The big bull market most people are ignoring

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Today’s issue in preview:

• The big bull market most people are ignoring

• The longevity business is booming. Here’s how that can make you richer

• A unique major retailer soars to a new high. Are you heeding its message?

• Learn our Top Themes to buy now

The big bull market most people are ignoring

Credit: eric1513

In yesterday’s issue, we detailed how the investment community has been so preoccupied with rising interest rates and the health of the AI trade that it’s been easy to forget that our “Boomer healthcare” megatrend is thriving and generating stock market winners.

But while we’re on the subject of bull markets most people aren’t noticing, let’s talk about the bull market in commodities.

While most people were focused on interest rates and AI, the iShares S&P GSCI Commodity-Indexed Trust (GSG) reached a new one-year high.

The GSG ETF provides investors with diversified exposure to major commodities, including crude oil, natural gas, gold, copper, wheat, and livestock.

The fund tracks a broad commodity futures index weighted by global production, with particularly heavy exposure to energy. It allows investors to capitalize on rising commodity prices without storing barrels of oil or pallets of copper in the garage.

Over the past 18 months, I’ve made the case that we are in a favorable investment environment for such commodities… and we’ve earned strong returns in oil, gold, copper, and oil-and-gas pipelines.

The long-term bull case for many commodities is very simple and very compelling: Roughly 5 billion people worldwide have living standards far below those enjoyed in wealthy nations such as the U.S.A., Canada, Japan, and Germany. A huge portion of those people live in India, Indonesia, Pakistan, and Africa.

Thanks to wireless communications, many of these people can see how people in wealthier nations live. They see cars, TVs, big homes, iPads, and nice clothes.

As many of those people grow wealthier and strive for the things they see us enjoying in the West, they’ll pay for better housing, transportation, appliances, and higher-quality food. All of these improvements require enormous quantities of energy, copper, steel, and other commodities.

Even modest increases in consumption, multiplied across billions of people, could generate staggering new demand. And because developing new mines and energy projects can take years, supply may struggle to keep pace, which should keep many commodity prices elevated and create investment opportunities.

That’s the bull case. But regular readers know I care a lot more about what the market thinks of any stock, trend or theme than what any one person thinks of it, including me. You can be bullish or bearish on a trend all you like, but if that trend is moving strongly against you, then your idea isn’t worth a hell of a lot in my book.

In the case of commodities, the market is enthusiastically backing the bull case. Largely powered by rising oil prices, GSG has returned 63% over the past year and recently reached a new one-year high. Other high-profile physical commodity ETFs we like, such as the Harbor Commodity All-Weather Strategy ETF (HGER) and the SummerHaven Dynamic Commodity Strategy No K-1 ETF (SDCI), sport very similar price action.

The giant business, tech, and demographic trends that shape our world tend to play out in five or more years, not five months. This means the market trends they manifest play out over the same time periods. In other words, trends tend to persist. With this trend truism in mind, I expect the commodities bull market to continue.

The longevity business is booming. Here’s how that can make you richer

Credit: jetcityimage

It looks like investors are coming around to investing in healthcare, longevity, and GLP-1 drugs.

As evidence, we point to the soaring share price of our favorite longevity and healthcare stock, Eli Lilly (LLY).

Last week, the stock gained 6.6% on strong volume… and gained 4.8% this morning, reaching a new all-time high.

Back in July, we published a research note on how spending on longevity is rising now and is poised to continue for many years.

Data from the Federal Reserve shows that between 15 million and 20 million baby boomers are millionaires. More than 1 million boomers are worth more than $10 million. As mentioned above, the U.S. population aged 80 and older is projected to roughly double, from 14.7 million in 2025 to 29.4 million by 2045.

This is the largest group of wealthy people in history.

This means there are many motivated, older, wealthy people out there who can spend big on longevity.

One of the leaders of this investment trend – you could even call it the poster child – is drug giant Eli Lilly.

Lilly is the world’s largest seller of glucagon-like peptide-1 (GLP-1) medications. GLP-1 drugs mimic a natural gut hormone. They control blood sugar by stimulating insulin release, thereby slowing digestion and reducing appetite.

Over the past 5 years, this class of medications has exploded in popularity. A representative of healthcare giant IQVIA says GLP-1 therapies for weight loss generated $55 billion in sales over the past 12 months, which is up from $2 billion in 2022.

Many people who take GLP-1 drugs see drastic weight loss in less than six months… which should extend their lives.

Studies indicate that GLP-1 drugs may also lower cholesterol, slow cancer growth, and reduce the risk of cardiac disease. They are also prescribed to treat sleep apnea, which is a pervasive problem whose effective treatment should extend many lives.

In other words, GLP-1s are believed to be the closest thing to “miracle longevity drugs” that we currently have.

As a result, Eli Lilly’s sales are skyrocketing. The company recently reported quarterly sales growth of 48%. The results were driven by a 91% jump in demand for Lilly’s weight-loss drug, Mounjaro.

Soaring GLP-1 revenues are driving strong returns for Lilly shareholders. The stock’s recent breakout has put the stock up 63% over the past 12 months. The bull market in healthcare and longevity is booming.

A unique major retailer soars to a new high. Are you heeding its message?

Credit: patty_c

If you’re feeling down on the U.S. economy… or if you’re looking for some good news in a sea of negativity, check out the price action in “WSM.”

It may cheer you up.

WSM is the ticker of Williams-Sonoma… one of my favorite ways to gauge the health of the American consumer. This morning, the stock surged 2% to reach a new all-time high.

Williams-Sonoma is one of America’s largest furniture, décor, and “all things kitchen” retailers. It operates through its popular Pottery Barn, West Elm, and Williams-Sonoma stores.

With a huge-for-a-specialty-retailer market cap of $29.9 billion and over 600 stores across the country, WSM is a pervasive presence in America’s shopping malls and homes.

Not in all homes, however.

WSM sofas, chairs, kitchenware, cabinets, and beds are on the pricier side of their markets. They aren’t on the super-high end, but they most certainly are not IKEA.

Most WSM offerings are considered “accessible premium.” The company targets mid- to high-end consumers who can drop $10,000+ on a bedroom set or $1,000 on pots and pans.

This year, I’ve written over a dozen research notes detailing how many consumer-spending stocks, such as WSM, are signaling that the American consumer is alive and well. This impressive market action is in stark contrast to mainstream media reports citing the popular but flawed Michigan Consumer Sentiment Survey and its dismal consumer sentiment readings.

I’ve been investing and reading financial research for 28 years. During all that time, I’ve heard many famous pessimists forecast the death of the American consumer. Well, not even the dot-com crash or the 2008 financial crisis could knock it out.

This is why I say that in the event of global thermonuclear war, two things will survive. Cockroaches and the American consumer.

As an investor, you can base your decisions on bearish stories written by journalists who don’t know a bull market from a flea market. You can base your decisions on forecasts issued by professional pessimists who predict nothing but doom and gloom.

Or you can focus on reality. You can focus on what’s happening in the real world. Right now, reality says the enormous Williams-Sonoma is in an uptrend, and consumers are doing just fine.

Does the U.S. economy have risks, distortions, and flaws? Absolutely. It always does. But making money in stocks and business is never the result of being in a problem-free climate. It’s about being in an environment where the big negatives are overwhelmed by even bigger positives.

Right now, those positives are powerful enough to send one of the market’s premier consumer spending stocks to a new high. This kind of business does not boom when the country is struggling!

Market Notes

• Our recommendation to get long oil and gas stocks continues to pay off. Oil giants Chevron (CVX), ConocoPhillips (COP), Exxon Mobil Holdings (XOM), Canadian Natural Resources (CNQ), EOG Resources (EOG), Permian Resources (PR) and Suncor Energy (SU) hit new one-year highs today.

• The Boomer healthcare theme we recommended continues to do well. Pharma giant Pfizer (PFE), along with Takeda Pharmaceutical (TAK), reached new one-year highs today. Elevance Health (ELV) also hit a new high.

• Payment giant Visa (V) just hit yearly highs. This is a positive sign for the economy.

• Payroll and HR software leaders Paycom (PAYC) and Automatic Data Processing (ADP) just hit new one-year highs as software stocks continue to bounce back post-SaaS-pocalypse.

• Leading neoclouds Coreweave (CRWV) and Iren (IREN) hit new one-year lows amid financing fears.

• Smaller-cap uranium and nuclear plays Centrus Energy (LEU) and NuScale Power (SMR) both hit new one-year lows today.

Regards,

Brian Hunt
Editor, Money & Megatrends

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