Down, we will take your questions about additional currency. First, we start with what looks like investor heaven. Stocks are soaring, the dow is up 7 the year, the s p had a record high of 9 t. Nasdaq also had a record up a staggering 15 this year. Its not just stocks, gold is up 9 . Bond is up. Its the same across the globe. So is this investor heaven . Or is it something has to give, guys . Smr smag has to give, absolutely. Right now, i love the graphic and the hearts and everything. Did you ever have harp lessons as a kid . I think you say the course. We had a section last fight, do you stay with the winners . I think the winners are winners for a reasonch i think you continue to stay with names, names that weve talked about for a long time. Honeywell in the Aerospace Defense industrial section you stay with. Clearly something is going on with netflix. Analysts get their arms around. Home depot has been a monster now the last five or six years. I do think the slf is giving you an opportunity to get long it against 23. Thats been a level of hell. Tim did a segment weeks ago. Its giving you a place where the riskreward sets up well. Something has to give. No, i think they will, i said this im not pretending to be some raging bull. I say it all the time i am not. I am fearful and skeptical. I also understand what is going on. We have been here now for months, which means in my world, it continues to go higher. You have to stay long until proven otherwise. Right . And have everybody, i have probably been the postbearish over the last couple years. That was, obviously, not the right position to be. In this market, to me the biggest risk to this market is higher rates, right . Then it gives you competition for stocks. So as long as rates remain relatively benign. We seen that over the last six months. We have been a channel in the rates market. So unless that changes or Something Else changes, be it economic shock. We get something from overseas. The china debt problem. Something like that. Until that happens, investors will continue to buy. You should, too. Lets say for arguments sake its 50 basis points, which they are not going to do. That will not challenge. Thats not higher rates. No, im talking rapidly higher, an inflation scare. An issue where they had to sell treasury bonds, that type of this inc. Market have tended to underestimate shortterm volatility and overrate longterm volatility. We played in the market, if you stayed in this market, you have been rewarded. To me that trends can continue. I look to europe, i think their earlier cycle tan we are. We are early to late cycle. Depending on the economy. I agree with guy and disagree with guy. I think honeywell is a great company, its gone from 30 to 130. The valuation is difficult. The banks, we spent a long time talking about banks. Yet, we havent done anything. Thats the reason you want to own banks t. Valuation is there. Everything you said about the feds are the reason the banks need to be in the second half. I agree, there is no doubt about it. Trades in the u. S. Are crowded. I think the fear in the trading desk is the fear we will gap to the upside. We talked about that before in the show. People get really fearful. Trades are crowded but people are under. Trades are crowded because of retail investments, theyre driving needs. So these, you know, there are large percentages of a lot of these etfs, basically, they raise the bar here a bit. You had institutional ownership. People understand the growth aspects of these companies, ie a google, ie an amazon, et cetera. But when you look at value at returning 1 point x dollars, they cant find Good Companies with relatively cheaper or attractive valuations. It tells how, we know theyre crowded. What do you do now . I hear you saying two things. I guess my question is, to me, i get concerned about the narrowness or the lack of breadth when i see netflix dominating this market. Thats when this feels like 2015 all over again. I dont think it feels like 2015 all over, valuations are completely different than they are. Global backdrop is very different. Lets look at these stocks, people understand the Growth Opportunity within these facebook or an amazon or a google or a netflix. They understand the mark. I tell you whats different, though, when you look at these names that have really like, these value names, value i dont think will pick up, maybe it close a little bit. Whats left . What is value outside of banks . I consider banks valuable. Let me ask you a question, are you buying energy here . You are buying energy here . You think that energy is worth it . The equity the equity smr long oil. I lost some energy equity. I think the energy is a no touch. I mean, people just arent fully they have to buy it. For financials, well, i think its very good. The outlook for financials is so energy, how can you make the argument. I like google and facebook. I get it. If theyre crowded already. What makes a difference if a trade is quote unquote crowded . Who is the next buyer . Id rather by energy, where all of a sudden people go, oh, no, im not invested enough in this. I got to get in. You have to get back to the fundamental stories. If we all say there is a growth dynamic. Its not normalization. I agree with that. Industrial transports, inflation trades, materials, killed. People misunderstood the political process in china. Look at capex. Capex growth wall street exodus for capex spending hasnt changed at all this year. I had a conversation today, investors September Imt on that has changed. Really, you are not going to make any money on it. Lets back up, fundamental, are they solid in energy land . I dont think they are. Thats exactly what can chang change. I have Global Demand 1. 5 hold on. What y is that on the Balance Sheet . I think fundamentals look good. I think the longterm fundamental also dont look that great. Look at today the ricking that occurred based on the position it had on friday, even after positive takes one at a time. Stop, stop, stop, i want to know, david, seymour, what you are buying . I am very cautious in this environment. I Like Technology still. I think that trade, financials, i love them. Because i think the fundamental backdrop for financials is solid based on cost cutting and the valuation structure in a longterm opportunity. If we get some ie tax cuts and reform, financials are going to be in fuego. You mentioned rates and bk talked about rising rates. Its interesting. I think its important, from dan nathan, i want to make an important point here. Its probably every other point hes made. The fed controls the front end of the curve. They dont control anything else. So if they raise rates, if you dont get a commensurate move, weve talked about this a number of times, they could potentially, they always have hiked that into recession. Thats the fear. If you are looking at value in investor heaven, the next guest says you can find it in one sector, she joins us now to tell us why we should bet on the banks, kate, good to have you with us. Hi, melissa, im a little nervous hearing this went on. Too many people are looking for value in the banks right now and recognizing its a strong fundamental also, on valuations. Maybe its a little under loved by the investment community. Investments for banks, i would venture to say, its retie much the same case as you could have made at the beginning of the year. So what is going to happen, thats going to ultimately make banks the sector you want to be in. Thats a completely fair statement, that especially the easing of the Regulatory Burden and the fed will continue to normalize, that could be quite good, especially because the datas are close to zero. We are actually seeing a better and more sustainable macrogrowth environment. That leads people to take a look at the sector and the earnings power, simply because we are getting a significant amount of earnings updradz there, you would think more investors would be reallocating. They see the ten year and i think there is a sense that base cant perform unless total rio owe i think we should pay more attention to fundamental also and adding to positions over the media terms. I hear that premise. I would make the next statement that banks have probably never been more dominant in terms of the competitive landscape. I think its actually bigger than too big to fail right now. Operational efficiency. Isnt that really the story . Because the earnings regression tells me that these banks are over a ten or 15year period are very cheap. I think they will earn what they were yesterday. I who you would hope thats the case and i think on a Regulatory Environment being more accommodative or at least less oppressive i think supports that. But before i kind of upgrade and double my earnings expectation for the sector, i do think we need to see the right people put in place or were some way away from that. I think that this is a sector that has such strong muhammad apples, but for some reason, cant really catch investor attention in the way cap can. People recognize the Balance Sheets are healthy. That its a different period, but cant make the same analogy to banks. Hey, its brian kelly. Im curious, one of the arguments out there even if the regulation doesnt get any worse, this is going to be good for banks. Do you buy into that . Basically, if there is status quo, banks will still do well . Yeah, i think it relieves pressure to get focus back on the core businesses. If you are constantly worried about new regulatory pressure or Capital Requirement or you know a new set of eyes scrutinizing your daytoday operations, i dont think that you are going to be as forward looking in a kind of growth constructive when it comes to making digs about your business. I think feeling like we can live with the status quo, well allow Bank Management to make great decisions going forward. Thank you for your time. Kay moore of blackwell. Tell me i love kay. I like the investing financials, its been terribly disappointing. So what snapped the financials out of this funk . Its a great question, few get any hint, the next thing that has to happen, any hint of regulations ratcheted back or something that will jump start this space. I think thats what people are hoping for. With that said, i dont think its on the horizon any time soon, so you got to hope the xlf is up about 23 and comes back the end of the year. I think the argument, she brings it up clearly, its not just about regulation inform if you will. Its about enforcement. I think thats a good point to make. This agency, will you have an enforcement issue that again they can turn a blind eye to certain things. I dont think its 100 priced in. I think when you see it right now, valuations in technology, really stretching out. I think money will gravitate into financials, as an alternative. I think people need to stay consistent with banks. I think people are all over the maps. The rhetoric on banks, its not necessarily to come on. If you think about the elation and the fear of banks the Balance Sheets are as good as theyve ever been. Theyve never been more efficiently run. That to me in an environment where i think we have commitment growth is a no brainer. Coming up, check out shares of big box retailer costco, a conference calm getting under way right now, we will bring you the latest. More car trouble for General Motors, a lawsuit about its pickup truck. We got a burning question. Moves to record highs. Digital currency guru. Brian kelly will answer your best questions on twitter. Long on money, ask, tweets, do it. Much more fast when we come right back. At bps cooper river plant, employees take safety personally down to each piece of equipment, so they can protect their teammates and the surrounding wetlands, too. Because safety is never being satisfied. And always working to be better. Iits where we end up. T, expedia. Everything in one place, so you can travel the world better. Studying to be a dentist and she gave me advice. She said dad. Go pro with crest prohealth. 4 out of 5 dentists confirm these crest prohealth products. Help maintain a professional clean. Crest prohealth. Really brought my mouth. To the next level. Go pro with crest prohealth welcome back. General motors falling on allegations that some of its vehicles were rigged. To pass an emissions test. Phil lebeau has more. Reporter mellissa, its easy to see why theyre under pressure when you look at volkswhat gone and its stock over the last yearandahalf. There are different allegations between volkswagon and general moto motors. This is a civil suit. Its a class action suit that has been filed on behalf of owners of the heavy duty diesel pickup trucks that General Motors makes. Essentially, they accusing them to use defeat software in the Diesel Engine for those vehicles. About 705 trucks could be impacted. We reached out to General Motors, it is vigorously denying there is defeat Device Software used, saying these claims are baseless. We will vigorously defend ours. It requires to car standard, car being California Air resources board. If you look at General Motors, they were down 1. 5 to 2 t. Heavy diesel peckup trucks generate 15 of the profits. If there is anything there, it could hit the bottom line were showing you dw. I talked about the impact its had on volkswagon. Go back to september 17ing of 2015, thats within it all comes out. This stock hasnt recovered since then. We will keep checking this. One last note, we have reached out to the lawyers who filed this lawsuit. They claim that theyve done testing on their own on these trucks. We havent seen the test results. We want to see the tests. We dont want to see whats listed in a civil lawsuit. Lets see what they saw. We saw the mark cap on september 17ing. We have that cart. We saw that drop. In terms of settlements, et cetera it did cost billions of dollars . You mean volkswagon, as far as sales . Yes, absolutely. Theyre still in deep in this mess over in europe trying to extrick themselves from all of extricate themselves from all of this. There are lawsuits going on, yes, it could have potentially billions of dollars of implications. We cannot overstate this enough. Volkswagon admitted to cheating after being continually confronted by regulators. What you have with General Motors is a Class Action Lawsuit brought on behalf of two truck owners. The 705 you can froof trucks we 2017 t. Lawyers say thats how many should be represented bety class action suit. Phil, thank you. Phil lebeau in chicago. We have a parallel, people dont believe at the end of the day gm did this. Its quickly, bk talked about this, a fouryear low today, hertz is in a some sort of a death spiral. I hate using that term. Until stocks at least find a flat ground or bounce, the Auto Companies cant afford the head winds. This is just noise. They are much larger than what we are talking about. You tack about 50 cents higher. Which means the stock, can it go to 3150 . Which is some distance from here. What we dont hear anybody talking about is ford and xm. We started to have this conversation on friday or monday. About transportation as a service or their ability to disrupt the sector, themself, gm has this mamp they claim is going randly. All these places where they get involved in ride share. Do you believe them . Should they be involved in this business . Absolutely. Until we see some traction there, i think the number also are garbage, them coming out defending it vigorously, thats very important in my eyes. We talk about it constantly. At times ive taken my eyes off the ball. I thank them tore that all the time. So right. This is an industry we know is being disruptive. Yes, gm has this. Is it going to move the needle . Its not a place i want to invest, right . Its not as i see it a massive growth area. In fact, its a shrinking area. Even if they got ride share right, its going to be a smaller business than they have now. Still ahead, the top technicians says one of the names is about to take a lead. Hell tell us which one and why. Im mellissa lee, you are watching cnbc. In the meantime, heres what else is coming up on fast. Dont forget hedge funds are rising from the gravy, posting some surprising gains. Ill tell you the stocks that got them there. Plus, calling all bitcoin fans, mr. Bitcoin, himself, ryan kelly is answering tweets and taking all your bitcoin questions. So tweet us cnbcfastmoney. If its nice, well answer them when fast money returns. Welcome back to fast money with stocks soaring and the s p and nasdaq approaching big time highs, heres whats coming up in the second half of the show, amazon eeks away to 1,000 a share, at stocks are behind. We will play a little would you rather. Hedge funds are cameing a comeback in illinois. Marc levine will tell us the big hedge funds and why to ditch the rest. First we start off with a story captivated main street and wall street. That is whit coins Digital Currency hit another all time high. Reporter hi, melissa, bitcoin has been on the rise the southern ascension over the past few months has been dramatic. It took a year to go from 500 to 1,500. In a few weeks, they recently crossed 2500. In total, the market cap gained about 23 billion in value this year. Whats behind the third . Asia. Specifically japan and korea have stepped up buying, investors view it as digital gold. Wright is getting on board. They announced they are developing commercial applications of bitcoin underlying technology. They gave it a thumbs up this week. There is concerns, there is no reg la story body. Meanwhile, short positions have declined by 10 . Bet coin could see selling intensified. Mellissa. Thank you, seema mody, one of our traders say there could be a risk. Bk. Listen, bitcoin has had a tremendous run. I have been in here, unbelievable run. My target based on the underlying fundamental also was 2500. We are there right now so what are the risks to look for . Either if you are long or waiting for a pullback. Three risks to the rally. Number one, if you see transactions bargains fall, thats a problem for bitcoin the entire process is a net effect. That could mean a lower price for bitcoin. Number two, competition from other Digital Currency. There is more than one bitcoin. All of those, those two do Something Different than bitcoin