The Odd Commodity Out, LULU Lows and Rare Earths Soar 10/9/25

Summary

Podcast Summary: The Exchange (CNBC)

Episode: The Odd Commodity Out, LULU Lows and Rare Earths Soar
Date: October 9, 2025

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Overview

This episode of "The Exchange" dives into a dynamic day on Wall Street with a focus on the broad-based commodities rally (minus oil), the rare earth sector's surge, Lululemon's plummeting stock and behind-the-scenes drama, the evolution of Macau as an entertainment capital, developments in the AI and energy arms race, and a look at Ferrari’s EV pivot. The show balances breaking news, in-depth interviews, and expert analysis on current market-moving headlines.

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Key Discussion Points & Insights

1. Metals Surge, Oil Lags: The State of Commodities

(02:38–10:01)

• Commodities Rally:

  • S&P Metals & Mining ETF at a record high.
  • Gold, copper, silver, platinum all up; oil the notable laggard.
  • Investors seeking "real assets" to hedge against the dollar.

• Jeff Curry (Carlyle, Chief Strategy Officer):

  • Drivers of Metals Boom:

    • De-dollarization: Central banks now hold 27% of reserves in gold, more than US Treasuries.
    • Debasement: Gold inflows spiked amid US government shutdown and fears about fiscal strength.
    • Diversification: Investors seek alternatives to stretched equities and tight credit spreads.
    • “The de-dollarization theme [has] been in place for 5-plus years, continuing to drive gold.” (Jeff Curry, 02:41)

  • Industrial Metals/Copper:

    • Copper up nearly 25% YTD.
    • Demand surges: AI/data centers, defense, electrification (“Copper is the new oil”).
    • Supply issues: Major mines facing problems; market in deficit.
    • “Three of the biggest mines in the world... all running into problems. You've lost 500,000 tons of supply right now.” (Jeff Curry, 04:42)

  • Oil’s Dilemma:

    • Despite a widely broadcast supply glut, prices have held steady ("the most telegraphed surplus I've seen in 30 years").
    • Fundamentals like refining margins and backwardation suggest the bearish case is already priced in.
    • “If it was going to impact prices it would have already impacted prices.” (Jeff Curry, 05:51)

  • US Policy & Energy:

    • Domestic policy upward pressure on prices; drilling down due to low prices and employment falling in Texas.
    • Recent Gulf of Mexico oil supply results from long-ago investment.

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2. Bond Market in Focus: 30-year Auction & Implications

(10:06–12:02)

• Rick Santelli reports on a strong 30-year bond auction despite the government shutdown:
  • Yield slightly above the "when issued" rate.
  • Investor (non-dealer) demand very high — smallest dealer takedown in 25 years.
  • “That's a very aggressive bidding by actual investors and that's a good thing at this point.” (Rick Santelli, 11:03)
  • If yields close above 4.77%, could signal more upward pressure on rates.

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3. Government Shutdown: Political Stalemate & Consequences

(12:02–14:18)

• Emily Wilkins from Capitol Hill:
  • Another failed Senate vote; shutdown becomes 8th longest.
  • Key sticking point: Affordable Care Act tax credits.
  • Trump administration threatens permanent cuts to Democrat-backed programs, but specifics unclear.
  • Looming pain points: Military pay and veterans’ GI Bill access at risk if shutdown persists.
  • “There are going to be other pressure points coming as well. As next week on the 15th, members of the military will not be getting their paycheck.” (Emily Wilkins, 13:33)

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4. Corporate Drama: Lululemon’s Slide & Founder’s Public Rebuke

(15:58–20:22)

• Chip Wilson (Founder) vs. Current Management:
  • Full-page Wall Street Journal ad decries the company is “in a nosedive, losing its soul”.
  • Solutions: Refocus on product, brand, creativity, empower leadership, recommit to muse ("the woman who inspires the brand").
  • Shares down 65% from highs; on pace for worst year since 2008.
  • Courtney Reagan’s Analysis:
    • Competition is fierce, both from giants like Nike and upstarts.
    • Board composition: Significant experience, but critics argue loss of founder’s visionary touch.
    • “He really is very critical of the fact that Lululemon has lost its soul and lost its visionary.” (Courtney Reagan, 16:59)
    • Wilson owns just over 8%; could stir activist attention if the slide continues.

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5. Macau’s Comeback: From Gaming Fortress to Family Destination

(20:40–26:15)

• Contessa Brewer in Macau:
  • Post-pandemic rebound surpasses expectations; city vibrates with energy (in contrast to “bordering on joyless” preconceptions).
  • Differences from Las Vegas:
    • No smoking inside casinos (enforced by fines).
    • Daylight and even clocks in gaming parlors.
    • Casino floors isolated, families and children shielded from gambling.
    • “For the first time ever, windows in a gaming parlor... it looks like daylight. I've never seen that before on a gambling floor.” (Contessa Brewer, 22:49)
  • NBA games attract younger visitors and families.
  • High rollers remain the backbone, but amenities and family features drive ancillary spend.
  • Outlook: Macau evolving into a broader entertainment and sports destination.

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6. AI Spending, Small Caps, and the Market Bubble Debate

(27:20–33:13)

• CapEx Concentration:

  • Four companies (Amazon, Google, Meta, Microsoft) account for 30% of S&P 500 capital expenditures.

• Julie Beal (Kane Anderson Rednick):

  • AI Hype vs. Reality:
    • Risk in “picks and shovels” investments: Reliance on a handful of tech giants’ CapEx.
    • Prefers small caps using GenAI to enhance operations, as “this technology is a great leveler.”
    • “This transformation that we're seeing in technology, it's existential, it's going to be impacting us through the next decade... This is a real tech transition.” (Julie Beal, 30:35)
  • Company Examples:
    • Descartes (info advantage in trade)
    • Encino (software for small banks)
  • Market Outlook:
    • Broad market strength expected in Q3 earnings.
    • Supply chain lessons from pandemic and tariffs are making companies more resilient.

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7. Ferrari’s Electric Pivot—Investors Not Impressed

(34:06–36:12)

• Robert Frank:
  • Ferrari shares drop 15% — fears long-term profit growth (cut to 6% through 2030 from 10%) and scaled-back EV ambitions (target cut from 40% to 20% of lineup by 2030).
  • Demand not an issue; most models have long waitlists.
  • Comparable pullbacks from luxury automakers like Aston Martin and Lamborghini.
  • “It's not a story of rich people aren't spending or they're not buying Ferraris. This is a very expensive stock where any whiff of a moderation in profit growth is affecting the stock.” (Robert Frank, 35:27)

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8. AI & Energy: The Next Arms Race

(36:44–39:47)

• Nvidia Chips Headed to UAE:
  • US Commerce approves large shipments of high-end chips to UAE; country well-positioned with abundant, cheap natural gas and nuclear power, unlike the US which faces electricity shortages.
  • “The real competition isn’t about building the smartest AI, it’s about keeping the lights on while you run it.” (Christina Parts, 38:20)
• The US leads in AI companies but struggles with infrastructure (power).
• Both UAE and China, despite the US’s tech edge, face fewer energy constraints—potentially an edge in the global AI race.
• Expectation of more international US chip deals in the future.

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9. Rare Earths and Critical Minerals Mania

(39:54–46:02)

• Rare Earths Rally:
  • US rare earth stocks like MP Materials, USA Rare Earths soar after China tightens export controls.
  • Corrected: Recent US government stake was in Lithium Americas, not USA Rare Earths.
• George Gianarikas (Canaccord Genuity):
  • Emphasizes US vulnerability: “The vast majority of rare earths are processed in China... even greater percentage of magnets are made in China.” (George Gianarikas, 41:37)
  • US consumption: 50k tons/year of magnets, but domestic projects still far from meeting needs.
  • US government partnership investments viewed as strategic necessity, not state capitalism.
• Nuclear and Oklo:
  • Oklo’s small modular reactors: Unique, vertical strategy, potential to address US energy demands and support AI/data center growth.
  • “Not only do we need more power, but nuclear as a percentage, we think, should grow well into the next decade and beyond.” (George Gianarikas, 44:32)

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Notable Quotes & Memorable Moments

• Jeff Curry on Gold’s Central Bank Role:
  “Central banks now own 27% of their reserves are now in gold. It exceeds US Treasury.” (02:41)

• Julie Beal on AI Transformation:
  “This is not crypto, it is not 3D printing... this is a real tech transition we’re experiencing.” (30:35)

• Courtney Reagan on Lululemon’s Identity:
  “He really is very critical of the fact that Lululemon has lost its soul and lost its visionary.” (16:59)

• Contessa Brewer on Macau’s Surprises:
  “It's almost like we're seeing Las Vegas as it was a few years ago post pandemic rebound.” (21:51)

• Christina Parts on the AI-Energy Fight:
  “The real competition isn’t about building the smartest AI, it’s about keeping the lights on while you run it.” (38:20)

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Timestamps for Key Segments

• Metals Rally & Commodities: 02:38–10:01
• Bond Market Update: 10:06–12:02
• Government Shutdown Update: 12:02–14:18
• Lululemon Crisis: 15:58–20:22
• Macau’s Transformation: 20:40–26:15
• AI, Small Caps & Bubble Talk: 27:20–33:13
• Ferrari and EVs: 34:06–36:12
• AI Arms Race & Energy: 36:44–39:47
• Rare Earths, Critical Minerals, Nuclear: 39:54–46:02

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Conclusion

This episode spotlights the intersection of geopolitics, innovation, and economics driving today’s markets—from commodities and rare earths to tech, retail icons, and global entertainment hubs. Listeners gain a practical grasp of macro trends (commodities, AI, energy), sector-specific pivots (retail, luxury autos), and the complex chess game unfolding between the US, China, and emerging players like the UAE.

Transcript

[Morgan Brennan]

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[Rick Santelli]

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[Julie Beal]

You're listening to THE Exchange.

[Jeff Curry]

Here's today's show.

[Emily Wilkins]

Thanks, Scott. Welcome to the Exchange.

[Morgan Brennan]

I'm Morgan Brennan in for Kelly Evans. Stocks are lower across the board. The S and P and the NASDAQ retreating from fresh record highs hit at the start of the trading session. This is another Senate vote is underway that could end the government shutdown now in its ninth day. We're going to keep an eye on that. And we are also watching the Rare Earth Trade USA rare earth up 14% after China said it would limit exports to overseas markets. And shares of OKLO gaining on a bullish initiation. Over at Canaccord, the firm calling bubble concerns overblown and says that it is uniquely positioned to benefit from, quote, the new nuclear age. The analyst joins us with how much upside he sees ahead. But we begin with the momentum in metals. The S and P metals and Mining ETF XME hitting a new record high. Copper, gold, silver, platinum, all soaring over the past year with investors piling into real assets for protection against the dollar and other fiat currencies. Oil is the only outlier in what's becoming a broad based commodity rally. West Texas intermediate crude down 15% despite geopolitics and supply and demand concerns. But my next guest says that could change soon as he sees a real bull market emerging across the entire commodity complex. Joining me now is Jeff Curry, chief strategy officer of Energy Pathways at Carlyle and Jeff it's great to have you on. Let's start right there because we've been talking so much about gold and certainly gold has been kind of the pinnacle here. But what is moving the metals?

[Jeff Curry]

Well, I think there's three factors driving it. One is de dollarization and it started with the China bloc in Russia. I want to point out that the central banks now own 27% of their reserves are now in gold. It exceeds US Treasury. So the de dollarization theme been in place for 5 PL years, continuing to drive gold. Then we can add in the debasement trade, which really started to gain steam with the government shut down. We saw the ETF have 110 tons of inflows in recently around the debasement. And then the third one, I'd just say diversification investors want to own something other than really tight credit spreads in the fixed income space. And hey, you look at equity markets, they're kind of stretched. So metals and I'd throw in copper, silver, platinum, platinum. Of the entire list, you just rambled off. We're seeing it in all of these hard metals. And I think there's a lot more upside. I'm not going to say this thing won't trade down if we end the government shutdown, but we look out. To give you an idea, central bank holdings going back into the 70s, we're running at 75%. So if that 27%, we could see those numbers go much higher.

[George Gianarikas]

Hmm.

[Morgan Brennan]

So you're an individual investor, you're watching, you're tuning in at home. How do you actually invest in this? Do you invest into the hard commodities or do you play etf? Something else.

[Jeff Curry]

I think the ETF is an excellent way to play it because it's one of the few ETFs and commodities where you actually own the physical, you get to own the physical bars. And I think with gold in particular, investors want to know that they have access to the real physical and that's one way in which you can get that exposure.

[Morgan Brennan]

The industrial metals. Is it a similar situation to what you just outlined with Goldens and the other precious metals? Or is this re industrialization? Is it trade dynamics? Is it tariffs, Is it other things? Supply and demand there that's, that's propelling that.

[Jeff Curry]

It's all of the above. In fact, I like to say copper is like a perfect storm.

[Robert Frank]

You know, gold and copper were our.

[Jeff Curry]

Big picks a year ago. We still remain very positive on it. You know, you look at copper, it's up nearly 25% year to date. It has that long term underinvestment thesis that all the commodities are experiencing. Then you've introduced two unexpected demand surges AI with the data centers and then the second one is defense related demand. And that's on top of the electrification. The electrification story we coined the term. Copper is the new oil because it's strategically the most important commodity if we're going to electrify the world and then to make it a perfect storm, three of the biggest mines in the world, Grasberg in Indonesia, Escondido in Chile and then Kamoa Kukola in the DRC, you know, all running into problems. You've lost 500,000 tons of supply right now. So the market's in a deficit, flirting with all time highs. We see a lot more upside from here.

[Morgan Brennan]

Yeah, and we just talked about it at the beginning of this conversation. But crude has not participated in this. What is moving crude right now and is there a point at which that shifts and this becomes a broader commodity bull market?

[Jeff Curry]

Well, I mean crude has been under pressure now for over a year around the enormous supply glut that everybody's been expecting. Well, that supply glut or I'm going to sell a slug of oil is, you can see it on the water now. But I want to emphasize it has had no impact on physical markets. Crude oil on the front end is backwardated, the spreads remained prompt, tight. You look at refining margins, distillate cracks near an all time high. So the bottom line is yeah, that slug of oil people have been worried about, it's on the water right now but it has not impacted prices. And I want to emphasize if it was going to impact prices it would have already impacted prices. The OPEC producers don't own that oil anymore. The consumers do. And the economics don't suggest they're going to store it. The economics suggest they're going to burn it in a refinery. Given how wide refining margins is in the forward curve does not pay to build the inventory. So more likely not they're going to burn it. I think the main point here is this big concern around this big wave of supply. We're witnessing it, it's here right now and we're not selling off. You're still sitting on, you know, $65, $66 a barrel on a Brent basis.

[Morgan Brennan]

Do you think it goes higher from here or lower?

[Jeff Curry]

You know, I think the, it's a fine line between pricing a glut and pricing running out of spare capacity. We still have a little bit of non OPEC supply that can move through the system into the first part of next year, but after that we're out of bullets. It's going to be the same story as copper and the rest of these other commodities. But I'm not going to say we can price it in tomorrow. But I don't think, I think the concerns of the big sell off I think are exaggerated right now given the fact that you can see it. It's the most telegraphed surplus I've ever seen in my 30 years of doing this. So the market has to have already incorporated all of the downside risk from that. I'm not going to say it's not going to happen. But you know, I look at it, I guess what I find baffling is how convicted the market is around this oil supply glut, creating this downside. Given the fact that it's extremely telegraphed. The market is running about a minus 6 from minus 10 to plus 10. You know, it's minus 6 short right now. So the upside is, hey, we get evidence that this surplus is not creating the big stock builds. As we get to the end of this month in the first part of November, that big short in the market reverses. You know, that could move you up $10 a barrel. I'm not, you know, I'm the lone bull out there trying to make this case right now in the face of that big supply glut. You know, you can see it. But you know, I think the key message here, it's hard to argue downside here given the fact that everybody can see it. It's in the price right now. And I think the key point is all that oil was nominated. You know, you look at opec, they put those barrels out there and they were nominated. Somebody bought them refining margins, record levels and then you have a backwardation on the curve.

[Morgan Brennan]

Yeah, finally I realize that we're talking about global markets here. Geopolitics tend to factor into commodities in a very big way. But how much is US domestic policy around all of these different commodities factoring in sort of changing the supply demand equation as well and pricing equation?

[Jeff Curry]

I think, you know, when we look at the policy right now, it creates upward pressure on prices. Whether, you know, it's the, you know, the weakening of the dollar that we've seen since the beginning of the year that puts upward pressures on there. But I think the key point is prices in the US are on the energy side are so low that drilling is already coming off. You know, unemployment in places like Texas is already rising, which is going to Create more stress on the system. So you know, people like to argue OPEC wants to wage a war with the US on a price war with them. They don't need to. Drilling is already off. You know, employment is off. And people go wait Jeff, there's a big increase in U.S. supply recently that is in the Gulf of Mexico. That was from investment five years ago. So when we look at the situation for growth in the US it's going to struggle.

[Morgan Brennan]

All right, Jeff Curry with Carlyle. Thank you for joining me.

[Jeff Curry]

Thank you for having me.

[Morgan Brennan]

Well, 30 year bonds are up for auction. Rick Santelli is tracking the action at the cme. You've been talking about this all week, Rick. What are we seeing?

[Rick Santelli]

Yes, it's once again it's a very interesting auction. 22 billion 30 year bonds actually 29 year 10 month. Adding to an issue originally primary auction a couple of months ago. The Yield at this 22 billion Dutch auction, 4.734%. The when issued market was hovering right around 4.73. So the actual Dutch auction had a slightly higher yield which means a slightly lower price. So there was about what a half a basis point or so on a tail. That's the only thing that was wrong with this auction gave the grade A B plus in terms of demand, solid demand. And even though you see on the chart the yields moving up a little bit sometimes just like yesterday's tenure, even a good auction can't stop a sell off. The market does have a life of its own once it gets beyond all the dynamics of an auction. And this particular auction had some very special features. The dealer takedown was 8.7%. I have enough history here to go back about 25 years. I, I can't find a smaller amount. That's the smallest amount for 30 year auction on my records that the dealers took. That's a very aggressive bidding by actual investors and that's a good thing at this point. And I would continue to say that during this shutdown another interesting feature is pretty much all week if you look at a year to date of 30 year bond yields, we are hovering pretty close to unchanged on the year we we settled right around 477 at the end of last year. And every day this week we've been closing basically in the low 4 70s. I think it's important should we start to close above that, I think that would be a technically significant feature that would put more upward pressure on long maturity interest rates.

[Morgan Brennan]

Morgan, back to you Rick Santelli. Thank you. Well meantime the government shutdown is halfway through its ninth day. It's now the 8th longest shutdown in history. No signs of reopening, at least not yet. Emily Wilkins is on Capitol Hill. She has the latest for us. Hi, Emily. Hey, Morgan.

[Emily Wilkins]

Well, right now, senators are trying yet again to see if they can vote to reopen the government. And the rule up here is that no vote is final until the gavel falls. It hasn't yet. But look, we know basically everyone's voted at this point. And from what we see, it has yet again failed to reopen the government. And no real movement here. You still need five Democratic seats. Senators. Those senators are still holding out for more when it comes to the Affordable Care act tax credits and finding a path forward on that. This is a position we've been in for the last week right now. And this stalemate is really seems like it can only be broken if one side begins to feel more pressure. And the White House is actually trying.

[Morgan Brennan]

To do that right now.

[Emily Wilkins]

Trump again trying to ratch up the pressure on Senate Senate Democrats to get them to vote to end the shutdown and this time threatening to end Democratic programs.

[Rick Santelli]

We'll be making cuts that will be permanent and we're only going to cut Democrat programs. I hate to tell you, I guess that makes sense, but we're only cutting Democrat programs. But we're going to start that and.

[Morgan Brennan]

We have Russell can talk to you.

[Rick Santelli]

About it if he wants to, but we're we'll be cutting some very popular Democrat programs.

[Emily Wilkins]

Now, it's not clear at this point which programs Trump was specifically referring to. Of course, we're still waiting to see what happens with these massive federal layoffs that Trump has mentioned. Haven't seen those occur yet. And of course, some questions about whether some of these furloughed workers will get back pay, although now you're hearing on Capitol Hill more Republicans saying that they will make sure that that happens. But Morgan, there are going to be other pressure points coming as well. As next week on the 15th, veteran, the members of the military will not be getting their paycheck. That is going to be a big pressure point. And it doesn't seem like at this point Congress is going to act to ensure that they are getting paid. And veterans are also feeling some of these impacts, including accessing the GI Bill. But at this point, Morgan, seems like we are locked in a shutdown for the foreseeable future.

[Morgan Brennan]

All right, Emily Wilkins, thank you. Well, coming up, the shutdown is not really weighing on stocks, the S and P and Nasdaq hitting record highs before reversing course, turning lower. We're going to look at how long this rally can continue. But first, Lululemon's founder is sounding off on the company, saying it's in a nosedive, it's losing its soul. But he's proposing a plan to fix things. We're going to tell you what it is. With shares now 65% off their all time highs. Exchange will be right back.

[Rick Santelli]

This is the exchange on cnbc. And now a next level moment from ATT Business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident, but the vendor isn't responding and International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease. So the pillows will get delivered and everyone can sleep soundly, especially you. AT&T 5G requires a compatible plan and device coverage not available everywhere. Learn [e-mail] 5G Network.

[Jeff Curry]

What made you confident that you could do something that.

[Courtney Reagan]

Hadn'T been done before?

[Morgan Brennan]

I have no fear of failure. Trailblazing women, changing the game One of my favorite pieces of advice Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself.

[Julie Beal]

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[Emily Wilkins]

Julia Boorstin hosts CNBC Changemakers and Power.

[Julie Beal]

Players New episodes every Tuesday. Wherever you get your podcasts.

[Morgan Brennan]

Welcome back. Let's drill down on one retailer, Lululemon. The company's founder, Chip Wilson, taking an ad in the Wall Street Journal saying the company's in a nosedive and it's losing its soul after nominating and governance committee failed to safeguard the company's long term vision. So what is the solution for the athleisure maker? According to Wilson, Lulu needs to put product and brand back at the center. Bring entrepreneurship or entrepreneurial ownership, I should say back onto the board. Empower creative leadership over merchants, stop chasing Wall street at the expense of customers and recommit to the muse, the woman who inspires the brand. Well, shares are down 65% from their all time high. They're on pace for their worst year since 2008. For more, let's bring in Courtney Reagan.

[Jeff Curry]

Court.

[Morgan Brennan]

Want to get your thoughts on this? Because there was a time where Lululemon was the upstart and the disruptor and made Athleisure mainstream and now there's more competition out there, including a lot of privately held new upstart names.

[Courtney Reagan]

Absolutely. So look, I think some of the points that Chip Wilson makes do make sense, but I think he also is forgetting that when he founded the company, the category was sort of new, it was burgeoning, it was a new idea. He's right. The innovation, the technical fabrics, it was something that, that the market hadn't seen before. But now not only is Lululemon competing with the Nikes of the world, but also the upstarts like the aloes of the Ores, that are trying to take a page from Lululemon's playbook. And he does somewhat address that, talking about sort of the other competitors that are coming in. But he really is very critical of the fact that Lululemon has lost its soul and lost its visionary saying, you know, when a company becomes bereft of a founder, these things happen. But he does, as you point out, give these points to say, hey look, you guys can. And I wanted to look at the board because he exited as CEO well before he left the company entirely and still had a presence on the board. And when I look through it, There are currently 10 members on the Lululemon board, including CEO Calvin McDonald, who's been there since 2018. But there are also three current board members that overlapped with Wilson. So that's about a third of the board that overlapped with him at some point. Six of those members of the board do have except experience, personal job experience in either retail or consumer products. So a CPG type product. Two of those 10 have founded their own company. So our founders in their own rights. When I look at the board, I don't see anything that's extremely off. He points a lot and says, look, there's people that are short term operators and they start to see things sliding and they can do things to sort of make Wall street happy to juice up the financial results. Yes. Terry List is on the board and she has a lot of experience in retail, largely as a CEO role. And so may maybe she had a hand in making sure that the finances were in good shape, which I wouldn't say is ever a bad thing. But to be fair, the stock price certainly has taken a dive. You mentioned, down 65% or so since its high. You know, there are some things that can be done, but I think that competition is something that we should seriously point out. And also look at Nike, by the way. Right. They have been a leader in so many areas for so long and they have faltered recently. They have had to change CEOs.

[Morgan Brennan]

Yeah. And of course, they brought somebody back who had been at the company and it had a very strong record in the past as well. Not a founder. But I do have to wonder, a, how much does Wilson still own of this company? B, does this now sort of stir Lululemon into the ethos as a, as a potential activist investor, takeover target?

[Courtney Reagan]

Yeah, two great questions. So Wilson owns a little more than 8% of the company's share, so obviously he, he is invested in this company quite literally. Not just from an emotional standpoint, of course, as the under, but financially stands to benefit as the stock price turns around. So understandable, perhaps why he still cares so much in a, in a dual way. And took out this paid ad, by the way, we should mention in the Wall Street Journal, a full page paid ad. And then does it become more of an activist target? I mean, I think possibly, right. Whenever you see the market cap continue to fall, it always becomes potentially more attractive for someone else that thinks they might have better ideas, maybe can add it to their business and, or grab onto it, say, in a private equity deal. So I wouldn't say it's beyond the realm of possibility there for certain.

[Morgan Brennan]

Okay, Courtney Reagan, thank you. Which shares a LULU down another 1% right now. Well, coming up, we've got an inside look at Macao's evolution as the world's gambling capital tries to make a comeback. Contessa Brewer is there. She's live on the ground. She has more. Contessa.

[Contessa Brewer]

I'm live up by the pedestrian bridge here at the Venetian Sands overlooking the Cotai Strip. And look, what I'm seeing is the kind of rebound that investors have been anxiously waiting for ever since the pandemic ended and Macao opened its borders. What will they see for profits?

[Christina Parts]

We explore that.

[Contessa Brewer]

Coming back on the exchange.

[Christina Parts]

What made.

[Jeff Curry]

You confident that you could do something.

[Morgan Brennan]

That hadn't been done before? I have no fear of failure. Trailblazing women, changing the game. One of my favorite pieces of advice, think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself.

[Julie Beal]

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[Emily Wilkins]

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[Julie Beal]

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[Morgan Brennan]

Welcome back. From global gaming to the NBA's return, Macau is making some big bets reshaping Asia's entertainment capital. Our Contessa Brewer is there for a firsthand look. And Contessa, it's not what you expected. What's your takeaway.

[Contessa Brewer]

I mean one, it's almost like we're seeing Las Vegas as it was a few years ago post pandemic rebound. The pent up demand, the intention to really live the experience in this entertainment destination is palpable and at odds with what experts had told me to expect from Macau in terms of its serious gaming history. They had described it as something bordering on joyless. That is not at all what I'm seeing here on the gaming floors and out in the corridors. But you know, Morgan, this is very different from Las Vegas in several ways. Number one and probably most obvious right away, when you walk in, there's no smell of smoke. And that is because in Macao you are not allowed to smoke inside. There are signs posted everywhere that say you will be fined if you're caught smoking. So what they do instead is they offer snack bars in the gaming floors for the gamblers who are there. But it's interesting because the in Las Vegas and in Atlantic City and elsewhere, casinos have been very successful in arguing that a smoking ban would kill their business. But when you look at Macau, which makes sense, way more money from gambling than Las Vegas does, that's not true. Secondly, I saw yesterday for the first time ever, windows in a gaming parlor. It was at the, the, the High Limit Club at the Wynn Palace. Beautiful windows overlooking its lake with fountains. But in the daylight, if you're gambling, it looks like daylight. I've never seen that before on a gambling floor. I think also it's interesting that in Maau, the casino floors are all cloistered behind screens. So that if you're in shops or restaurants, if you're here with family, and there are families everywhere, small children everywhere. Something I did not expect. They would never even have to see a slot machine or the gaming tables because the regulators do not want that to be apparent to families. Super interesting, interesting to compare and contrast the two.

[Morgan Brennan]

Oh, this is fascinating. I have many questions for you. I guess the first one is, okay, daylight at least on one floor, in one casino, are there clocks?

[Contessa Brewer]

I'm looking right now at a massive clock. It's Big Ben or the replica thereof that goes along with the Londoner. But no, I don't see clocks out on the casino floor. I don't get the sense of, you know, the, the, the signature scents that you might come to identify with the upscale casinos in Las Vegas. That happens here as well. You walk in and it smells very strongly of a particular fragrant and that and that like Pavlov's dog, that helps gamblers get back in the mood or shoppers to restaurant, restaurant foodie types to associate that with their favorite properties.

[Morgan Brennan]

Now, Edison want to go back to this idea that it's very family friendly and how that's structured and how that's different than what has always been described of Macao of old, if you will. What does that mean in terms of what's driving revenue and profits and how does Macao continue to, I guess spearhead that and continue to grow? What has to happen?

[Contessa Brewer]

Okay, so first of all, you've got the NBA China games starting here to tomorrow or return after six years for the NBA. It's a big deal. There are basketball fans everywhere. More than 50% of people who responded to a survey on social media say they follow basketball. NBA basketball in China. That's a huge number. And you can see it with the young people, teenagers and young adults who are out crowding around asking for autographs from the basketball players. Is that driving profitability in a return? Because after all, you'd have to sell a lot of tickets to make it up for even one hand of baccarat in these high limit rooms. That being said, what they told me at, at Wynn palace, this beautiful presidential suite, the 7,000 square feet with a beautiful patio lawn, they said, oh, but now the gamblers are coming and they're bringing their families. And so what we'll do is we'll set up soccer, they called it football out on the pitch. So they're still getting the money from the high rollers, but now they're getting all the extraneous spending on the amenities or the amenities are bringing in those whole families and spending longer periods of time here.

[Morgan Brennan]

Contessa Brewer, great reporting and great to see you in Macau. Thanks for bringing this to us. Don't miss Contessa's continued coverage from Macau. Tomorrow she will be looking at the NBA's return to China. You just got a little preview right there. That's all day tomorrow only right here on cnbc. Now let's get some show and tell where we show you a chart and tell you the story. So Delta Airlines is jumping 4% today after beating estimates on the top and bottom lines, forecasting a stronger than expected fourth quarter too. But international travel, just like we were just talking about with Contessa, continues to be a bit of a struggle for the carrier. Here's what CEO Ed Bastian told our Philippeaux this morning on Squawk Box.

[Jeff Curry]

We had a bit of a international point of sale issue. Where were Europeans, particularly Canadians were not maybe coming to the US in the numbers that they have previously. We supplemented it with more US Consumers. There were, there were pricing issues. That is, you know, I think was, was very much a peak issue but as you get into the fall, the off peak, it's looking really good.

[Morgan Brennan]

Well, despite today's pop, Delta shares are still down about 1 1/2% since January. For the full interview you can head over to CNBC.com and check that out. Well, coming up, the S and P and the Nasdaq hitting new highs before turning lower. But can the AI trade continue to hold up the market? Our next guest is looking beyond the big names for potentially some big returns elsewhere. We're going to tell you where they are next. Welcome back to the Exchange. Plenty of talk about an AI bubble and the health of the current bull market as big tech stocks continue to make outsized gains and companies spend billions. Here's another staggering stat just in time for earnings season. Strategus noting only four companies make up about 30% of S&P 500 CapEx, Amazon, Google, Meta and Microsoft. My next guest still likes this AI trade, but she's looking for opportunities in small caps. Joining me now is Julie Beal, chief market strategist at Kane, Anderson or Rudnick. Julie, it's great to have you on and it's interesting to hear that are you looking at names that could potentially benefit from all that CapEx spending by those four heavy hitters that we just laid out?

[Julie Beal]

I think that's the place where I would say there's the most risk. That's we've seen a lot of companies rallying on the idea that the picks and shovels of this capex are going to be big beneficiaries. But the problem is is that you have a lot of customer concentration risk involved in that. And that's the concern that I have is you're relying on four boards of directors to continue to be extremely brave without a lot of evidence that they're going to earn a great return on this investment. And that's a concern for me. So I would rather companies that are already starting to use generative AI in their own operations in software. Small caps are a great example. This technology is a great leveler. I think it's actually going to enable a lot of smaller businesses to compete with larger businesses. And if you look within small cap software, there are a lot of nice niche businesses that are profitable and that haven't really benefited from the high beta rally that we saw in the third quarter.

[Morgan Brennan]

Okay, let's name some names.

[Julie Beal]

So Companies I like are Descartes, which has a real information advantage in trade. They account for something like two thirds of packages shipped touch their network. They have real barriers in that business. There's an encino which is really enabling a lot of small banks to be more competitive with the larger banks. And despite a really tough mortgage market, they continue to grow their business, which I think is pretty impressive. And you know, I think these are the types of kind of smaller cap businesses who can leverage generative AI right now to accelerate their product roadmaps. But they're also integrating a lot of this AI into their own products to be more compelling for other for their customers.

[Morgan Brennan]

There's been a lot of commentary, some of it explicit, some of it maybe implicit. When I think about Jamie Dimon's comments earlier today in an interview around the froth in AI and whether a bubble is inflating here or whether there is much further to go and the hype is real. You mentioned where you see risk in the AI trade. How are you thinking about this and how is it, I guess, going, going into your investing thesis overall for this market?

[Julie Beal]

Well, you know, it's like, look, I've been spending a lot of time in therapy and so especially couples therapy. And we always say, you know, it can be both. Right? You want to acknowledge that it can be both. So I genuinely believe that this transformation that we're seeing in technology, it's existential, it's going to be impacting us through the next decade. I really believe that, you know, it is, it is real. It is not crypto, it is not 3D printing. This is a real tech transition that we're experiencing, experiencing. I also believe that most tech transitions don't move in a perfectly linear way and that we could have periods where we have major overinvestment and they are not able to really recoup all of that investment in a way that is great for investors. I worry sometimes too that this could be like aviation, where all of us really benefited from the innovation in aviation, but the companies actually flying and building the planes didn't start to really earn a return until the 90s. I don't think it's going to be quite that extreme here, but I do think that these numbers are really large and they mean that they're really hard to create huge businesses around them. And I just think we need to keep that in mind.

[Morgan Brennan]

If I step back and just look across the market more broadly, it seems like expectations are, are pretty optimistic going into Q3 earnings season. Do you fall in that camp?

[Julie Beal]

Yeah, I do. I think things are looking great. I'm so impressed with companies ability to manage through the level of uncertainty that we had. You know, we were talking about it as toxic uncertainty. I think one great thing that's happened and that really enabled companies to be more flexible is that with the pandemic and the supply shortages, every company really looked at their supply chain and tried to figure out how to be more resilient. And they got to test that right away with tariffs. I think what we will see in the next 2, 3 and 4 quarters is how they integrate and how they change their cost structures to try to withstand some of the blows of tariffs. Right. We know that most companies right now are the ones shouldering the, the burden of tariffs. Will that move over to consumers? I think it's not. We're not really going to know that until probably the fourth quarter.

[Morgan Brennan]

How closely are you watching the bond market right now?

[Julie Beal]

I think that's really an important place to pay attention to. I can appreciate that the President really feels like the place he needs to put pressure is on the Fed. But frankly the bull market is what the bond market is what really matters. And it's much harder to bully those guys than it is the Fed. I worry a lot that the level of deficit spending that we still are recording despite taking in a ton of tariff revenue is something that will really limit how much we can get any yield relief and that impacts the rest of the whole economy.

[Morgan Brennan]

Julie Beal, Kate Anderson Rednick, great to have you on. Thank you.

[Julie Beal]

Thank you so much.

[Morgan Brennan]

Coming up, Ferrari pumping the brakes. It's on pace for its worst day ever despite raising full year earnings and revenue guidance. Why shares are under pressure. That's next. And check out Boeing. Those shares are down nearly 4%, shaving 56 points off the Dow right now. That's after the Turkish Airlines chair said the carrier would switch or could switch its recent order for 150Max jets to Airbus if talks with Boeing's engine supplier. Don't make progress. Exchange will be right back. Welcome back. The EV market share climbing last quarter. But one company is not seeing a big pickup in sales. Ferrari. Robert Frank joins me with the story. Hi, Robert Morgan, Good to see.

[Robert Frank]

Well, Ferrari shares down 15% on fears of a slowdown in profits. This all comes from its investor day today. The company raising its short term guidance but it lowered the long term projections going through 2030. Analysts had been expecting profit growth of 10%. It's now looking more like 6% going to 2030. The company also scaling back its EV ambitions, it released details of the technology that's going to power its first all electric Ferrari. We don't have pictures of the car yet. That's going to be next year, but it's going to be called the Electrica. It will have electric motors generating 1,000 horsepower, zero to 60 in 2.5 seconds. But it lowered its EV target. So EVs are going to account for 20% of its lineup by 2030. That's down from the 40% that it had projected. And if you look at other high end sports car makers, they're also delaying or throttling back their EV plans from Aston Martin to Lamborghini to Maserati. Now in its earning call in July, Ferrari said there's no indication that tariffs are impacting demand. Most of its models, Morgan, are sold out. The waiting lists are over a year. So this is not a story of rich people aren't spending or they're not buying Ferraris. This is a very expensive stock where any whiff of a moderation in profit growth is affecting the stock.

[Morgan Brennan]

Understood. And of course, the stock is down 15% right now, 1,000 horsepower, 2.5 seconds, 0 to 60 for their electric vehicle that they're designing. Do we know yet whether there's really a market for that out there? I mean, Ferrari, I think like vroom, you know.

[Robert Frank]

Well, that's the great point, Morgan. If you talk to the Ferrari collectors and a lot of the dealers, it's about that engine sound. Now there is going to be a way for this new electric car to have a sound. And there's a lot of technology around how they're going to create that sound. But it's not going to be a combustion engine and there will be demand. But in 2030, it's going to be 40% combustion, 40% hybrid and 20% EV. So that that's at least how they see it right now.

[Morgan Brennan]

All right, Robert Frank, thank you. Well, coming up, the arms race has so far primarily been between the US And China. There's a new entrant, one with an energy edge on both countries. That's next. Welcome back. Shares of Nvidia are up about 2% after the Commerce Department reportedly approved several billion dollars worth of its chips to the United Arab Emirates. For today's tech check, Christina Parts. And Avila digs into the Gulf states AI ambitions. Christina.

[Christina Parts]

Well, these chips could be worth billions of dollars and are heading to the Middle East. According to Bloomberg, the US Just greenlit exports to the UAE under a deal signed back in May And I'd just like to point out that Nvidia is declining comment right now. But it's happening as America really faces this massive power Crunch. Nvidia and OpenAI recently announced plans to build 10 gigawatts of data centers here in the United States. Gigawatts sounds very abstract, but that's enough to power 8 million employ American homes. The problem is no one knows where all of this electricity is going to come from. The Trump administration wants data centers running on natural gas, but GE Vernova, for example, is sold out of turbines through 2028. And while 90% of new US power comes from renewables, I should say President Trump said the federal government won't approve any more solar and wind projects. The power shortage is already hitting consumers. People in D.C. saw their bills jump $21 a month just this summer, with half driven by data center demand. The UAE doesn't have these problems though. Electricity for businesses cost 30% less than the United States. They run on natural gas from their own fields, plus nuclear. And one and a half billion dollars is now going to be flowing into new UAE data centers by 2027. American hyperscalers are also planning to operate a 5 gigawatt campus there. They're calling it Stargate as well. The UAE though, now has cutting edge Nvidia chips and cheap reliable power. The United States has the best AI companies. But an energy crisis, the real competition is isn't about building the smartest AI, it's about keeping the lights on while you run it. Morgan.

[Morgan Brennan]

Yeah, I know. I would argue this is still part of the whole US vs China AI arms race here because it is this idea of technological diffusion and basically creating an alliance tied to AI between the US and Gulf states, in this particular case the UAE to get that American made tech out there and that full stack integrated into other parts of the.

[Christina Parts]

World, which I have called personally digital colonialization. But in regards to China, the issue with China is that they don't. They are not power constrained either. So even if the chips aren't up to par and may not be as good quality as in video, they can stack and use more of lower quality chips because power is not constraining them over there. So that is another factor to consider. We're focusing on UAE need because right now that's where the story is. But China has that same advantage as the UAE when it comes to power.

[Morgan Brennan]

It's a key point. Is there an expectation that we're going to see other green lights lit here by the U.S. commerce Department where countries are concerned.

[Christina Parts]

I will only cite Wedbush because I can't opine on that. But they are expecting more of these deals to get the green light. And keep in mind, Jensen Huang, the CEO of Nvidia, has traveled around to the Middle east, has been with President Trump in all of these countries as they announced their sovereign AI data center buildout. So perhaps that is going to help this case when it comes to getting the green light for many of these licenses.

[Morgan Brennan]

Yeah. And of course, whether and how much that offsets any lost revenue from China. Christina Parts, Navalis, thank you.

[Christina Parts]

Thanks.

[Morgan Brennan]

Coming up, rare earths and critical minerals, those names are surging today. U.S. rare earth shares are up about about 13% right now. They're climbing more than 78% since the government took a stake just one week ago. Well, China's moves spur even more investments in domestic companies. We're going to discuss next.

[Rick Santelli]

December 11th. Join Melissa Lee and the team of traders in New York City for an all access celebration live and on air. Fast Money live trading, the holidays. Get your tickets now@cnbc events.com fastmoney.

[Morgan Brennan]

Welcome back to the exchange. Domestic rare earth stocks are soaring today after China tightened export controls on those critical minerals. Even further ahead of a possible meeting between President Trump and his Chinese counterpart Xi Jinping at the end of this month. NP Materials is up 4% on that news. USA Rare Earths up a whopping 13%. Also, just want to point out because we said this incorrectly before the break, government did not take a stake in USA Rare Earths. Last week. It was Lithium Americas. Those shares are up 40% since that stake was taken in Lithium Americas on October 1st. My next guest is expecting even more gains in that space. He's got a buy rating on both MP and usar. So for more, let's bring in George Gianarikas. Did I get that right? Analyst at can'taccord Genuity.

[George Gianarikas]

Perfect. Awesome.

[Morgan Brennan]

Great. George, welcome to the show. Let's start right there because there is an incredible amount of appetite and attention from investors into the rare earth space. However, the actual mining and then refining and then producing into magnets of rare earths, that supply chain takes a long time to stand up and we don't have a lot of it here in.

[George Gianarikas]

The U.S. that's correct. The problem for the United States is the vast majority of rare earths are processed in China. To your point, and even greater percentage of the magnets are made in China. So in order to establish independence, we need to bring that all back to the United States of Friendly countries. And that's starting with mp. It's starting with USA Rare Earths and other companies that are trying to basically fortify a supply chain in the United States.

[Morgan Brennan]

Yeah, I guess I'm wondering if the stocks are getting ahead of reality here.

[George Gianarikas]

Well, look, there's an enormous opportunity just from a magnet perspective. Our assumption is about 50,000 tons of rare earth magnets are needed per year in the United States for our consumption. That is expected to grow, particularly because of things like robots, not to mention EVs, wind turbines, industrial products, etc. Right now MP has plans to build 10,000 tons. USA Rares has plans to build 4,800 tons. So there's still an enormous gap. Right. So either those companies could continue to increase their production or others could help. So it's going to be a pretty wild ride over the next decade or so as the US, Europe, etc. Fortified magnet production. So there's a lot of room to run here for the sector.

[Morgan Brennan]

Yeah. And of course we are seeing the government and different parts of the government take stakes or convert funding into equity stakes in these companies. There's a lot of very interesting deal making happening. The criticism has been that is a form of state capitalism. Is it? Or is this just a way to get these supply chains online more quickly and give taxpayers some stake in the game?

[George Gianarikas]

We view it as the latter. I mean, look, what the government did with MP materials was brilliant. For years, for decades, China was artificially keeping the price of rare earths low to make our minds, our processing, our magnets uneconomic. So the only way to break through that is through something like what MP did with the government. It was an amazing move and it started this run basically for companies like usaits and others to help support mp, to help support our country in building more magnet manufacturing. So it was one of the only ways you could really break China's stranglehold over the United States.

[Morgan Brennan]

Let's talk nuclear, especially since you did initiate oklo as a buy$175 price target today.

[Jeff Curry]

Yeah, we did.

[George Gianarikas]

OKLO is an incredibly interesting company. They're basically through vertical integration, trying to break through some of the bottlenecks that have been, that have created stagnation in the build out of nuclear reactors in the United States. They're going to have their own asset ownership. They have a very interesting fuel strategy. It's an incredibly safe and unique reactor. So there's a lot of room to run for Oklahoma. There's a lot of work to do for them as well. But what's interesting about our country is that not only do we need more power, but nuclear as a percentage of that we think should grow well into the next decade and beyond. So we need a lot of power. Your previous segment was about powering AI. We need nuclear power, need a power broadly and just for interesting statistic, the US generally adds 50 gigawatts of power per year. We're starting to see that accelerate and we should probably double that just from an overall power perspective. And nuclear should grow as a percentage and really is off to the races for the next decade. Plus.

[Morgan Brennan]

How much of this hinges on changes to the regulatory landscape?

[George Gianarikas]

Well, the Trump administration has been very forward looking in trying to accelerate the process of getting reactors approved. OKLO has a significant stake in that. They have a very unique regulatory strategy. So we're doing as much as we can to help ease the process. And we should see new reactors coming online over the next several years. The United States and particularly in the 2030s. It should really start to accelerate.

[Morgan Brennan]

Will small modular reactors be disruptive to some of these more traditional nuclear players?

[Jeff Curry]

Sure.

[George Gianarikas]

I mean what's interesting about small modular reactors is they are what they sound like. They're small and they're modular. Which means that if you're a utility or a data center company or a developer, you don't need to put billions and billions of dollars in the ground to get one of these reactors stood up. You have to spend hundreds of millions of dollars potentially. So that makes it easier to digest. It makes them much more easily financeable. So it'll, we think over the Next, call it 10, 20 years, it'll be a mix. There'll be some conventional reactors, there'll be some small modular reactors. But we need both to be successful to see our energy mix increase in nuclear increases of percentage.

[Morgan Brennan]

All right. Thank you for joining me. Shares of Oklahoma down fractionally right now. Well, that's going to do it for us. Thank you for watching the Exchange. Tune in to closing bell overtime. We've got Gary Bettman from the NHL on power Lunch starts now.

[Christina Parts]

You've been listening to the Exchange. Make sure you're subscribed to get each episode every day, same time, same place. What are you doing in a meeting?

[Morgan Brennan]

That could have been an email.

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Losing interest.

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