Full Breakdown
Goldman Sachs Signals New Growth Phase for the HALO Trade
7/8/2026, 1:03:43 AM
New Phase for the HALO Trade
Goldman Sachs analyst Guillaume Jaisson said the “HALO” trade—long capital-intensive stocks versus short capital-light stocks—has posted about a 20 % year-to-date gain and is poised for a new growth phase. The firm expects stronger momentum as physical-asset companies regain strategic importance.
Background: Shift Toward Asset-Heavy Sectors
The HALO concept, coined by Ritholtz Wealth Management CEO Josh Brown, targets firms with extensive physical assets and low obsolescence. Goldman notes a market pivot from software-centric, asset-light businesses to infrastructure, manufacturing, and defense, a trend amplified by volatility from the Iran war. The shift reflects heightened investor focus on physical assets amid geopolitical tensions.
Key Analysts and Firms
Guillaume Jaisson leads Goldman’s HALO analysis, and his team maintains buy ratings on roughly half the stocks in the capital-intensive basket. Josh Brown’s HALO terminology provides the conceptual basis for the trade. Jaisson’s team also emphasizes energy-security and industrial-sovereignty as priority themes.
Performance Data and Sector Allocation
The HALO pair trade is up ~20 % YTD, with capital-intensive stocks narrowing valuation gaps versus capital-light peers. Goldman highlights infrastructure (Enel, E.ON), basic materials (Shell, BP), aerospace & defense (Airbus, Rheinmetall), manufacturing & consumer platforms (Volvo, BMW), and the physical technology layer (ASML Holding, ASM International). The firm expects future returns to be driven increasingly by earnings.
Implications for Investors
Goldman warns of “tactical positioning risks” after recent rallies and notes rising correlation between HALO and momentum factors, urging careful timing. The note also highlights that the HALO basket’s correlation with momentum factors has risen, amplifying short-term volatility. The firm argues many investors remain under-positioned in physical-asset firms, recommending a strategic tilt toward energy security, industrial sovereignty, and earnings-driven returns.
Goldman Sachs Official Outlook
Goldman’s official commentary stresses confidence in energy-security and industrial-sovereignty themes while maintaining caution on short-term volatility. The sector list reflects diversified exposure to infrastructure, defense, and technology hardware, supporting expectations of sustained earnings growth. Analysts anticipate that earnings growth will underpin the trade’s performance, especially in sectors where physical assets are essential.
Verbatim Quotes
- “Tactical positioning risks exist after a strong rally and the increasing correlation of HALO with the Momentum factor,” — Guillaume Jaisson, Goldman Sachs Analyst
- “However, longer-term allocations remain heavily skewed away from Value, suggesting investors remain under-positioned for a world in which physical assets, infrastructure and industrial capacity regain strategic importance.” — Guillaume Jaisson
- “Outperformance has been strong, and the shock ultimately reinforced our view,” — Guillaume Jaisson
- “The HALO pair trade, expressed as long Capital Intensive (GSSTCAPI) vs short Capital Light (GSSTCAPL) companies, is up around 20% year to date.” — Guillaume Jaisson
What’s Next for the HALO Trade
Goldman expects earnings growth to drive future returns, notes the ongoing convergence in valuations, and anticipates that momentum-factor dynamics will continue shaping the HALO trade’s performance.
