Cracks In Homebuilder Foundation Grow… And De-Dollarization Drama 10/9/25

Summary

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.

Transcript

[Melissa Lee]

Hey Fidelity, what's it cost to invest with the Fidelity app?

[Courtney Reagan]

Start with as little as $1 with.

[Melissa Lee]

No account fees or trade commissions on U.S. stocks and ETFs.

[Tim Seymour]

Hmm.

[Melissa Lee]

That's music to my ears. I can only talk.

[Tim Seymour]

Investing involves risk, including risk of loss.

[Stephen Kim]

Zero account fees apply to retail brokerage accounts only $0 commission applies to online.

[Tim Seymour]

US equity trades and ETFs and retail fidelity accounts Sell order assessment fee not included.

[Stephen Kim]

Some account types and securities excluded. [e-mail] commissions Fidelity Brokerage Services LLC Member.

[Mike Wilson]

NYSE SIPC.

[Melissa Lee]

Introducing the redesigned Dell PC with the Intel Core Ultra processor. It helps you handle a lot, even when your holiday to do list gets to be a lot like organizing your holiday shopping in responding to holiday requests and customer questions and customers requesting custom things. Plus planning the perfect holiday dinner for vegans, vegetarians, pescatarians and Uncle Mike's carnivore diet. Luckily, the Dell PC helps you handle a lot and with all day battery life, you can do it all faster to get it all done. That's the power of a Dell PC with Intel inside. Get [e-mail] holiday live in the NASDAQ marketsite in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. A builder bummer. The housing sector has been coming under steep pressure for the past month and is facing its worst week of the year. Is there anything that can turn this group around? Now we'll debate that and the de dollarization drama. Global central banks reducing their holdings of greenback denominated debt. What signal does that send and what could it mean for the markets? Plus the Delta shares take off after earnings. Another round of dealmaking in the health care space and Lululemon goes under, goes loses ground. Excuse me. Among the cohort in the latest Piper Sandler survey. Can anything say the struggling athleisure brand? I'm Melissa Lee. Come to you live from Studio B at the nasdaq. On the desk tonight, Tim Seymour, Dan Nathan, Gai Adami and Mike Wilson, CIO and chief US Equity Strategist at Morgan Stanley. Welcome to you Mike.

[Stephen Kim]

Thank you.

[Melissa Lee]

And we start off with the latest headache for the housing sector. The XHB Homebuilder ETF dropping another 2% today, hitting its lowest level in over two ECB Construction ETF on pace for its worst week of the year and some of the biggest names in the space down 10% or more since Monday. And while mortgage rates are down from their highs of the year, they remain stubbornly stuck above 6%. So is there anything other than a major move lower in rates that could get builders climbing again? Guy, what do you say?

[Dan Nathan]

I think it's a washout in the space and you're starting to see it now. We've talked about this. All these names, Dhi, Pulte Homes, Toll Brothers, they all topped out either October or November of last year. They all sold off in April like everything else did. But the bounces they all enjoyed were nowhere close to the prior all time highs. Now they're starting to roll and there are a couple of reasons. I think 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. I mean their invent, listen, real estate is regional, I get it. But if you look across the country, you're starting to see inventory builds in some really interesting places. And I think that's going to put pressure on pricing which subsequently puts pressure on these stocks.

[Melissa Lee]

Remember Diana? Oh look was at a housing conference maybe three weeks ago or so. One thing that really stuck out in her reporting was that builders are buying down an average 100 basis points in mortgage rate. So by that math at that time, you know that's, you're getting down sub five and a half percent. So if we have to wait for rates to clear that mark, that's a long ways from here.

[Tim Seymour]

Well and it's, it's margin destructive. And nice having Mike here because I know he's got some theories about corporate margins in general in the big picture what may be happening in the housing market. Especially because the, the stuff that guy is referring to from the White House, if they're talking about supply side and they're throwing margins out the window, then you have a dynamic here of buying out mortgages. I would also just add that haven't we already seen the housing market get this rally on lower rates? I mean that to me is what it was on the second spike of this double top that I think you're selling and continue to sell here. So I don't think you need to chase it. The one thing that's kind of interesting, we had our conversation about Datacenter last week and it's kind of cool that in the XHP you have some of these data center plays that are the H Vac plays that have traditional been in residential housing. So a train, a carrier, some of those names that are actually some of that data center infrastructure build out and they're kind of interesting so take a look at those. But I'm not sure you want the housing part.

[Melissa Lee]

Yeah, the cooling names of the havoc.

[Tim Seymour]

Pretty cool.

[Melissa Lee]

The data center are very interesting. Is it the consumer here that we're, I mean what, what's happening?

[Mike Wilson]

No, this is a, this is a structural problem in the housing industry. And this by the way maybe the first sign that we're going to see some tariff implications on earnings. Right. So the tariff, I mean the higher cost is what's killing the homebuilders. Don't forget the homebuilders took a lot of share from the existing home market because different. No supply.

[Tim Seymour]

What was that you said took a lot of share? And it sounded like, well you would never do that on cable tv.

[Mike Wilson]

But at the end, at the end of the day, I mean they've been discounting and 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. I like the housing space but the home improvement sector on activity picking up if rates come down.

[Dan Nathan]

Yeah.

[Mike Wilson]

Labor is probably somewhat of an issue.

[Dan Nathan]

There too when you think about that. So you have the double whammy of just increased input costs and then labor.

[Mike Wilson]

You know, it's worth noting 30 year fix as you said Mel, is that, you know, one year low, it's at 6.3%.

[Dan Nathan]

Well that's where it was last October.

[Mike Wilson]

Right.

[Dan Nathan]

Like the same level here. And the fact that the ITB is down 20% from, from those all time highs, it tells you that there's something.

[Mike Wilson]

Else going on here.

[Tim Seymour]

Yeah, I just really quickly it's interesting because Mike's talking about the home improvement and that dynamic Home Depot has been pasted too with the group. I'm not and I actually like Home Depot. I think these are levels both on the stock somewhere. Certainly 350 is a good level of support. But I think the valuations and the numbers we've gotten from Home Depot tell you they are a margin story. That's helpful.

[Dan Nathan]

You could have said spackled.

[Mike Wilson]

Spackle.

[Melissa Lee]

That's a good one.

[Stephen Kim]

Done. Spackle.

[Dan Nathan]

Because the people may not know what pasted.

[Tim Seymour]

Pasted stock.

[Dan Nathan]

425 down to 377.

[Tim Seymour]

That's have you before.

[Dan Nathan]

You know what you say that thinking that I have not spackled.

[Melissa Lee]

Who hasn't spackled?

[Dan Nathan]

Who has.

[Tim Seymour]

You can't spackle. You can't spackle.

[Mike Wilson]

You're in trouble.

[Tim Seymour]

My people, my people.

[Melissa Lee]

Don't spackle your people Meeting.

[Stephen Kim]

What are your people?

[Tim Seymour]

Be careful.

[Dan Nathan]

The tribe real quick. I mean a name like Mohawk Industries for example, I mean take a look at MHK which made its all time high in 2017. And so that's some bounces along the way. And these are the names I think Mike is talking about some of these names that get bombed out. And then if rates were to go lower, you look at some of these names. But I don't think we're there yet.

[Melissa Lee]

So basically everybody here is bearish.

[Mike Wilson]

Well, it depends what happens. Existing supply. So if you, if you get existing home supply out now they have talked.

[Melissa Lee]

About a Housing rates would have to come down.

[Mike Wilson]

Well, or maybe mortgage portability or they could do something structurally. You know, don't rule anything out with this administration. If they say something about housing affordability, there's probably something coming.

[Tim Seymour]

Take your mortgage with you.

[Mike Wilson]

Yeah, something like that. And then you get, you get, you actually get supply prices down. Activity then leads to more activity in the, in the, in the home improvement space.

[Dan Nathan]

Have you guys seen Whirlpool?

[Mike Wilson]

Maybe they can pull that up 70% from 2021 highs.

[Dan Nathan]

It's about to make new multi like five seven year lows or something like that. I mean where does that come in?

[Melissa Lee]

Washed out.

[Tim Seymour]

I like it. I like washed out.

[Dan Nathan]

See what you did there?

[Melissa Lee]

How did you.

[Stephen Kim]

I do laundry guy.

[Dan Nathan]

You do a lot of laundry. Can I tell you something?

[Tim Seymour]

I get in trouble.

[Dan Nathan]

No, I mean we have time because I try to do a load of laundry.

[Melissa Lee]

Sure. It's 5:06. We got the whole hour. Go ahead.

[Tim Seymour]

Why a load of room?

[Melissa Lee]

Say what you want to say because.

[Dan Nathan]

Then you don't let it pile up until the weekend.

[Melissa Lee]

I give you 30 seconds.

[Dan Nathan]

Yeah. And by the way, you want to wash with cold water and don't use as much detergent as you think. Less is more in the detergent.

[Mike Wilson]

Mike comes in here once it cools.

[Melissa Lee]

Morgan Stanley is appalled by the company's keeping. I'm going to actually fold her just to be anyway. Okay, let's move on. Our next guest, Dan downgraded six homebuilder stocks earlier this week. Evercore ISI Stephen Kim joins us now. He is the firm's head of housing research. Stephen, great to have you with us. So is it more than just a rates problem for the homebuilders at this point?

[Stephen Kim]

Oh yes. So a big part of our downgrade on Tuesday morning was our understanding that the administration was going to aggressively pursue supply side Solutions to affordability, which is really the worst possible thing that the builders could hear. And I think that FHFA Director Pulte has been very clear and increasingly clear in his tweets and interviews about what it is that he's looking for. And the administration seems to believe that we have a national housing deficit because we didn't build enough homes. The deficit is why home prices are so high and that housing has become unaffordable. Higher home prices are also contributing to inflation because the shelter component of CPI is high. And so, and then they look at the builders and they say, these builders are deliberately building fewer homes than they could. They're posting strong profitability and cash flow and buying shares back. And they say, well, look, if the builders could produce more homes at lower prices, homebuyer affordability gets better, inflation gets better, employment will improve. And they believe that new home prices can decline, you know, even without dragging down existing home prices, which by the way, has kind of been happening as well. So there's a lot of truth in what they say. At the same time, it misses something critically important, which I think the builders are really hoping that they recognize, which is that we have a demand problem right now. I think you all have been talking about that. We don't actually have a supply problem right now. If they had built, if they could have 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 horses already left the barn. We don't have enough demand. And so I think that having the administration focus on supply side, as opposed to mortgage spreads, I think that's a, that's a, I think that's a problem and I think it's unfortunate for the builders.

[Tim Seymour]

Stephen? Yeah, it's certainly a problem for margins, it sounds to me. And to think one or two steps down the road at a time when we have heard the White House aggressively, you know, target certain parts of certain industries. If we can look past this. What I was reading between the lines on your notes is that you actually think that the multiple for the sector should go higher based upon the prudence and the approach they've had towards capital allocation, especially after a difficult period of demand. Is that, is that fair?

[Stephen Kim]

100%. So we've actually had a multi year call here where we say that, you know, I should say over the next few years, we believe the builders deserve and will get a revaluation to higher multiples than they have historically received. And our, our. The basis for that is that if you look at how much the builders have improved their operations, if you look at how they have become more asset light, they have have more competitive advantages relative to their smaller peers. And so we look at all they've done and they've delevered significantly that these are companies that frankly if you compare them on cost, almost any metric that matters relative to their S and P peers, I mean they outperform them but they traded a fraction of what the other peers trade. So we think that that's going to change. And we'd say by the way, there's a builder out there in the wild called NVR that's already done this and the other builders are sort of following the footsteps. So we actually think that the builders are looking really good from a multi year perspective. But unfortunately you cannot, you cannot disregard what the government and the administration is seeking to do here. And in the near term it's going to be, we think a depressant on the builder stocks.

[Dan Nathan]

So, so along those lines you downgraded, I think Dhi, Pulte Homes, Toll Brothers, if I'm not mistaken, to in line from outperform. But the price targets you have, although cut are still higher than these stocks are trading. My question is what's the next leg lower in terms of price on your horizon if in fact you have to go from in line to underperform or whatever the next one down is.

[Stephen Kim]

I think it's fair to say that the basis for our downgrade and we moved everything we cover from that was a buy to a neutral. We have no buys in the space and we basically earlier this year had all the builders buy. We were probably the biggest bull on the space. The basis for our downgrade was this. The risks that were becoming very clear, these exogenous risks coming from the administration. We don't fully know what those, how those are going to play out. We're just getting a taste of it now. And so therefore depending on how this, how severe these changes that they're seeking to make with the builders actually are, that could change, you know, the outlook for the earnings and the price targets as well. But we took a first swag at it based on limited information. What we knew is that it was going to be big, it was going to be important and then investors were not ready for it that we knew. And so we acted on that. And you know, and I long term I still like the group, like I said, but certainly we'll be watching this situation as we go forward and we'll adjust our Price targets as we need to.

[Melissa Lee]

So Mike Wilson here just a few minutes ago suggested, you know, maybe if mortgage portability were an option, that could be a different story and he could be more bullish on, on the sector. How would that impact the sector in your view?

[Stephen Kim]

Well, there's a number of things that the administration could theoretically go after that would be helpful from a demand perspective, because I do think that's the core of the problem. And so something, like I said, tightening the mortgage spread would be something that would be helpful. The FHFA director also has the power to lower fees that Fannie Mae and Freddie Mac charge. And so that could actually lower borrowing costs as well. Mortgage rate portability would be great. I will remind you that actually FHA loans are already portable. The problem is, is that the people who have those low rate mortgages have seen the home prices rise. And so the mortgage is not, doesn't cover enough of the home price. And the people who use FHA mortgages don't tend to have a ton of money lying around. And so the reason why you haven't heard about this portability is the fact that you can't actually get too many people to cough up that much of a down payment so that they can actually take on that mortgage. So. So it gets a little complicated, obviously, but portability is an interesting idea. It's complicated. I'm not hanging my hat. I'm not waiting around for that, unfortunately.

[Melissa Lee]

All right, Stephen, great to speak with you. Thanks so much.

[Stephen Kim]

Yeah, likewise. Thanks.

[Melissa Lee]

So you got a bunch of bears on housing, basically. That's the bottom line.

[Dan Nathan]

It looks bullish.

[Mike Wilson]

Go ahead.

[Dan Nathan]

No, I'm just, I'm going to throw it out to you guys, like, what's.

[Mike Wilson]

The bullish argument right now?

[Dan Nathan]

I think the bullish argument is the unemployment rate stays where it is and the economy is okay. The economy's okay. That rates actually moderate and maybe start to sink lower for the right reasons, not the wrong reasons. And you know, again, people start to feel empowered where they can buy a new home for the first time in a while and pricing comes. But that's, I don't, I don't think we're close to the economy. Okay. Last year we had 100 basis points of fed funds cuts.

[Melissa Lee]

We do see though, whenever there is a tick lower in mortgage rate, you do see activity go up. You see mortgage apps go up. You see, you know, refinancings go up. Everything goes up a little bit. People jump on that.

[Mike Wilson]

I mean, look, you said something earlier, which is true, which is that the stocks kind of traded the rate cuts in advance twice first last fall and this year. So there's a little bit of a trade. It got payback. But you know, to the core question like, like why would, why would you get bullish here? I don't think the economy was strong last year. That's been our, it's been my view for two years. We've been in a private economy recession and if I'm right that we had the end of that rolling recession was in April. We're now into an early cycle economy and all we're waiting for is the Fed to figure it out and start slashing rates. If that happens, 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. I think that's going to happen maybe later this year, probably early next year.

[Tim Seymour]

And that would be my argument for, I guess, you know, we talked about let me be a whirlpool bull for a second because I'm not going to necessarily die on this hill. But we priced in three and a half years of whirlpool and we priced in Covid.

[Dan Nathan]

Pull forward.

[Tim Seymour]

We pulled forward. The lack of brand loyalty. This is a company with a 5% dividend yield. They have a great small appliance business in the U.S. i think it's been largely grounded. There has been innovation there. So they've actually delivered a bit and they're selling off pieces of pieces around the world like an India stake that I think are going to help that balance sheet and support that dividend. So I think there are places you can play in here. And again, train carrier parts of the housing space that are not necessarily the home builders.

[Melissa Lee]

I think they look great in terms of delevering though. I thought it was interesting what Stephen was saying how these homebuilders have really gotten lean and mean during this downturn. They were forced to take a look at their businesses, right. And delever and improve their balance.

[Mike Wilson]

And that's a theme that we're seeing everywhere you think about. There's been a three year recession in a lot of parts of the economy, housing just being one example. And these companies, these American companies are really good at cutting costs and they've been doing that. So if you get any kind of volume increase, don't forget total home sales are where they were post gfc. Post gfc. So don't tell me there's not pent up demand. There is. You just can't afford it. So once that starts to get unleashed, whether it's in this area or in consumer goods where companies have gotten leaner and meaner. And by the way, AI is now going to allow them to do more with fewer employees. You could see some pretty good operating leverage in these areas that are beaten up. That's the bull case for these laggard areas.

[Dan Nathan]

Listen real quick, that is a bull case. And as Mike and Tim said, they'll sniff this out long before. I just don't think we're there yet. I think there's another leg lower in these names.

[Melissa Lee]

Meantime, Delta flying higher today after beating profit estimates and giving a better than expected forecast for the rest of the year. The company citing rising airfares and a resilient luxury traveler. CEO Ed Bastian also joined our Filibo earlier today with his thoughts on the government shutdown impact.

[Dan Nathan]

Today. There's no cause for concern.

[Mike Wilson]

I would say that if this doesn't get resolved, say beyond another 10 days or so, you probably will start to see some impact.

[Melissa Lee]

Is this the kind of thing that investors look through? Tim, I'll go to you because you.

[Tim Seymour]

Always trade the airlines, I think for airlines. You do. I think airlines get quick headline dynamics around storms, disruptions and holiday things. But, but ultimately the most important thing for airlines, for the investor community, the analyst community for sure, is what's going on with the margin profile. Are they being efficient? Are they putting out too much capacity at the wrong time at the top of the cycle? And what you hear from Delta, Ed Bastian has done an amazing job. This is the one that I think is actually going to rerate and I think should re rate and I think it takes every quarter, it seems like the last five quarters. They've reported, they've reaffirmed, they've given it. They gave a guide in September that told you they were going to do this. And they're doing it. And 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. I think it hasn't taken back what it lost the stock from that April period in Liberation Day, airline stocks got killed. And Delta hasn't really. It's nibbled back at the $60 level. I think it goes through.

[Dan Nathan]

Yeah, I'm with tim. I mean, 60, where to get this like 65 or so. I mean, that's not unreasonable to think just on valuation and just on momentum. And you know, they said it today, they're focused on the premium seat. And in that space, they're beaten everybody else. So this stock should trade higher.

[Melissa Lee]

This is probably the poster child of the company that has remade itself in difficult times over and over and over again.

[Mike Wilson]

I mean, airlines are known for that, right? And this is an early cycle area. So I think it is a tradable stock. I mean, these are rentals. I mean, just me. They're always best trading stocks in the market 100%. And you have to understand that. So 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. And you see it in some of the data, like Vegas is pretty slow.

[Tim Seymour]

Government has been tough.

[Mike Wilson]

Government's in a recession. Okay. Capex just came out of their many recessions. So it's like this is one of the later ones to kind of recover. I think it's worth noting, and we.

[Dan Nathan]

Talk about this a lot. I mean, the stock gapped up nearly 10%. The high tick on the day was basically the opening tick and the low of the day was the closing tick.

[Stephen Kim]

So it's interesting that investors sold into.

[Dan Nathan]

This move, especially when you consider the fact into the print.

[Mike Wilson]

Over the last month, the stock was down about 12%.

[Melissa Lee]

Coming up, dealmaking in the pharma space. Novo's new CEO is making a splash at the company's latest acquisition. Is there more merger mania coming for the space? Plus, Jefferies feeling the pressure after an auto parts company collapsed into bankruptcy last month. What the bank's debt exposure could mean for the stock. Don't go anywhere. Fast money is back in two.

[Tim Seymour]

This is Fast Money with Melissa Lee.

[Stephen Kim]

Right here on CNBC.

[Tim Seymour]

This ad is only 15 seconds.

[Mike Wilson]

In that amount of time, there are.

[Tim Seymour]

Likely to be an average of over 15,000 cyber threats to all businesses. So there's no no time to wait. Get threat ready with comcast [e-mail] cybersecurity.

[Stephen Kim]

This episode is brought to you by Square. Every business is unique, and Square is a platform designed to help them move forward. Whether launching a new location, introducing fresh offerings, or reaching more customers, Square serves businesses of every kind. From the corner ice cream shop that grew into a chain to the stylist at your local salon. And whether you're selling apparel, running a coffee shop, offering services, booking appointments, or a mix of them all, there's a square point of sale to match your needs with modes customized to your business. Like if you're in retail mode, you'll get deeper inventory tools and if you're using quick service for your restaurant, you'll find quick order entry. You can even mix and match by using different settings for different parts of your business or different locations. Go to square.com go fastmoney to learn about how your business can grow with square. That's sq U-A-R-E.com go fastmoney if you're a smoker or dipper ready to make a change, you really only need one good reason. But with Zynn Nicotine Pouches, you'll discover many good reasons. Zynn is America's number one nicotine pouch brand. Plus Zynn offers a robust rewards program. There are lots of options when it comes to nicotine satisfaction, but there's only one Zynn. Check out zyn.com find to find Zynn at a store near you. Warning. This product contains nicotine. Nicotine is an addictive chemical.

[Melissa Lee]

Welcome back to Fast Money. Shares of liver disease drugmaker Akara Therapeutics surging today. Novo Nordisk agreeing to buy the company for up to $5.2 billion as the Danish company's new CEO looks to spur growth. It's just the latest in a flurry of dealmaking in the pharma space. Pfizer, Roche, Merck all announcing deals in the last few months. And Mike has recently turned bullish on the health care space, the first time in many months.

[Mike Wilson]

Quite a while. Yes, and not for just defensive reasons. For a change. Usually when you go health care, it's just like pure defense. I mean, look, the stock got absolutely walloped. Everybody was so concerned about RFK coming in, what was going to happen. So I think, you know, we looked ahead, we said, okay, two things. Rates are coming down. It's usually good for M and A activity as well as the biotechs in general. And we're seeing some of that now. And also the announcements that were made, the most favored nation pricing and the deal with Pfizer, it's just not as onerous as people were fearing. So these stocks literally are as cheap as they've ever been on a relative basis. We had a 7% move last week in the group. I think it continues.

[Melissa Lee]

XPI has outperformed SPX year to date. I mean, that's a major milestone for this group.

[Dan Nathan]

I think that potentially could continue because there's some M and A chatter around that. I mean, think of it. Look at a name like insmed, by the way. We've had the CEO on twice. Look where that stock closed today. So I think we've done a good job sort of bringing some of these to light. I'll say this though, just on a valuation basis. If you want to play a little stock market, Bristol Myers earned $6 a share. You put a 1011 multiple on it. You talk about a 65 to $72 stock, Merck $10 a share, 12 multiple, $120 stock. And that's still a discount to an Eli Lilly and it's still a significant discount to the broader market. And that's with the patent cliff factored in. So I like the space as well.

[Melissa Lee]

And of course that's a great segue for Tim's Pfizer.

[Tim Seymour]

So you won from one value trap to another. I mean, you know, maybe, but, but I'll. As we're all saying about the health care space, there's been the macro, the White House dynamics, but also the M and A Dynamics that is also just this perpetual. We've got to continue to think about tomorrow's pipeline. XLV was basing around the 200 day is now breaking higher J and J, which I'm along and I really like. And there was some news around litigation that didn't knock the stock down at all because it focuses on the fact JJ is a company that generates $20 billion of free cash flow a year. And it's seemingly the worst of the talc. Litigation is 9 billion. It's an overhang. But you can see this stock has been breaking out to all time highs every day seemingly for the last couple of weeks. I think you stay there.

[Melissa Lee]

Well, here's a. Would you rather.

[Dan Nathan]

I love this game, Mike. We play a game called would you rather you have to make a choice.

[Melissa Lee]

Familiar with this show. He knows, he's been on the show.

[Dan Nathan]

That's a good point.

[Melissa Lee]

Many times in the past. XLV or xbi.

[Dan Nathan]

Wow. I like what you did there. I think xbi, if you're more specific, if you're forcing me to choose, I think xp, I haven't looked at both of them that closely, but off the the top of my head, I'll take SBI for 500. Melissa?

[Melissa Lee]

Yeah. You believe in the dealmaker?

[Dan Nathan]

I do. I absolutely.

[Melissa Lee]

Three weeks.

[Dan Nathan]

I absolutely believe in the dealmaker. I think it's just the tip of the iceberg. And a lot of these companies that have patent cliffs are going to have to do something now. Maybe with the Trump administration off their back. It, it sort of allows them to do these deals. But yes, I think deals are coming end of this year, early next year.

[Mike Wilson]

Absolutely. I mean, I think that the whole M and 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. So that's these stocks trade off of that. I mean, that's like the juice for biotech.

[Tim Seymour]

And that's not defense, that's offense. Yeah, that's the difference between those two.

[Melissa Lee]

Also, there's a lot more fast money to come. Here's what's coming up next.

[Mike Wilson]

First brands fall out how an auto.

[Stephen Kim]

Parts bankruptcy is stalling out one investment.

[Mike Wilson]

Bank and the hazard lights being flashed for shareholders. Plus is dollar dominance at risk.

[Stephen Kim]

What it means that global banks are shifting their assets out of the US.

[Tim Seymour]

Currency and the it could have on global markets.

[Mike Wilson]

You're watching Fast MONEY live from the.

[Stephen Kim]

NASDAQ market site in Times Square.

[Mike Wilson]

We're back right after this.

[Stephen Kim]

If you're a smoker or dipper ready to make a change, you really only need one good reason. But with Zyn nicotine pouches, you'll discover many good reasons. Zyn is America's number one nicotine pouch brand. Plus, Zyn offers a robust rewards program. There are lots of options when it comes to nicotine satisfaction, but there's only one Zyn. Check out zyn.com find to find Zyn at a store near you. Warning this product contains nicotine. Nicotine is an addictive chemical.

[Melissa Lee]

What made you confident that you could do something that hadn't been done before?

[Tim Seymour]

I have no fear of failure.

[Melissa Lee]

Trailblazing women, changing the game.

[Courtney Reagan]

One of my favorite pieces of advice, think about what your boss's boss needs.

[Melissa Lee]

Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players New episodes every Tuesday, wherever you get your podcasts. Welcome back to FAST money. Shares of Jefferies falling again today as the Justice Department launches an inquiry into First Brand's recent bankruptcy. Jefferies has $715 million in exposure to the embattled auto parts suppliers debt. In its bankruptcy filing last month, First Brands declared more than $10 billion in liabilities from acquisitions made over the past 15 years, as well as disputes over the company's accounting practices and a $219 million hit from President Trump's tariffs. Shares of Jefferies down more than 20% since First Brand's filing. Is this the exposure problem more than the reputational damage problem and therefore customer loss? I mean, how I think exposure First.

[Dan Nathan]

I think exposure, I mean a bankruptcy, they've kept a lot of this on their balance sheet, which is obviously now in retrospect problematic. So exposure to me, yes. Reputation stuff we can talk about later. But the real question is, is this the first of many? And what other investment banks have similar things on their balance sheets? And it's like the old saying, there's never one cockroach. So exposure to me is everything right now.

[Melissa Lee]

Well, this plus the tricolor bankruptcy really raises, raises flags. It raised flat. You're like, not really. But this, you know, it shines a spotlight on these loans to non depository financial institutions which are 33% of all commercial and industrial loans right now by big banks. And so therefore how worried are you about that? Just sort of on a broader basis.

[Mike Wilson]

Yeah, I mean our credit, I spent a lot of time with our credit team last week on this. And we don't think this is a systemic issue. It is an idiosyncratic issue for the banks that have, have these loans. So look, we're in a credit cycle, you know, 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 broadly. But this is going to be some other victims from this. It's not systemic in our view.

[Tim Seymour]

The only thing that's systemic is that lending standards have probably gotten a lot easier and that there's a ton of money chasing certain types of either leveraged finance, private credit, and there's a retail appetite for exposure to this as well. So. So I don't think it's systemic in terms of a credit problem. I think it's systemic that there are probably bad deals that were done.

[Dan Nathan]

Yeah, you know, the other thing is.

[Mike Wilson]

On the investment grade side, I mean there's $1.2 trillion in data center debt.

[Dan Nathan]

Right now and when you think about that, there's a disproportionate amount of that high grade.

[Stephen Kim]

Well, you tell me, like what I'm.

[Tim Seymour]

Saying is I don't know that some.

[Stephen Kim]

Of this all the time is that high grade.

[Dan Nathan]

I mean like, you know, I'm not asking my kids here, but you know.

[Stephen Kim]

Some of these Neo clouds, they, I.

[Dan Nathan]

Mean they are losing tons of money and raising tons of debt so they can, you know, so they can provide, you know, this compute to me.

[Stephen Kim]

Oracle is a great example.

[Mike Wilson]

I mean negative cash flow and it's.

[Dan Nathan]

Going to be that way for five years.

[Tim Seymour]

I don't think that's going to be raising that's going to be high grade.

[Melissa Lee]

Yeah.

[Dan Nathan]

So you have a stock market an all time high. Banks have been trading well into the last couple of weeks. Pull up an Apollo chart just for SMGs as they say and look at where that. What, what does that know? We're not allowed to say that on this family.

[Tim Seymour]

Okay.

[Dan Nathan]

This is stock that made its all time high in December. We're trading at April lows and not a lot of things trading in April lows this whole space.

[Melissa Lee]

Alternative managers.

[Dan Nathan]

Yes.

[Melissa Lee]

So it's something they are Carlyle, all of them.

[Tim Seymour]

And why SMGs obviously not savings. SNL SNL G is completely different.

[Melissa Lee]

Not PG. Coming up a decade late and a dollar short. The alarm bells ringing as global central banks move away from us. US Treasuries what dollarization could mean for markets here and around the world. More on that when Fast Money returns.

[Stephen Kim]

Missed a moment of fast. Catch us anytime on the go Follow.

[Mike Wilson]

The Fast Money podcast.

[Stephen Kim]

We're back right after this.

[Melissa Lee]

Welcome back to fast money. Stocks pulling back from records. The Dow falling nearly 250 points. The S and P down a quarter of a percent. And the NASDAQ with a small shares of Nvidia up another 2% today. The chip giant hitting a fresh record high now up more than 43% this year. And Pepsi popping more than 4%. The soda maker topping EPS and revenue estimates this morning with strength in international sales. Pepsi still down about 5% in 2025. And shares of Ferrari stalling out down 15%. Its worst day ever after the luxury carmaker gave disappointing guidance and scaled back its EV ambitions. And some after hours action to tell you shares of Levi Strauss falling despite top and lot of bottom line beats and raised guidance. The Jean company saying the macro environment remains complex.

[Tim Seymour]

The Ferrari good word. Can I just say this? Like if Ferrari selling off on their EV ambitions not going so well. I mean that.

[Melissa Lee]

What is the to.

[Tim Seymour]

I mean we're talking about Ferraris here and I realize an EV Ferrari is probably really cool to people that it doesn't modern world.

[Melissa Lee]

How do you buy a Ferrari exactly?

[Tim Seymour]

You want that Ponssi exhaust, right? Melissa?

[Melissa Lee]

I mean I don't but as I understand it, that's what people.

[Dan Nathan]

You know how to drive?

[Melissa Lee]

I have a driver's license. It's in my wallet.

[Dan Nathan]

You know, Mel and I did a shoot years ago. Remember Tesla? Before anybody knew what Tesla was.

[Melissa Lee]

Are you driving?

[Tim Seymour]

I got to drive the Ferrari. The Cal T. Yeah, but there's, I'm sure there's B roll of that driver.

[Dan Nathan]

I drove it no, but I said, mel, I'm not letting you drive this car. I said under no circumstances.

[Melissa Lee]

Anyway, we have more important things to talk about. Meanwhile, the New York Federal Reserve revealing this morning the amount of U.S. treasuries held by global central banks hit its lowest in more than a decade. The drop of about $130 billion just since August, raising fears that global de dollarization is accelerating. For more, let's bring in BK Asset Management Managing Director of Strategy Kathy Lean. Kathy, great to have you with us. It's not just this drop held in Treasuries held at the New York Federal Reserve bank, but it's also the rise in gold, it's the weakness in the dollar. It's all these things combined. Kathy, what do you think is going on?

[Kathy Lean]

On? Well, I think that the dollar is Asian is impacting the rise in gold swing a very big story. We're seeing a structural shift and you know, normally custody holdings will fluctuate based upon global conditions, interest rates, who's managing the assets. But this is a deeper issue. I think we started to see a significant decline after we had the initial tariffs. So 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 be, hold inflation and when trade becomes unpredictable. And we're still seeing new tariff announcements, you know, every single month. Central banks are starting to look for ways to diversify and protect themselves from US policy risk.

[Melissa Lee]

@ the same time, we have a Treasury market that's pretty stable. So how do you reconcile the two?

[Kathy Lean]

So we do have a Treasury market that is fairly stable, but I think we are in an environment where investors, especially given the US Structural US Government shutdown and extreme level of the deficit, the Treasuries are no longer seen as as true of a risk free asset as they may have been, you know, a decade ago. So this is also affecting the dollars and the attractiveness of Treasuries. So central banks, what they're doing is not necessarily rejecting the dollar, but they don't want to be overexposed to it in this type of market environment. So there's a lot of factors that are playing into the reduction in treasury holdings.

[Dan Nathan]

Kathy. The dollar stabilized and bounced recently, but still it's probably having its worst year since the 1970s. And I think it's policy actually to weaken the US dollar because we have $39 trillion in debt that we're not going to grow our way. Out of the question is at what point does a weaker dollar become problematic?

[Kathy Lean]

Well, the weaker dollar, as well as the lack, lack of enthusiasm or direction, enthusiasm for us Treasuries is a huge problem because I think, you know, first off is going to increase borrowing costs, making the Federal Reserve's job more difficult. It's also going to hurt the liquidity in the treasury market and then also, you know, hurt the dollar's dominance. But as you said, this could be part of the plan. I do think at some point, it's hard to say, you know, I don't have a magic ball telling me when, but I do think if borrowing costs don't come down as much as the Trump administration or the central bank wants, that will become a more serious problem.

[Mike Wilson]

Kathy, would you, would you agree that we're in a new kind of inflationary environment? I mean, that's what gold is telling us. And obviously, I mean, bonds have been terrible for the last three or four years. It looks to me as a technician that they were in a new secular bear market for bonds. I mean, to me, that's the bigger issue for, for Treasuries that it's just we're in a, we're in an inflationary regime. And so that's why people are moving maybe some of their safe assets from, from bonds to gold. It's not so much that they're afraid of the $$, but just that they don't want to own bonds.

[Kathy Lean]

Right. I mean, I don't think they're necessarily afraid of the dollar. They're really just looking for diversification. I mean, pretty much since the sanctions, IRAN, Russia, In 2022, central banks have been adding to their gold reserves. And actually in August of this year, the total value of gold reserves actually exceeded the value of Treasuries for the first time since 1996. So this is a really big trend. And looking forward 3/4, central banks say that they plan to continue to buy more gold over the next five years. So, you know, this is. Gold is also a safe haven without the policy strings or sanction risk. And I think, you know, gold is telling us a very big story of a lot of things that are happening beyond inflation concerns that is driving dollarization.

[Tim Seymour]

Kathy, it's Tim, I'm a huge gold bull and for all the reasons you've mentioned. But the number one culprit of dollarization is China. You can't tell me China, who is the biggest producer of gold, who has every interest in making honor Kong and also Beijing, a money center, the renminbi backed by gold, the More gold reserves they have, the more legitimate that currency is. Is this really about China? Everything else has been going on for 25 years, but this move in gold in the last 12 months, with announcements by China in terms of their gold position and their treasury holdings inversely correlated to that, this move in gold is China.

[Kathy Lean]

To me, I think it's often about China. You see today's markets, today's markets, the sell off is driven by the rare earth announcement by China. I think China plays a very big role in asset holdings as well as the direction of a lot of different industries. But trade settlement, which is what I think you're talking about in non dollar currencies, is very much a trend that China has been advocating and been pushing for. So as you said, you know, by making gold more of an alternative to a dollar, more attractive one, this diversification is, is going to affect the demand for US Treasuries in general. So I mean, it's really about central banks looking for plan B. They're looking for, you know, what's happening over the next three years. And they're looking at the, the more attractive option of gold versus the dollar right now.

[Melissa Lee]

Kathy, great to speak to you as always. Kathy Lean. My pleasure. I'm glad you mentioned China because all of this can result in China becoming a bigger player on the world stage. In finance, you know, the times have never been trade. Exactly. Ironically.

[Tim Seymour]

And then add in, add in the crypto markets and just the decentralized currency dynamic which was, you know, already at play, already at work. You throw in the fact that between sanctions and also, I'm not saying it wasn't deserved, but if you suddenly decide, if the US makes the call that $300 billion of treasuries or central bank reserves by Russia that are held in some other place are now our position to make a decision on, that's a lot of other countries around the world are saying, I'm not sure how I feel about this. So again, I don't have a problem with freezing Russian assets. I'm just telling you that that has an impact on people's willingness to hold the dollar and hold Treasuries.

[Melissa Lee]

We've got some news on one of the potential treasury candidates, Eamon Javros. Got the latest developments. Eamon.

[Dan Nathan]

Hey there, Melissa. I've just been texting with former Federal Reserve Governor Larry Lindsay and Larry Lindsey confirmed to me, overtaxed, that he has withdrawn his name to be Federal Reserve Chairman. He was one of the candidates being interviewed by Treasury Secretary Scott Bess. And he says he is now no longer a candidate for that position. He says I have a full, I have a very full, varied and enjoyable life right now that I don't want to give up to go through the mill of public life. So scratch Larry Lindsay off the list of potential Federal Reserve chairs as Scott Bessant makes his way through that list of potential nominees, interviewing them all and ultimately with the goal of presenting a small group to the president for his selection.

[Melissa Lee]

Melissa, I'm glad they've got that down from 12 or 11 or whatever it is.

[Dan Nathan]

I'm sure it's starting to get their arms around it. Yep.

[Melissa Lee]

Yeah. Anyway, we've also got a statement from New York Attorney General Letitia James on her indictment.

[Dan Nathan]

Yeah, this is a pretty lengthy statement here, but I'll give you the top of it. She says this is nothing more than a continuation of the president's desperate weaponization of our justice system. He is forcing federal law enforcement agencies to do his bidding all because I did my job as the New York state attorney general. These charges are baseless and the president's own public statements make clear that his only goal is political retribution at any cost. The president's actions are a grave violation of our constitutional order and have drawn sharp, sharp criticism from members of both parties. So Letitia James clearly signaling here she's going to fight this, but she is now officially under indictment, as we learned just within the past hour or so.

[Melissa Lee]

Melissa, Amen. Thanks. Amy Javors at the White House. Coming up, moves out of the mainland, sending rare earth stocks surging how China's export curbs are pushing that trade higher when fast money returns.

[Stephen Kim]

December 11th. Join Melissa Lee and the team of traders in New York City for an.

[Tim Seymour]

All access celebration live and on air.

[Stephen Kim]

FAST MONEY live trading the holidays. Get your tickets now@cnbc events.com fastmoney.

[Melissa Lee]

Welcome back to Fast Money. Rare earth stocks exploding today after China tightened export controls and prohibited its citizens from unauthorized mining. Overseas investors betting the Trump administration will continue to take stakes in miners to short domestic production. Shares of Critical Metals USA Rare earth, Neo corporate developments and Ramaco all seeing double digit gains today. President Trump and China's President Xi are expected to meet later this month. I don't know if this is some sort of posturing before those talks. It feels sort of strange to turn up the heat here at this point.

[Tim Seymour]

Well, let's be clear. China's got a ton of leverage in terms of rare earth 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. Rare earth China is probably 92% of refined rare earth. Rare earth, which most people probably know. Stuff that's not that rare, except for China, is one of the few places where they don't care about mining it and where the implications from mining it, which are devastating potentially are part of the reasons why it's so rare.

[Dan Nathan]

Here's a stock we don't quickly look at, Albemarle, which is not easy to say, or bell, but take a look at where it bottomed out at and look the bounce we're seeing. And this is a name could be absolutely in the crosshairs for this administration. I mean, alb, given the recent low we had, the same low we had in 2019, ish is worth a look.

[Mike Wilson]

Yeah. I mean, this is an area where they do have leverage. And as Tim said, they're using it. And it's not so much in the mining, it's in the processing. It's so dirty and. But this is, they are selling us magnets for, like, industrial uses. Where they're not selling it is for military uses, which is kind of an interesting ploy. Means we can't, we really can't go to war if we wanted to without the military grade rare earth. So this is a leverage point. They're using it, you know, smart on their, on their part. But this is going to come to a head and it's going to remain, I think, an issue.

[Melissa Lee]

Coming up, Lulu losing its Riz. Oh, the retailers getting much love from teens these days, especially the ones with money to burn. Plus the stocks slang Riz Ladies like. Cool. Yeah. We'll get to it. Okay, after the break. Welcome back to Fast Money. Piper Sandler out with its fall teen survey designed to predict spending patterns. Among the key demo. The results bearing some interesting findings in athleisure. Courtney Reagan's got the details. She's here on set.

[Courtney Reagan]

Courtney, I love this one. It's big, it's historical. They do it twice a year. 11,000 teens. They got a lot of data to compare it to. So teen spending is down 6% year over year. $2,213. That's well below the 2006 peak of more than 3,000 bucks. So for athletic wear, insights leggings slash Lululemon. That was the first most popular trend for females. That was on par actually with last year on a percentage basis. So not much has changed. Athletic wear, the second second most popular trend for males slightly behind baggy pants. 37% of the preferred apparel brands are athletic, but that's down about 900 basis points from last year and the lowest since spring of 2020. So they're wearing things other than Athleisure. Nike, though still the top clothing and footwear name, it has actually held that spot for many, many years in this teen survey, despite the company's recent stumble, say writ large. But preference for Nike, to be fair, has fallen. It's down about 400 basis points from last fall survey. Lululemon falls to fourth favorite apparel brand from third, so also falling, but slightly. And then when asked specifically about favorite athletic apparel. So those names that I just went through was just apparel in general. Nike and Lulu do hold on to the top number one and number two spots respectively, with about the same share as last fall. Under Armour holds onto the top spot for brands no longer worn. Lululemon also getting called out by founder Chip Wilson in a full page ad in the Wall Street Journal saying the company is, quote, losing its soul. He's comparing it to a plane crash, saying it's usually a series of mistakes that lead to its downfall. But he gives some suggestions. He still owns about eight and a half percent of the company.

[Melissa Lee]

So in this Athleisure legging sort of category, what if the favorite brand is aloe or viori? Is that somewhere in the survey as well?

[Courtney Reagan]

So they only give sort of the top brand. So if it's peaked in to that very top level, at least like a 2%, 3% mindshare, it'll get in there and then if not, we don't see it. But it very well could have come in. I mean, they asked 11,000 teens. I went through the 78 pages. And so they just give you sort of the top insights there. But I mean, it has to be right. And, and it's not surprising that some of these names are going to still hold on to favor with teens that maybe didn't have the purchasing power to buy them before or maybe couldn't fit into the clothes before. And now that they are teens, they are interested. So it is predictive of some brands, but I think in some cases there are some nuances when you're thinking about teen spending.

[Melissa Lee]

Right. Courtney, thank you. Always fascinating. Look, Courtney Reagan, we've got a news alert here on next week's CPI report. The BLS reportedly looking to release the September data by the end of the month, recalling staff at the direction of the White House to get that report out. That is, according to Bloomberg, CPI was slated to come out next Wednesday. No word yet on when we'll get September's jobs report though. But the market will have one data report to chew on and that will be cpi according to Bloomberg. How are you going to look at that CPI number?

[Mike Wilson]

Well, I think, I mean, both of them are lagging, so inflation data and the jobs data is very lagging. We've written a lot about this and I think, you know, quite frankly, I mean, I'm not one of these. I don't think the BLS is doing anything nefarious. I just think the collection of the data, it's gotten poor and it's lagging. And what we look at is revisions. So what I'm going to be looking at is a revision to the data and that probably confirms what we've been saying, which is that the recession already troughed in March and April and that's, that's what I'm looking for, is revision data. And I'll throw this out there. I think the November report can be really, really important.

[Melissa Lee]

Up next, final trades. Take a look there. Those are our traders final trades for tonight. We had so much fun tonight, ran out of time. It's been great having Mike Wilson and Morgan Stanley here on the show. Thanks for watching. Fast Men Money starts now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer if you're a.

[Stephen Kim]

Smoker or dipper ready to make a change, you really only need one good reason. But with Zyn nicotine pouches, you'll discover many good reasons. Zynn is America's number one nicotine pouch brand. Plus Zynn offers a robust rewards program. There are lots of options when it comes to nicotine satisfaction, but there's only one Zyn. Check out zyn.com find to find Zyn at a store near you. This product contains nicotine. Nicotine is an addictive chemical.