Here’s the megatrend to own in the wake of the Democrats’ victory

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Today’s issue in preview:

• Here’s the megatrend to own in the wake of the Democrats’ victory

• A quiet corner of the market is making investors a lot of money

• This cheap, beaten-up sector could start paying investors soon

• Learn our Top Themes to buy now

Here’s the megatrend to own in the wake of the Democrats’ victory

Credit: halbergman

Last night, the Democrats won control of Congress in a “blue wave” of electoral victories across America.

And now, a new era of political battles can begin.

Barrels of digital ink have been spilled in reports and articles about what investments will do well in this new environment. Barrels more will be spent over the coming months.

Our take on who wins and who loses?

I believe a lot of the bold, assured takes out there are hot air. Nobody knows for sure.

So, rather than putting all of our eggs in trying to predict the markets, we will continue to jump on the trends the market gives us… which is how we’ve compiled our outstanding track record and scored wins in a diverse array of industries and themes including oil and gas pipelines, biotech, healthcare diagnostics, oil stocks, cybersecurity, semiconductors, and critical metals.

Our edge isn’t prediction. It’s reaction. We don’t need to know what’s coming. We need to know what to do when it arrives.

However, I am still confident that the Made in America megatrend, which has generated many winners for us, will keep on trucking in this new political environment.

No matter who is in the White House or who controls Congress, this world-shaping megatrend remains one of our highest conviction long-term bets. And most importantly, the market agrees with me. Direct beneficiaries of this trend are clear market leaders right now.

Back in January, I made the case for investing in companies that supply critical equipment and services for building and operating today’s high-tech factories.

The bull case here is simple…

President Donald Trump – along with many business and military leaders on both sides of the political aisle – believes that the U.S. has outsourced far too much of its industrial capacity to China over the past 30 years. We outsourced significant portions of our semiconductor, appliance, medicine, weapons, and machinery production.

We outsourced the capacity to produce and process critical resources, such as rare earth elements.

The COVID-19 pandemic showed that depending on other countries for critical economic inputs makes the U.S. economy less safe and secure. To put it bluntly, it is very stupid not to produce products critical to national security, like AI semiconductors, within our own borders… especially when we are in an economic and geopolitical “great powers” contest with China.

Trump has staked his legacy and reputation on greatly expanding our industrial base… and he’s working with business leaders to invest trillions to pursue this goal.

Collectively, major American companies such as Apple (AAPL), Nvidia (NVDA), Micron (MU), IBM (IBM), and Eli Lilly (LLY) have announced more than $1.5 trillion in planned U.S. investments spanning advanced manufacturing, new factories, research facilities, and domestic supply chains.

The Semiconductor Industry Association projects that U.S. semiconductor manufacturing capacity will increase 203% between 2022 and 2032, compared with just 11% growth during the preceding decade.

In Money & Megatrends, we’ve capitalized on this “Made in America” megatrend with strong returns in robotics, factory automation, and machine component makers such as Cognex (CGNX), Ouster (OUST), and RBC Bearings (RBC). Recently, we’ve highlighted uptrends in winners Johnson Controls (JCI), Reliance Steel & Aluminum (RS), and Emerson Electric (EMR).

I see the Made in America megatrend as the ultimate trend both parties can support.

Enormous efforts to expand our domestic manufacturing base can yield benefits and generate press that both parties can enthusiastically support: Greater U.S. security. Greater U.S. productive capacity. Economic growth. The creation of good construction and manufacturing jobs. Revitalization of industrial areas that have experienced decline for decades.

But don’t take my word for any of this. Take the market’s word. As we’ve detailed recently, many companies with heavy exposure to U.S. industrial investment and activity are current market leaders.

For example, high-tech, on-demand manufacturer Xometry (XMTR) – which we made one of our Made in America “picks to click” in June – just reported 40% year-over-year revenue growth and surged to an all-time high this week.

The bull markets in the likes of Xometry, Johnson Controls, Emerson Electric, Reliance, and others have broad bi-partisan appeal. They make great long-term economic sense. The Made in America megatrend is poised to continue.

A quiet corner of the market is making investors a lot of money

Credit: OpenAI

Apparently, the market likes the idea of a Democratic Congress and its implications for healthcare.

This morning, our Global Trend Tracker reported that today is one of the strongest trading sessions for the healthcare industry all year.

The big broad list of healthcare firms leading the market, making money for shareholders, and surging to new one-year highs includes:

Amgen (AMGN): A $255.6 billion biotechnology giant developing treatments for cancer, inflammatory diseases, osteoporosis, and cardiovascular conditions.

Edwards Lifesciences (EW): A $56.6 billion medical device manufacturer specializing in artificial heart valves and minimally invasive treatments for structural heart disease.

Becton Dickinson (BDX): A $55.6 billion medical technology company producing needles, syringes, diagnostic systems, and hospital equipment.

Mettler-Toledo (MTD): A $34.3 billion manufacturer of precision weighing instruments and analytical equipment used in laboratories, pharmaceutical research, and industrial manufacturing.

Bruker (BRKR): A $9.4 billion scientific instruments manufacturer supplying advanced analytical equipment for biotechnology, pharmaceutical research, and laboratory testing.

Healthcare Services Group (HCSG): A $1.8 billion company providing housekeeping, laundry, and dietary services to nursing homes and senior living facilities.

Medtronic (MDT): A $131.6 billion medical technology leader manufacturing pacemakers, cardiac devices, surgical equipment, and advanced treatments for chronic diseases.

Haemonetics (HAE): A $5.7 billion medical technology company specializing in blood collection, plasma processing, and hospital blood management systems.

Zimmer Biomet (ZBH): A $20.8 billion orthopedic device manufacturer producing artificial hips, knees, surgical implants, and robotic-assisted surgery systems.

LivaNova (LIVN): A $5.1 billion medical technology company developing heart-lung machines and implantable nerve stimulation devices for epilepsy and depression.

Hinge Health (HNGE): A $10.1 billion digital healthcare company using AI, wearable technology, and remote physical therapy to treat back, joint, and muscle pain.

Tenet Healthcare (THC): A $22.6 billion healthcare operator running hospitals, outpatient surgical centers, and healthcare management services across the United States.

In addition to these individual firms, the world’s largest healthcare stock ETF – the Health Care Select Sector SPDR Fund (XLV) – reached a new all-time high. The Invesco S&P 500 Equal Weight Health Care ETF (RSPH) also reached a new all-time high.

For more than three years, I’ve made “Boomer healthcare” one of my highest conviction long-term investment themes. We don’t know of another investment research publication that has written more bullishly, more often about this booming industry than we have.

Over the past year, we have published more than two dozen pieces on opportunities in drug development, biotechnology, senior living facilities, genomics, cardiology, diagnostics, and more.

Our bullish stance has produced a parade of home runs, with the healthcare industry dominating the stock market’s list of new highs over the past year.

Healthcare stocks are generating extraordinary returns because they are benefiting from several megatrends simultaneously. One is the enormous Baby Boom generation entering the phase of life when healthcare spending skyrockets.

And two: extraordinary innovation in the healthcare sector. Thanks to advances in genomic sequencing, AI-powered analytics, imaging technology, and preventive treatments, healthcare is becoming much better and more personalized. This is driving strong demand for all kinds of new tests, tools, and treatments.

After all, when a useful and important service you buy gets much better, you typically buy more of it.

The diverse list of new highs detailed above indicates that the market believes our incoming political regime will do little to slow the bull market that has treated us so well.

I am fully aware that I may lose readers when I check in on the “juggernaut-like” healthcare bull market. People don’t find it nearly as interesting as Elon Musk’s latest venture or the latest AI semiconductor chip.

I’ve devoted so much attention to healthcare because it has paid off like a broken slot machine for us. It is like a piñata we keep hitting every week, yielding rewards each week. The healthcare gold rush is a trend that is paying us.

It’s like the stock market version of what the famed bank robber Willie Sutton said. When asked why he robbed banks, Sutton said, “Because that’s where the money is.”

Given the very large, long-term nature of the Boomer healthcare megatrend, we expect solid returns to continue.

This cheap, beaten-up sector could start paying investors soon

Credit: chittaratlert

Are the beatings over?

Can we start making money in U.S. housing again?

Or at the very least, will the U.S. housing industry get “less terrible” over the next 12 months?

Recent price action in some leading homebuilding materials and equipment suppliers suggests that the answer to those questions is “yes.”

Although 2025 was a strong year for many stock indexes and industries, the homebuilding sector was a loser.

In 2025, most housing-related stocks badly lagged the broad market. We’re talking about companies involved in outdoor decking, appliances, hardwood floors, HVAC systems, plumbing supplies, roofing, insulation, tiling, and water heaters.

This underperformance was driven by two factors:

1. A lack of new home supply means most newly built homes are unaffordable to most people.

2. Existing home sales have stalled because current homeowners 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), Owens Corning (OC, insulation), JELD-WEN (JELD, doors & windows), Lennox (LII, HVAC), American Woodmark (AMWD, cabinets), 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.

This weak performance attracted interest from investors who like to buy cheap, beaten-down “cyclical” industries in anticipation of better times ahead. These bargain-hunting investors are starting to get some good news… and starting to see rays of light in the darkness of the homebuilding industry.

This week, Trex – America’s largest maker of wood-alternative decking – reported its third-quarter business performance. Revenue climbed by 26%. Earnings came in higher than Wall Street estimates. It also reported a strong revenue outlook for the next year. These strong results powered the stock to a new one-year high.

Additionally, Mohawk Industries (MHK) – America’s largest flooring maker – recently reported a strong earnings outlook that powered the stock to a new one-year high.

Rounding out strength in the housing materials and services theme are Griffon (GFF, garage doors), Carlisle Companies (CSL, roofing), and Latham Group (SWIM, pools), and Stanley Black & Decker (SWK, power tools).

Each of these firms is at or near a new one-year high.

Wait a minute…

Isn’t the housing market supposed to be terrible right now?

Well, let’s remember that the stock market is the world’s greatest forecasting mechanism. It tends to look ahead 6-12 months. When an industry is in a recession, its stock prices will rise before the news media announces it is recovering.

When an industry seems to be doing well, its stock prices will decline before the news covers its downturn. This is often called “discounting” or “pricing in” the future.

The emerging strength in homebuilding product and materials stocks tells us this beaten-down industry may be exiting its big downturn.

Over the past month, we have published a series of research notes on bull markets in Visa (V), Mastercard (MA), premium retailer Williams-Sonoma (WSM), electronics retailer Best Buy (BBY), and hotel operators such as Marriott International (MAR).

In each one, we concluded that the American consumer and the economy it powers are not in the dumps as the mainstream media tries to make us believe, but are actually doing quite well.

The companies above are sensitive to the health of the American consumer. Their fortunes rise and fall with America’s ability to spend money on vacations, clothes, furniture, household goods, and entertainment. They don’t soar to new highs in a weak economy.

These economically sensitive firms are important “real world” indicators. They almost always do a better job of telling us what is happening in the economy than any media outlet or economist. And their uptrends are moving in a bullish upward direction for the U.S.A.

It would be great to add the U.S. housing industry and its sub industries to this list. The new highs listed above are very encouraging signs. I’ll keep you apprised of how this important trend develops.

Market Notes

• The American consumer continues to spend with enthusiasm. Payment giants Visa (V) and Mastercard (MA) reached new highs today. They were joined by consumer spending stocks like Etsy (ETSY), Victoria’s Secret (VSCO), and SharkNinja (SN).

• Regional banks United Bankshares (UBSI), United Community Banks (UCB), CVB Financial (CVBF), and CNB Financial (CCNE) all hit new highs. When Main Street lenders break out, it tells you credit and local economies are healthy.

• Tech supergiants Apple (AAPL) and Microsoft (MSFT) reached new all-time highs today.

• Media and entertainment giant Disney (DIS) reached a new one-year high today.

• Hotel giants Marriott (MAR) and Hilton (HLT) reached new all-time highs today.

• Auto giant General Motors (GM) reached a new one-year high today.

• Uranium mining leader Cameco (CCJ) reached a new one-year low today.

Regards,

Brian Hunt
Editor, Money & Megatrends

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