Wealthion Macro Bites 11/4/25

The Commerce Department and Pentagon pledged financing and potential equity stakes in (private) U.S. rare-earth producer Vulcan Elements.  Commerce signed an LOI to provide $50M from the ’22 Chips Act to purchase equipment to produce permanent magnets and the Pentagon’s Office of Strategic Capital will provide a $620M direct loan (to combine with $550M in private capital) to build a 10kt U.S. magnet facility.  Vulcan partner ReElement Technologies will also receive an $80M direct loan from the Pentagon to expand its rare-earth recycling and processing capabilities.  The Pentagon received an undisclosed amount of warrants to buy stakes in closely held Vulcan and ReElement.

At a Hong Kong Monetary Authority summit, several Wall Street executives advised investors to brace for an equity correction in the next 12 to 24 months.  Capital Group CEO Mike Gitlin noted that despite strong earnings, “What’s challenging are valuations.”  Morgan Stanley CEO Ted Pick said “markets seem expensive,” and termed a 10% to 15% drawdown as “a healthy development.”  And Goldman Sachs CEO David Solomon observed 10% to 15% corrections occur during positive cycles and allow “people to reassess.”

Sam Altman’s OpenAI signed a 7-year $38B deal to buy cloud services from Amazon and said it would spend $1.4T to develop 30 gigawatts of computing resources (enough capacity to power 25M homes) with targets to add 1 gigawatt of compute every week ($40B capital cost).  For reference, OpenAI’s trailing 12-month revenues totaled just $13B.  We can only scratch our heads…

Reuters reports that Glencore is planning to close its Horne smelter (Canada’s largest copper metal-producing operation) due to environmental issues and the cost of required upgrades.

October ISM Manufacturing PMI registered 48.7 (vs. 49.5 est. & Sept. 49.1), its eighth consecutive month in contractionary territory. 

After four months of consistent increase, total ounces in gold ETF’s tracked by Bloomberg declined 1.6M ounces ($6.4B) in past two weeks.