The first trading day of the Year of the Horse is approaching. Which sectors will become the "dark horse" in asset allocation for the Year of the Horse?

Year of the Snake, welcoming the Year of the Horse. On the occasion of the 2026 Spring Festival, Futures Daily invites experts from major institutions to review the current macro asset market trends and identify core allocation opportunities and high-quality investment tracks for the new year.

The first trading day of the Year of the Horse is approaching. Which sectors should be prioritized for deployment in the new year, and how can asset allocation be optimized for steady profits? Li Ershi, Chief Macro Analyst at Guotou Futures, combines market trends from recent years to offer insights on asset allocation logic, potential sectors, and operational strategies for the Year of the Horse.

Domestic Market Enters Re-Inflation Trading Phase

Li Ershi states that since 2024, the domestic market has entered a re-inflation trading phase.

“Last year, macro policies in China were strengthened, coupled with the Federal Reserve’s shift in monetary policy, leading to a reassessment of the value of major Chinese assets. For major asset classes, this means increased difficulty in government bond trading, a strong performance in the stock market, and the spread of re-inflation trading logic in commodities.” According to Li Ershi, the past few years saw divergence among commodity sectors without a broad rally. Under ample macro liquidity, metals performed strongly in commodities, and technology led gains in the stock market.

Li Ershi believes that after entering the Year of the Horse, the market has two relatively clear directions: first, as the RMB appreciation trend is established, a positive environment for domestic assets still exists; second, with the sharp rise in prices of financial assets, the market structure is likely to undergo rebalancing, meaning “profit-driven trading will rise, and re-inflation trading will spread.”

“From the stock market perspective, after significant gains in the technology and non-ferrous metals sectors, the valuation of some downstream large-cap consumer sectors is gradually becoming apparent; in commodities, after several years of strength in metals, other sectors related to the domestic economic cycle or influenced by policy changes may show some performance, and the valuation of precious metals may give way to energy sectors,” Li Ershi explains.

Which Sectors Could Become Asset Allocation ‘Dark Horses’?

“The new market structure in 2026 is taking shape, and some previously underperforming sectors are expected to stand out and become ‘dark horses’ in asset allocation for the Year of the Horse,” Li Ershi says.

He notes that during the cross-year rally from late 2025 to early 2026, the market continues its previous strong structure—metals lead in commodities, while technology and resources sectors outperform in stocks. The core driver behind this is a “liquidity feast”: on one hand, the Federal Reserve released ample liquidity at the end of 2025; on the other, the RMB strengthened amid offshore capital settlement, jointly optimizing market liquidity and further boosting related sectors. It’s important to note that volatility in these strong sectors has begun to increase, and both stock and commodity markets are developing new structural features. Considering macroeconomic conditions and sector logic, Li Ershi believes the following three sectors may become ‘dark horses’ in asset allocation in the Year of the Horse.

First, the energy sector: in recent years, the gold-oil ratio has risen to high levels, indicating a need for adjustment, closely related to geopolitical developments. Under uncertain geopolitical and economic conditions, precious metal prices remain supported, and non-ferrous metals stay strong, but energy prices have been suppressed for a long time. Once geopolitical tensions shift, it could break the old market pattern and drive a recovery in the energy sector.

Second, the agricultural products sector: in recent years, ample supply has been a key reason for its weak performance. Currently, valuations are low, and there is a positive correlation with the energy sector. If the energy sector reverses, agricultural commodities could benefit. Additionally, geopolitical tensions may trigger fluctuations in grain prices, creating potential long opportunities.

Third, the black metals sector: affected by the downturn in real estate and construction industries over the past few years, this sector has been weak. If future domestic economic policies focus on “expanding domestic demand,” and substantial changes occur, the real estate and construction sectors may see new growth opportunities, allowing the black metals sector to break through based on potential expectations.

“From an inflation perspective, macro price indices have remained low. The ‘dark horse’ sectors in 2026 will fundamentally need to be identified from the core chains driving PPI and CPI,” Li Ershi states.

Traders in 2026 should optimize their allocation strategies. For different groups, Li Ershi offers targeted advice: high-net-worth traders who can tolerate high volatility and hold multiple asset classes should shift from concentrated to diversified and balanced portfolios, controlling risks while sharing the benefits of market expansion; for the general traders, given the high valuation margins in the market, it’s advisable to avoid chasing hot assets at high levels and to remain patient with assets that have safety margins, waiting for driving factors to emerge.

(Article source: Futures Daily)