The year 2026 is approaching its midpoint, with the global macro landscape undergoing profound reshaping. The reconstruction of the international monetary order, the revaluation of strategic resources, and inflation expectations triggered by high oil prices are presenting investors with unprecedented challenges and opportunities.

At the recent "Gentle Breeze and Flourishing Growth" Summer Strategy Session hosted by Guotai Asset Management, Zhu Dan, Head of the International Business Department and Fund Manager, shared perspectives on the global asset allocation strategy for 2026.

Market Narrative Shift: From "TACO" to "NACHO" on Wall Street

The key to understanding the current market lies in recognizing the fundamental shift in the dominant narrative. The previously popular market narrative was the "TACO trade," which was essentially a speculative bet based on expectations regarding the personal stance of specific decision-makers in geopolitics—specifically wagering that certain policymakers would back down at the last moment, triggering a sharp "V-shaped" rebound in risk assets. However, this logic has become inapplicable since entering the second quarter.

It has been replaced by the "NACHO trade." In the context of Wall Street, "NACHO" refers to a harsher reality: the Strait of Hormuz will "definitely not" reopen in the short term. Since March, the Strait of Hormuz, which handles nearly 30% of global crude oil trade, has been effectively closed for over two months. The magnitude of the resulting shock exceeds that of the oil crises of the 1970s.

While alternative pipelines and strategic petroleum reserves have temporarily mitigated the impact, strategic inventories are expected to be depleted around the end of June. If the strait remains closed by then, the global crude oil market will face a sharp expansion of the supply-demand gap, creating non-linear upward pressure on oil prices.

Concurrently, the "NACHO trade" narrative implies the ineffectiveness of U.S. Middle East strategy and potential loosening of the petrodollar system. This has more profound implications for assets, with assets negatively correlated to the U.S. dollar, such as gold, warranting close attention.

Energy Shortage Transmission and Ripple Effects: Supply Chains, U.S. Treasury Yields, and U.S. Stock Valuations Under Pressure

Under the "NACHO trade" narrative, crude oil shortages are exerting far-reaching impacts on global assets through multiple channels.

Commodity Market Supply Chain Restructuring

As the "mother of all commodities," crude oil shortages are triggering widespread ripple effects. For instance, Peru has restricted exports of industrial metals like copper and tin due to power shortages caused by energy deficits; Australia has seen logistics costs rise due to shortages of refined oil products, impacting supply chains for lithium and iron ore. These phenomena indicate that energy shortages are deeply penetrating physical supply chains beyond just price effects.

U.S. Treasury Yields Face Upward Pull

Calculations suggest that the inflation expectations implied by current crude oil futures prices are approximately 25 basis points higher than those implied by 10-year U.S. Treasury yields (equivalent to one Federal Reserve interest rate hike). This indicates that current U.S. Treasury yields may be underestimating the potential impact of oil prices. Furthermore, China's PPI has turned positive, and historically it has led U.S. CPI by about two quarters, suggesting U.S. inflation readings in the second half of the year may exceed expectations, putting upward pressure on U.S. Treasury yields.

Valuation Pressure on U.S. Tech Stocks

While U.S. stocks have recently hit new highs driven by strong corporate earnings, the sustainability of this trend is questionable. As the earnings season concludes, market focus is likely to shift back to macro variables. With the oil price floor rising, an increase in the risk-free rate will likely exert sustained valuation pressure on technology stocks. The U.S. stock market may enter a phase where earnings growth in tech stocks and rising interest rates offset each other.

Summer Allocation Strategy: Building a "Resilient" Portfolio with Tech and Energy

The specific allocation strategy is as follows:

Treat crude oil as the "core variable" and prepare scenario-based responses.

The policy choices of the new Federal Reserve Chair could be the overarching switch for the second half of the year. If the Fed maintains an accommodative stance, dollar depreciation and broad gains in commodities and U.S. stocks may continue, necessitating currency hedging for non-U.S. dollar investors. If the Fed pivots towards tightening, caution is warranted as risk assets may face broad pressure, and "cash is king" could become the dominant theme for a period.

Under either scenario, increasing exposure to oil and gas assets or positioning in the new energy industrial chain, which is highly correlated with oil prices, could be considered to hedge against the "long-tail risk" of high oil prices.

Build a "resilient" portfolio with a combination of technology and energy.

In the current market environment characterized by frequent "black swan" events, constructing a "50% technology + 50% energy barbell portfolio" can be considered.

The core logic is that backtesting shows technology stocks and energy stocks have exhibited complementary characteristics in most years, providing a hedging effect. This represents a "resilient" strategy choice to navigate the current complex market conditions.

Risk Disclosure: The views are for reference only and will be adjusted dynamically with market changes. They do not constitute investment advice or promises. The market involves risks, and investment requires caution. The assets mentioned in this article are expected to have higher returns and risk levels compared to bond funds and money market funds. If you intend to purchase related fund products, please carefully review the fund's legal documents, pay attention to relevant investor suitability management regulations, complete a risk assessment in advance, and purchase fund products with a risk level matching your own risk tolerance based on the assessment results. Past performance of indices does not guarantee future results and does not constitute a promise or guarantee of fund performance.

The MACD golden cross signal has formed, and these stocks are performing well.

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