Money & Megatrends

December 10, 2025

By Brian Hunt

Inside today’s issue:

Are you long resources yet? One of the world’s top critical resource plays reaches an all-time high.
ExxonMobil nears all-time highs. The bull market in oil and gas stocks rolls on.
This AI Power trade looks ready to pop higher.
Another leader in the big EPC theme reaches a new high.

Are You Long Resources Yet? One of the World’s Top Critical Resource Plays Reaches an All-Time High

The critical resource industry is in a bull market. The latest evidence: Canadian stocks recently climbed to all-time highs.

Over the past three months, I’ve made the case that we are in a favorable environment for critical resources… one in which many individual resource sectors will generate strong returns.

Critical resources are the building blocks of the economy. Think raw materials like crude oil, natural gas, iron ore, copper, uranium, corn, and cotton.

Even today’s high-tech world of AI, apps, email, and Zoom calls is built on a “low-tech” foundation of steel, concrete, copper, lumber, and aluminum. Every day, our cars, trucks, and airplanes consume millions of barrels of fuel. Our lights turn on because we burn coal and natural gas.

Mining, extracting, planting, harvesting, processing, refining, and transporting critical vital resources is a multi-trillion-dollar business that affects every area of your life.

Recently, I’ve highlighted the uptrend in Brazil as evidence that we’re in a critical resources bull market, but it’s also worth highlighting Canada. As you can see in the chart below, stocks in the Great White North are soaring.

Canada is the second-largest country in the world by total area, after Russia. This means there’s plenty of area to hold big oil and natural gas deposits… huge tracts of timberland… giant mineral deposits… and enormous farms. Canada is a major player in oil and natural gas production, ranking in the world’s top five producers for both.

Since critical resource production is a big part of the Canadian economy, its stock market is sensitive to price trends in oil, natural gas, copper, and agricultural products. As I’ve highlighted many times this year, many resources are in uptrends. Copper is in a bull market. Gold and silver are in bull markets. Uranium is in a bull market.

The bull market in critical resources means a bull market in Canada. The iShares Canada ETF (EWC) is up 26% over the past year and recently hit an all-time high. We bet this uptrend continues.

It’s a bull market in Canadian stocks

ExxonMobil Nears All-Time Highs. The Bull Market in Oil and Gas Stocks Rolls On.

While we’re on the subject of making money in resources, it’s worth discussing ExxonMobil (XOM).

ExxonMobil is America’s largest oil company. It is the 800-pound gorilla of the oil and gas industry. ExxonMobil is a direct successor to John D. Rockefeller’s Standard Oil, a giant company started in the late 1800s.

These days, industry experts view XOM as not only the largest American oil company but also one of the best-managed. ExxonMobil is diversified globally, not just in reserves and production… but also across all energy-related business lines that are worth owning.

ExxonMobil’s dominance, asset quality, and stability have allowed it to increase its annual dividend every year for 43 consecutive years. It is one of THE “go to” stocks for money managers when they want a position in oil and gas.

On September 29, we highlighted the emerging leadership of oil and gas stocks and stated it’s time to be long this sector.

The bull case for oil stocks is simple. If the global economy is growing, oil demand will remain solid. However, importantly, U.S. shale oil production growth appears to be peaking. This would remove a critical and reliable source of production growth that has been in place for over a decade. Plus, oil is very cheap relative to gold and other assets, indicating good value in oil.

That’s the bullish forecast, but regular readers know we care a lot more about what the market thinks of fundamentals than the fundamentals themselves. You can believe in a bullish market forecast until you’re blue in the face, but if that market is moving lower, then your forecast isn’t worth much.

As you can see from the 1-year chart of XOM below, the market likes the bull case for oil and gas. ExxonMobil has returned 14.8% this year and is nearing all-time highs. The bull market in oil and gas stocks is off and running.

Oil and gas leader ExxonMobil closes in on all-time highs

This AI Power Trade Looks Ready to Pop Higher

Short-term traders take note: The utilities sector is oversold and due for a rebound.

Back in April 2024, I sent a note to colleagues highlighting the emerging uptrend in utility stocks and how the AI data center boom would increase electricity demand.

The bull case for AI data center-driven power demand is simple: The world’s largest and richest companies (Google, Microsoft, Amazon) are in an epic race to build the world’s most useful AI applications and infrastructure. They see this race as “win it or die.” In pursuit of victory, big tech is investing trillions of dollars into AI infrastructure. This infrastructure consumes enormous amounts of electricity and will continue to do so in the future.

A good way to play this megatrend is by owning electric power providers (utilities) that are best positioned to sell power to the AI data center operators.

The market realizes this and has sent the big utility stock fund – the State Street Utilities Select Sector ETF (XLU) – into a strong uptrend.

However, no uptrend – no matter how powerful – runs higher in a straight line. Uptrends must take breathers. They must go through short-term corrections. They swing up, and they swing down. It’s just how the market works.

In the case of XLU’s uptrend, shares are swinging down right now. The fund is down 8.6% from its October highs. While this might not sound like a big drop, it’s actually a large one for a relatively stodgy and stable industry group such as utilities.

I’m a long-term bull on AI power demand and utilities, so I see this correction as an opportunity to buy in anticipation of an oversold rebound.

The “Utes”: Oversold and due for a rebound

Market Notes

Diversified mining giants Rio Tinto (RIO) and BHP Billiton (BHP) reached all-time highs today. These new highs indicate it’s a bull market in critical resources.
U.S. financial giants Goldman Sachs (GS) and Citigroup (C) reached new all-time highs today. These are bullish economic signals.
The U.S. Global Jets ETF (JETS) reached a new 1-year high today. This ETF invests in major U.S. airlines.
Major Engineering, Procurement, and Construction (EPC) firm Mastec (MTZ) reached a new all-time high today.
U.S. auto giant General Motors (GM) reached a new all-time high today.
U.S. trucking leader J.B. Hunt (JBHT) reached a new 1-year high today.