Goldman Sachs: HALO Trade Enters Earnings Phase as Global Capital Spending Hits 13% Growth

According to a report released by Goldman Sachs' European equity strategy team on July 7, the HALO trade—a strategy favoring capital-intensive stocks (heavy industry, energy, utilities) over asset-light stocks (software, services)—has completed its first phase of valuation recovery and is now entering a second phase driven by earnings realization. The HALO paired trade has surged approximately 20% year-to-date.

The shift is supported by an unprecedented surge in global capital expenditure. Goldman Sachs forecasts global capital spending will grow 13% in 2026, significantly above the historical median of 2%, with data centers, semiconductors, utilities, and defense expected to account for over 40% of total global capex. Heavy-asset stocks are projected to achieve earnings-per-share growth of 15–16% in 2026, compared to 10% for asset-light stocks—marking the first year in many years where capital-intensive companies will outpace their lighter counterparts in profitability growth.