Today’s issue in preview:
- AI demand is pushing this metal to all-time highs
- Master investor David Tepper is betting this down-and-out industry will rebound in 2026
- More reasons to be bullish: Stocks around the world soar to new highs.
AI demand is pushing this metal to all-time highs
Break out, advance, consolidate.
Break out, advance, consolidate.
Rinse and repeat.
That is the classic behavior of a multi-year bull market. Prices move into new, higher territory (the breakout), the trend rallies and makes the longs a lot of money (advancement), and then the trend takes a breather, moves sideways, and digests the gains (consolidate).
Then it does it all over again… and again… and again – the life of an uptrend.
Copper stocks have been doing this over the past year.
In May 2024, I wrote bullishly on copper’s future. The bull case went like this:
Copper is widely used as a conductor to build power grids, data centers, power lines, and communication networks. When demand for power grids, renewable energy, and AI power usage booms, copper demand goes up. Plus, copper supply is constrained due to a lack of new discoveries.
Since our note, copper mining stocks – as tracked by the Global X Copper Miner ETF (COPX) – have climbed 65%. Yesterday, shares broke out to new all-time highs. It’s now safe to say copper is in a raging bull market.
Despite the rally, copper stocks are not generating huge public interest. This is not a popular story. A lot of money could still flow into critical resource markets, such as copper, once the public catches on. I’m still long.
Advance, consolidate. Advance, consolidate. Rinse and repeat.
Master investor David Tepper is betting this down-and-out industry will rebound in 2026
As we start the year, there’s no shortage of trends trading at or near 1-year highs, including copper, gold, silver, big U.S. banks, AI semiconductors, European stocks, emerging market stocks, oil services, and robotics.
All these trends have strong momentum and could perform very well this year.
But what about out-of-favor trends?
What down-in-the-dumps trend could stage a strong rebound in 2026?
One of my votes here is the housing trade. It’s been clobbered and could stage a strong rebound in 2026.
In 2025, most housing-related stocks badly lagged the broad market. Some were down more than 25%. This underperformance was driven by two factors:
- A lack of new home supply means most newly built homes are unaffordable to most people.
- Existing home sales have stalled because current home owners have low mortgage rates they don’t want to lose after selling. This dynamic has “frozen” many housing markets.
This situation brought doom upon the housing trade in 2025. Stocks such as Trex (TREX, decking), Whirlpool (WHR, appliances), Ownings Corning (OC, insulation), JELD-WEN (JELD, doors & windows), Lennox (LII, HVAC), American Woodmark (AMDW), and Builders Firstsource (BLDR, diversified building products) all declined in 2025. The S&P Homebuilders ETF (XHB) was one of the worst-performing funds in 2025.
Home affordability has become a huge issue in U.S. politics. A large percentage of young voters can’t afford homes and are upset about it. Home affordability metrics are at all-time extremes, to the negative side.
Trump & Friends know this trend could cost them elections, so it’s likely they will make significant efforts to improve the situation, which would be positive for the housing trade.
In a sign of a possible turnaround, master investor David Tepper has taken a prominent position in beaten-up appliance giant Whirlpool. Tepper is a master of timing profitable megatrends. Any time he bets big on an industry, it’s worth noting.
To play a “relief rebound” in housing, you can dig into individual stocks such as Whirlpool. Investing alongside David Tepper is often an excellent idea. Or, you can buy the S&P Homebuilder fund. It’s called a homebuilder fund, but actual homebuilder stocks make up less than 50% of the fund. The rest of the stocks are building products, furniture, appliances, HVAC systems, and the like.
Will Tepper be right on the housing trade in 2026? I don’t know. But I believe it’s a bet worth making.
Tepper bets big on Whirlpool
Market Notes
- The VanEck Africa ETF (AFK), the Asia 50 iShares ETF (AIA), and the Emerging Markets iShares ETF (EEM) reached a new all-time highs today. The global stock market boom continues.
- The First Trust Global Wind Energy ETF (FAN) reached a new 1-year high today. It’s a bull market in all facets of electric power.
- Robotics leader Teradyne (TER) reached a new all-time high today. The robotics bull market continues.
- Lithium mining giant Albermarle (ALB) reached a new all-time high today.
- Big Pharma leader Merck (MRK) reached a new all-time high today.
