Podcast Summary: CNBC's Fast Money

Episode: Cracks In Homebuilder Foundation Grow… And De-Dollarization Drama
Date: October 9, 2025
Host: Melissa Lee with Tim Seymour, Dan Nathan, Guy Adami, Mike Wilson (Morgan Stanley), and guest Stephen Kim (Evercore ISI)

Episode Overview

This episode digs into some of the biggest stories rattling markets: the persistent sell-off in homebuilder stocks and the growing talk of “de-dollarization” as central banks reduce their US Treasury holdings. The panel examines whether anything can turn the housing sector around, assesses the drivers of dollar weakness, and covers dealmaking in the pharma sector, as well as key consumer trends revealed by teen spending surveys.

Key Discussion Points & Insights

1. Homebuilders: "Bearish Across the Board"

[01:52–16:52]

• Sector Sell-Off:
  Homebuilder stocks, tracked by the XHB ETF, are down sharply—double-digit declines for many large names and the worst week of the year, despite mortgage rates falling from recent peaks.

• Key Drivers:

  • Dan Nathan [02:20]: “It’s a washout in the space… The Trump administration seemingly has a bullseye on their back. That’s not helpful. But I think it’s an employment thing as well. It’s also an inventory thing… You're starting to see inventory builds in some really interesting places. And I think that's going to put pressure on pricing.”
  • Mike Wilson [04:16]: Raised the structural profitability problem and flagged margin destruction and the effect of tariffs: “Now new home prices are actually cheaper than existing homes. That’s the first time we’ve seen that. So there’s a structural profitability problem in this industry because of costs and so lower rates is not going to help their profitability.”

• Broader Dynamics:

  • Buyers, squeezed by high rates and waning demand, are less responsive to incentives like mortgage buydowns.
  • Government policies aimed at supply-side fixes may further compress margins, with Evercore ISI's Stephen Kim highlighting a looming regulatory risk (see below).

• Home Improvement and Related Plays:
  Some see value in battered home improvement stocks like Home Depot, which “is a margin story” rather than pure housing exposure (Tim Seymour [05:25]).

Guest Segment: Stephen Kim, Evercore ISI [07:55–13:59]

• Regulatory Overhang:
  “The administration was going to aggressively pursue supply side solutions to affordability, which is really the worst possible thing that the builders could hear… We don’t actually have a supply problem right now. If they had gotten builders to build a lot more maybe three or four years ago, that would have been different. But today you're now slamming the gate shut when the horse has already left the barn. We don’t have enough demand.” [07:55]

• Near-term Downside, Long-term Potential:

  • "We think that having the administration focus on supply side, as opposed to mortgage spreads… that's a problem and I think it's unfortunate for the builders."
  • On multipliers: “We've actually had a multiyear call here where we say that… the builders deserve and will get a revaluation to higher multiples… But unfortunately you cannot disregard what the government and the administration is seeking to do here.”

• Possible Recovery Triggers:

  • Mortgage rate portability and tightening bond spreads could help, but logistical and structural challenges remain.

• Bull and Bear Arguments (Panel Recap):

  • Bullish cases rely on a turnaround in demand, possibly from lower rates, pent-up demand, and improved operating leverage after years of cost discipline.
  • Bearish short-term view prevails, with further near-term downside expected amid exogenous regulatory risks.

Memorable Moment [05:44]:

Lighthearted banter about “spackling” vs. “pasting” stocks, with Tim Seymour quipping: “You can't spackle. You can’t spackle. You’re in trouble!” (Laughter).

2. Delta Air Lines Earnings & Airlines Sector

[17:00–19:35]

• Earnings Beat:
  Delta shares surged on strong profit and guidance, driven by rising airfares and luxury travelers.

  • Tim Seymour [17:31]: “Ed Bastian has done an amazing job. This is the one that I think is actually going to rerate… They’re doing this out of four main hubs, which means they're doing it a lot more efficiently than they've ever done before. So I am a Delta bull. I stay long.”
  • Dan Nathan [18:29]: “60, where to get this like 65 or so. I mean, that’s not unreasonable to think just on valuation and just on momentum.”

• Broader Macro:
  Mike Wilson cautions: “Travel is one of the three areas that is going through the recession now… I'm not sure I'm ready to dive in here because I do think that the consumer services area, travel is one of the three areas that is going through the recession now." [18:49]

3. Pharma Dealmaking & Health Care Sector

[21:51–25:10]

• M&A Flurry:
  Novo Nordisk’s $5.2B takeover of Akara Therapeutics caps a wave of dealmaking—Pfizer, Roche, and Merck also active.

  • Mike Wilson [22:14]: “Not just for defensive reasons… we looked ahead, we said, okay, two things. Rates are coming down—it’s usually good for M&A activity as well as the biotechs in general… These stocks literally are as cheap as they’ve ever been on a relative basis.”
  • XLV (health care ETF) outperforming the SPX YTD.

• Valuation Case:

  • Dan Nathan [22:53]: “Bristol Myers earned $6 a share. You put a 10–11 multiple on it… Merck $10 a share, 12 multiple… and that’s with the patent cliff factored in.”

• Would You Rather: XLV or XBI?

  • Dan Nathan [24:25]: Chooses XBI (“I think it’s just the tip of the iceberg. A lot of these companies with patent cliffs are going to have to do something now.”)

  • Mike Wilson [24:55]: “The whole M&A thing we’ve been waiting for is now starting. I was very skeptical on that last year and now we're finally seeing it… that’s the juice for biotech.”

4. Jefferies and the First Brands Bankruptcy: Credit Cycle Concerns

[26:17–30:06]

• Credit Exposures in Focus:

  • Jefferies has $715M in exposure after First Brands' bankruptcy, prompting Justice Department scrutiny.

  • Systemic risk? Panel downplays but monitors:

    • Mike Wilson [28:14]: “We don’t think this is a systemic issue. It is an idiosyncratic issue for the banks that have these loans… we’ve been in an expansion for quite a while. I don't think we're into the final stages of a credit cycle where it becomes a systemic downturn.”

  • Lending standards have loosened, and there’s “a ton of money chasing certain types of either leveraged finance, private credit…” (Tim Seymour [28:37]).

  • Spotlight remains on alternative managers and private credit risk.

5. De-Dollarization & Global Central Bank Moves

[32:36–39:04]

• Central Banks Reduce US Treasury Holdings:
  The amount held at the NY Fed reached the lowest level in over a decade, gold reserves now outpacing Treasuries.

  • Kathy Lean [32:38]: “This is a deeper issue… tariffs and geopolitics have been a big part of the story. And this has pushed a lot of central banks to think twice about what kind of assets they want to hold… Central banks are starting to look for ways to diversify and protect themselves from US policy risk.”

  • Melissa Lee [33:21]: “At the same time, we have a Treasury market that’s pretty stable. So how do you reconcile the two?”

  • Kathy Lean [33:27]: “The extreme level of the deficit… Treasuries are no longer seen as as true of a risk-free asset as they may have been, you know, a decade ago… central banks are not necessarily rejecting the dollar, but they don't want to be overexposed to it.”

• Longer-Term Impact:

  • Weaker dollar may be policy, but could present long-term challenges for borrowing costs and dollar dominance (Dan Nathan/Kathy Lean [34:04–34:58]).
  • Not just dollar aversion—central banks seek diversification, especially post-sanctions environment (gold reserves overtaking Treasuries for the first time since 1996).
  • Tim Seymour [36:08]: “The number one culprit of de-dollarization is China… the more gold reserves they have, the more legitimate that currency is. Is this really about China?”

• Geopolitics & Sanctions:

  • Panel flags the risk that US seizure/freezing of dollar assets (e.g., Russia) is driving moves by other countries to diversify reserves.

6. Rare Earths, China, and U.S. Policy

[40:33–42:19]

• China's Export Curbs:
  • Rare earth stocks jump as China tightens export controls—market reads this as pre-summit posturing ahead of Trump/Xi talks.
  • Tim Seymour [41:03]: “China’s got a ton of leverage in terms of rare earth and they've dangled it and they've pulled it back and they've actually played nice. But again, like so many parts of this China negotiation, we don’t have a deal.”
  • Mike Wilson [41:51]: “They're selling us magnets for industrial uses. Where they're not selling it is military… We really can't go to war if we wanted to without the military grade rare earth.”

7. Consumer/Teen Spending Trends: Lululemon, Nike, and Changing Tastes

[42:55–45:25]

• Piper Sandler’s Survey:

  • Teen spending down 6% YoY; athletic wear remains popular, but market share of athletic brands falling—“lowest since spring of 2020.”
  • Nike and Lululemon see reduced preference, though Nike still leads.
  • Lululemon sales and mindshare slipping; founder Chip Wilson’s public critique likens the company to a “plane crash” but still offers suggestions ([Courtney Reagan, 44:25]).

• New Entrants:

  • Brands like Alo and Vuori may be gaining, but aren’t top-tier yet.

Notable Quotes & Timestamps

• "It’s a washout in the space… All these names—they all topped out last fall, rolled over this spring, and now they're starting to roll. I think it's an employment thing as well. It's also an inventory thing."
  — Dan Nathan, 02:20

• “Now new home prices are actually cheaper than existing homes. That's the first time we've seen that. So there's a structural profitability problem in this industry because of costs and so lower rates is not going to help their profitability.”
  — Mike Wilson, 04:16

• “The administration was going to aggressively pursue supply side Solutions to affordability, which is really the worst possible thing that the builders could hear.”
  — Stephen Kim, 07:55

• “If the Fed figures it out and slashes rates, these stocks are going to work. Whether or not the fundamentals justify, they're going to get way in advance of it. That's the bullish view.”
  — Mike Wilson, 15:19

• “You can't spackle. You can't spackle. You're in trouble!”
  — Tim Seymour, 06:00 (light-hearted moment)

• “This is a deeper issue… tariffs and geopolitics have been a big part of the story. And this has pushed a lot of central banks to think twice about what kind of assets they want to hold… Central banks are starting to look for ways to diversify and protect themselves from US policy risk.”
  — Kathy Lean, 32:38

• “China’s got a ton of leverage in terms of rare earth… If you're talking about military grade rare earth, we really can't go to war if we wanted to without it.”
  — Mike Wilson, 41:51

Timestamps for Key Segments

| Topic | Start | End | |---------------------------------------|-------|-------| | Homebuilder Meltdown | 01:52 | 16:52 | | Delta & Airlines Earnings | 17:00 | 19:35 | | Pharma M&A/Healthcare Sector | 21:51 | 25:10 | | Jefferies Bankruptcy Risk/Credit | 26:17 | 30:06 | | De-Dollarization Drama & Gold | 32:36 | 39:04 | | Rare Earths and US-China Dynamics | 40:33 | 42:19 | | Teen Spending, Lululemon/Athleisure | 42:55 | 45:25 |

Tone and Style

• Fast-paced, candid, and at times humorous, with traders openly challenging each other's views and making finance accessible (“spackling” vs. “pasting” banter).
• Insightful and actionable—always focused on what matters for active investors.

Takeaways

• Housing stocks remain under extreme pressure, with both cyclical and regulatory headwinds. Demand, not just rates or supply, is the main problem.
• De-dollarization is accelerating, fueled by tariffs, US sanctions, geopolitical risk, and the rise of gold as a reserve—and China is a major driver.
• Pharma/health care is seeing renewed investor interest, both for M&A-driven upside and relative value after a sharp selloff.
• Teen spending data and rare earths supply chains remain important for forecasting consumer and geopolitical risks.

This summary captures the intense, action-oriented energy of "Fast Money," synthesizing all the market-critical debates, memorable quotes, and sharp-witted moments investors need to know.