Money & Megatrends

October 17, 2025

By Brian Hunt

 

Inside today’s issue:

• A major new development for one of our top emerging megatrends
• Please console a bear. We are in the confines of a broad global stock market boom

 

A Major New Development for One of Our Top Emerging Megatrends

 

Nine days ago, the broad market (as measured by the S&P 500) reached a new all-time high. Since then, the market has been mired in “Trump tariff hell.” The S&P has suffered several sharp declines since the October 8 high.

Some of the market’s more speculative stocks and themes have declined more than the broad market. High profile leaders Coinbase, Robinhood, and Astera Labs are down more than 10% since the high.

All this has many investors spooked. Another Trump post could hammer their 401(k)s. One more after that could lead to a recession.

Conspicuously missing from the list of themes that have suffered recently is the Biotech Revival theme.

Yesterday, the biotech fund we track – the S&P Biotech ETF (XBI) – reached a new 52-week high. This is an important development.

The biotechnology sector is full of companies working on cures and treatments for hundreds of different diseases. When investors grow interested in this industry, the returns can be incredible. During the last biotech bull market, the sector as a whole soared 300% over a four year period.

However, the biotech sector has been a river of no returns since late 2021. Rising interests and a lack of interest in the sector have kept stock prices low.

On September 19, we highlighted XBI’s budding uptrend and noted that here in 2025, you can have your biotechnology theme with an “AI kicker.”

I believe the fusion of AI + biology is about to generate dozens of compelling stock narratives over the coming years. Researchers running intelligent AI programs will be able to run millions of digital simulations for every drug and treatment. These models will study how drugs affect different people. This will put drug development into overdrive… and create many big stock winners.

Companies that use AI to “crack the code” for various diseases and drugs will enjoy 100%… 500%… even 1,000+ stock rallies.

As you can see from the 1-year chart of XBI below, the Biotech Revival theme is unphased by the current market weakness.

Biotech stocks are considered highly speculative. During broad market declines, speculative themes and companies tend to get hit the hardest. When a speculative theme bucks the norm and holds like a rock during a broad market decline, it’s a clue the theme is very strong. On Thursday, XBI reached a new all-time high. It’s up 14% over the past month. We are impressed… and still long.

 

We are in the confines of a broad global stock market boom.

 

As we head into the weekend, let’s remind ourselves of something important happening outside U.S. borders.

A look at our Global Trend Tracker database shows we are still in the confines of a broad global stock market boom.

This week, we saw new all-time highs for funds we track from: France, Belgium, South Korea, Switzerland, Finland, Colombia, Spain, Taiwan, Peru, and Africa.

Since the markets are up so much over the past few years, there’s no shortage of bears that say we’ve climbed too far… that market apocalypse is ahead.

The bears may sound clever, but they are also wrong… as judged by the only judge that matters: The trend. The trend around the world is one of higher stock prices.

I see this broad global stock market strength paired with the uptrend in U.S. stocks and think, “Sure, the global economy has issues… but there’s enough positives to power a global stock market boom. I guess the markets like Trump’s tariff wars.”

 

• Two weeks ago, we noted that oil stocks broke out to new 1-month highs and may be on the verge of starting a new bull market.
• So far, the market says “No” to our thesis. Since our note, many of the oil stock funds we follow have declined and dropped back into “neutral trend” status. Oil bulls will have to wait to make money.
• Crypto bulls must wait as well. Since reaching a high around $126,000 early this month, Bitcoin has sunk to a new 1-month low of $106,000. Bitcoin is back to the same price it was in May.