the market is much more in balance than people think. Minor things like the draw we got will push the market around. I agree with pete, 52 to 62. If you look at the xl etrading at 71, made a series of higher lows and higher highs in the last few months here. It looks like its about to break out, 31 of that is exxon and chevron. When you look at chevron, five years ago, they did 13 in earnings. You know what theyre supposed to print this year . 114. Halifax half of that, what it was. This is a company thats cash understood. But were very likely to see eps grow 100 next year. And possibly 100 the year after. So when you think about that dividend yield and you think about, you know how underpositioned investors are, i think exxon and chevron could you know, lift the xle easily to the high 70s. Is your point the company is not cheap . My my point is, its not cheap right now, based on a dollars earnings and we keep hearing people talk about large integrated earnings on a pe basis, look very expensive. It wont take a lot for them to look cheap again. Because earnings are growing. Halliburton, yes, on the eps side, absolutely. Revenue side, not bad. You are absolutely paying up for halliburton, i believe, at these levels in terms of valuation. Thats okay, because its probably still room to the up side, given just the momentum in the space. But a name i continue to come back to is anadarko petroleum, and if you look again, the tell for me, they buy freeport mcmoran, its been off to the raises since. They report on halloween, which for those playing at home, i believe, is october 31st. Ooh monday. And i think it continues to rally on earnings. You want to take a look at apc. Whats the importance of that . Guy knows a lot. I just want to make clear he knows what day halloween is. Impressive. Talk about it looks a little rich today i thought was a great opportunity to take that off. I think there are beta names. This name hitting 52week highs, i think that might be enough. Maybe theres a little bit more. But im willing to take that off and be in some of the other areas, like a marathon, for instance. Some of the names where they are still beaten up. They have come off of the lows but i thi but i think there is up side. Is the move in energy is it telegraphing something in the market . A willingness to take on risk in the market . As we are seeing money come out of staples and sort of the bond proxy plays at this point . Well, i mean, first of all, this is fundamental. I mean, there are things going on. This isnt just rotation because rates are going higher. The entire sector going through a period where you cut a lot of Companies Never better. The costs going down. Prices going higher and they actually have more Free Cash Flow. If you look at halliburton, probably a 6 to 8 Free Cash Flow field. The move in utilities, i think is a function of the valuations that could not be supported. Energy people are still bearish. Thats why its going to continue to go higher. Nobody believes this opec call. Can we talk about you brought up rates. And so rates arent really going higher. They have gone higher of an a alltime low if you look at the treasury yield. Up 45 bips or Something Like that. On a percentage basis the tenyear yield is right about where it was prebrexit in june. And at that point, i think we were pricing in probably the likelihood of two rate increases in 2016 and right now it looks like maybe we get one. And who knows about how many in 2017. So i think that if youre getting off of that yield proxy trade, as it relates to stocks, you it may be a little too soon. There is no indication that rates are just shooting up. So are we in a scenario in which it may be too soon to get out of the bond proxy plays ohoh. But if rates arent going to go higher significantly, maybe the dollar stays capped and thats goldilocks also for energy. You said last night, too. Did i say goldilocks last night . I think so. Our memory. Ill tell you what, guys so what would you buy . Attempt to answer the question you originally asked. There is some rotation goingson. No coincidence Johnson Johnson on a decent take today down a percent and a half. Procter gamble down a percent and and a half. Im not going to get a lot of giddyup in these names towards the end of the year. Let me get into something to get a little more bang for your buck, if, in fact, all it clear in the energy space. Yeah. What would you buy . Ive got one for you. Tomorrow morning, verizon is going to report, and if those numbers if theyre iphone numbers, wire line numbers, are okay, heres a stock down 1, still outperforming the s p, 4. 4 dividend yield. If the fundamentals are okay, the stock is down 11 from its july highs, thats a stock that could probably work back to the mid 50s over the next few months. I think what the market is telling you, people want to find valuations that make sense and actually businesses showing they actually may be accelerating into an environment where there is cyclicality. Pricing power and actually youre seeing whether yields are going a lot higher. Dan doesnt think so. I think youre going to see a tenyear 2 by the first quarter. Which, you know define that what you want. Part of the rotational trade. Sorry to interrupt. How about the financials . Everybody has been hitting on these guys, saying, you know what, yeah, its a low interest environment and when are they going to raise and all of the rest of that. You look at morgan stanley, goldman sachs, Morgan Stanleys numbers today outstanding. And goldman sachs, the day before, outstanding and all we do is continue to plot our way to the up side. Most names still remain very cheap and youre getting a dividend yield. Which are you in . Youre in citi, right . Citi, bank of america. So not the goldman sachs. I have goldman sachs, as well. So im in some of these various names. Goldman sachs, im in the options, still there is up side. Crude having its best day in over a year, hitting levels not seen since july of 2015 but warning investors this rally doesnt have much juice. Publisher of the gartman letter on the fast line. Great to speak with you. Great to be spoken with. Why should we fade this oil rally . I think, first of all, take a look at whats going on in i think the most important facet of futures trading and thats the carrying charge. The contango as its called. In good strong bull markets, what we should see is the back months losing relative to the front months. Instead, were seeing the carrying charges widen as the market goes higher. Thats archly atypical. The same sort of activity we saw in the term structure this is hard to believe. But when crude oil prices were 140 a barrel, we had the contango widening for several days. Were doing the same thing now. Crude is bidding for storage, as i like to say, and thats usually the environment of a bear market, not a bucket. Here, anything above 52, 53 for wti with a 3. 50 contango to the one year gives you 55 to 58 for the oneyear forward. Thats a very profitable level for almost any sort of producer fracking here in the united states. I think it brings a lot of new crude oil online. It brings old wells that had been capped online. And i think its just going to be very difficult to get the market to move much beyond these levels. So what is the down side to the price of crude, and would that still be supportive for oil stocks . I think its going to be difficult to get wti much below 40 a barrel at the same point. So lets say and i said this on the show before. I think 55 on the high end for 40 to 45 on the low end for spot and makes everybody happy. 45 to 50 might not make frackers extraordinarily happy but most of them profitable and users of energy much happier. So i think that 55 is going to be the top in wti on the spot price. I think its going to be very hard to get it much below 40. Thanks, dennis. Thanks for having me on. Dennis gartman of the gartman letter. 55 is a price going into the meeting not acceptable. If they do nothing at 55, oil prices probably go significantly lower. I think swing capacity in saudi and iran is much less than people think. What dennis is saying, 55 a lot of u. S. Supply online. I dont think you get enough. 55 is a good number and prices go higher. Lets say dennis and right and you should fade the rally. At what price in oil would you start being concerned about Energy Stocks . Its got to go significantly below 45. And i think dennis said the floor was 45. Anything with a low 40 to a high 38 handle, i think is reason for concern. But there is nothing right now that indicates were going to see that. Yeah. All right. Coming up, check out shares of American Express. They are soaring in the after hours session. The beaten down stock about to make a turnaround. Weve got the details. Plus, tesla shares revving up as elon musk sends out a tweet ahead of its surprise product announcement. What teslas next big thing could be and why one short seller isnt worried. Thats next. And later, not just nfl ratings getting hit. A top media analyst says sports ratings plunge spreading and could be about to get worse. Much more fast money straight ahead. Mobility is very important to me. Thats why i use e trade mobile. Its on all my mobile devices, so it suits my mobile lifestyle. And it keeps my investments fully mobile. Even when im on the move. Sign up at etrade. Com and get up to six hundred dollars. Lets get to seema mody. Melissa, brazil, thats whats in focus. Central bank cutting its benchmark lending rate by 25 basis points to 14 . This is its first rate cut in four years, in an effort to kickstart growth. Remember, brazil is dealing with its worst recession in 25 years. In terms of stocks on the move, we take a look at the ewz, the brazilian etf, lower by around 1 after hours. Still up about 80 yeartodate. And even the brazilian bovepsa, up about 50 , as more investors bet on president item rahs reforms. So the central bank cutting rates in brazil definitely some of the highest in the world, thats attractive and i think you have a case where she said shes dollar terms. The currency, the brl still cheap. I think you stay in this trade. Starbucks making a big bet on china. The could have knee giant naming a new ceo there, will have 5,000 stores in the country by 2021. Take a listen to what Ceo Howard Schultz had to say moments ago on closing bell. Starbucks and myself remain very bullish on the chinese economy and specifically the buying power of the chinese consumer. I think starbucks benefits because we have been here 17 years, and as a result of the many years we have been here, we have established one of the most iconic, respected consumer brands. So will that work . Pete, what do you say . I do think it will. I think theyre doing exactly the right thing. They have been there 17 years. And i think there is a great opportunity for them to actually do exactly what theyre setting out to do, double the store count. An incredible area where they can take advantage. Also talking about teavana and how theyll expand in the Pacific Region and china. All of that bodes well. I think you still have to figure out whats going on here, though. It seems like things are a little bit slower here in the u. S. Than expected. We have seen that stock go from the 60s into the middle 50s. So i do think its an opportunity here. I own calls in here. I think this stock is going higher. But there is going to have to be we have to see some positive momentum in north america, as well. You know what this reminds me of in terms of putting a ceo for china, yum brands. And starbucks, unlike yum was the whole china was the whole story forum brands. China now for pete is pointing out north americas problems have been starbucks problems. 5,000 stores by 2021. I think this is a very real story. More importantly, the valuation makes a little more sense. Really . At 25 times next years earnings, supposed to grow at 11 , the lowest in six years. Sales growth Single Digits for the first time in six years. This may be a very long transition. Thats the other thing about china we know. Its not something you see, you know, a switch get flipped and then all of a sudden you see this massive acceleration. Its not a switch for them. Theyre there in fact i understand. They can also miss their comps for the last three consecutive quarters, i believe. When you guys talk about yum and what a great thing it was forum, it was great because there was corporate action. They split these things. Yum was a disaster in china for not true. They were growing 20 in china. China was great until they had the food safety issue. You cant tell me yum wasnt well get the cops and what happened during that thing. During what thing . Of course the food scare was a problem. Before that, starbucks doesnt have a food scare and they might. Youre saying its one food scare away from being the ne next yum . Yum issues in china were china growth. And i think china growth would you buy starbucks . Its funny, dan and i were looking at a chart and he pointed out the level he with just traded down to the other day is the same level we bounced from around the summer of last year. So in terms of risk reward, 25 times, i dont think its rich, cheap, in the middle historically. I think risk reward sets up finally after 12 to 15 months. They might catch a break on an earnings release. I like how dan said at the break. Were going to get the comps and figure this out. Continue on the break maybe well periscope it. I can periscope that. I have the application. Im sure you do in the app store. Shares of tesla going into overdrive ahead of its surprise announcement tonight. Musk tweeted the exact time out midday saying tesla amount goes live 5 00 p. M. California time. This was after jim chanos laid out what he thinks the problem is on the Halftime Report earlier today. Ta take a listen. To me, the problem is not delivers, its production. Thats the real problem here, getting geared up from the model s and model x, which are doing about 100,000, little less, units a year to what they hope for as an initial run rate of 500,000 of the model 3. Thats an entirely different kettle of fish. He says he is still short tesla. Again, this is not a new position for him. Yeah, no. Hes been pretty steadfast about this and solarcity, doesnt like the deal there. Lets see what happens there. Listen, the stock is not rally into any hype about an announcement. It could be a sell the news just on the chart. Pete just said, 200 has been there a lot, lately. To me, youve got to go back five years, look at the up trend there. Its at a pretty crucial level here and been my view youre not going to get a whole heck of a lot of exciting product announcements. Now, its about execution, financial engineering, capital raises. So to me, i dont think the stock is particularly interesting at 200, taking a shot. He does say most people are not going to expect what theyre going to announce. And most people expect autopilot. Right. Which would mean that we just read about that the other day in terms of other parts of the world where they dont even like that expression used for what theyre doing. So i think theres a lot of headaches that youre dealing with right now. Its about execution. Youre exactly right. I think can they execute, can they deliver. They havent done it yet. Will they be able to. The latest delivery numbers for the quarter. Their delivery numbers does that build us into believer believing. Its not a trend. The trend has not been great. I think the trend, if you look at the chart, the move from 270 in july to 2015, a nice trend line, slowly lower and, in fact, the delivers will get pushed back and the cash burn will go higher. Tough stock to short, though. They have thrown everything at this stock to be short and remain short. And its still hovering around these levels. So my point has been for a while, i dont know who the incremental seller at these levels is. Ill say again, the people that own it in earnest wont sell at 180. They might sell at 100 if it gets there, but aint selling it here. A headline thats why its at 200. Trading sideways. But its easier to be long it you sleep easier being long a stock than short a stock. Really . Oh, yeah. We used to say you think its a short . When you short something, it could go to infinity. When youre long losses are limited. You should know that in the options world. Tell you what. Friday night. Anyway take down all at once. Sill ahead, check out shares of American Express jumping after hours. What drove the quarter later this hour. Im melissa lee, youre watching fast money on cnbc, first in business worldwide. In the meantime, heres what else is coming up on fast. You all ready for this football ratings are getting slammed and the pain doesnt stop there. A top media analyst tells us why the sport scramble ratings for this year could be about to get even worse. Plus the final president ial debate is just a few hours away. Its just words, folks. Its just words. Maybe not. One strategist tells us exactly what the market wants to here. To hear. When fast money returns. Your Insurance Company wont replace the full value of your totaled new car. 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