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Monday, 25 Jun 2007 | 8:55 PM ET

In Monday’s Sector Trade - the rental car trade. Morgan Stanley is taking down the entire space with downgrades right at the top of the summer driving season. Should you be buying or selling?

Jeff Macke says rental car companies have rising expenses and no real pricing power. He explains that the auto industry is no longer offering companies, such as Hertz (HTZ) and Avis (CAR),fleet sales and that, Jeff says, bodes well for General Motors (GM) and Ford (F).

Jeff thinks the trade is to get incrementally more bullish on car makers and sell the rental companies.

Sector Trade: Rental Cars
The Fast Money guys take a look at rental car companies

Guy Adami adds that investors should get into Johnson Controls (JCI), Goodyear Tires (GT) Cooper Tires (CTB). On a related note, Guy thinks Ford (F) might have a 10-handle on it soon. (It’s worth nothing Ford closed at $9.03 on Monday June 25th)

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Trader disclosure: On June 25 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders:Najarian Owns (.VIX), (TIF) Bolling Owns (SZE), (VE), Gold; Bolling Is Short (FXI) And Owns (FXI) Puts; Bolling Is Short S&P Futures; Bolling Is Short Nasdaq Futures; CNBC Is A Service Of NBC Universal And Dow Jones; GE Is The Parent Company Of CNBC

  Price   Change %Change
GT
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CTB
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JCI
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GM
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HTZ
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