Podcast Summary: The Exchange (CNBC)
Episode: The Odd Commodity Out, LULU Lows and Rare Earths Soar
Date: October 9, 2025
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.
Key Discussion Points & Insights
1. Metals Surge, Oil Lags: The State of Commodities
(02:38–10:01)
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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.
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Jeff Curry (Carlyle, Chief Strategy Officer):
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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)
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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.
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)
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.
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.
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.
- AI Hype vs. Reality:
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)
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.
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)
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)
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
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.
