Tianfeng Research has released its outlook for major asset class performance in 2026.
Looking ahead to 2026, the firm's ranking for major assets is as follows: A-shares > US stocks > copper > gold > US Treasuries (including coupon payments) > RMB > Chinese bonds > US dollar > crude oil.
The macroeconomic environment is expected to feature dual fiscal and monetary easing, with a potential recovery in the manufacturing cycle. On the fiscal front, expansionary policies in Europe and the US are set to bolster economic growth. The potential implementation of Trump's "Big and Beautiful Act" could positively impact 2026 economic growth. Europe, having broken fiscal norms this year, is witnessing a significant shift in fiscal policy. The fiscal deficit ratios for the US, the Eurozone, and Germany in 2026 are projected to rebound noticeably compared to 2025.
Regarding monetary policy, the US is expected to adopt a mildly accommodative stance, while Europe and Japan maintain neutral or slightly hawkish positions. The Federal Reserve is anticipated to implement two more rate cuts in 2026. In a less probable scenario where the Fed loses independence and considers aligning with fiscal and electoral demands, additional rate cuts could occur. The European Central Bank is likely to keep its policy rate unchanged in 2026, whereas the Bank of Japan has retained the possibility of further rate hikes, potentially in the second half of 2026.
The manufacturing sector is poised for a bottom-up recovery, while the AI investment wave may see marginal cooling. Global manufacturing is expected to remain subdued in 2025. However, by 2026, under the combined influence of expansive fiscal policies, the transmission of rate cut cycles stimulating demand, and an easing of geopolitical tensions such as tariffs, manufacturing PMI is anticipated to rebound. The AI investment surge might transition from a period of explosive high growth to a phase of deeper implementation, leading to a marginal cooling in capital expenditure.
For major asset classes in 2025, the ranking is: precious metals (silver outperforming gold) > copper > A-shares ≈ US and European stocks (with tech and growth sectors favored) > Euro > US Treasuries (including coupons) > RMB > Chinese bonds > US dollar > crude oil (as of December 22, 2025). Looking forward to 2026, Tianfeng's ranking for major assets remains: A-shares > US stocks > copper > gold > US Treasuries (including coupon payments) > RMB > Chinese bonds > US dollar > crude oil.
US stocks delivered strong performance in 2025, with the Nasdaq > S&P 500 > Dow Jones. For 2026, US stocks are still expected to end higher, although the upward momentum may not match that of the 2023-2025 period. Earnings growth should provide support, but valuation expansion is likely to be limited, and volatility could increase. The Dow Jones might offer better value.
Regarding US Treasuries, as the Fed implements further rate cuts, the 2-year Treasury yield is expected to decline to around 3.1%–3.2%. However, the 10-year yield may remain volatile, likely staying above 4% for most of 2026. Concerns over US fiscal discipline and monetary policy independence could lead to a further steepening of the Treasury yield curve.
On currencies, the US dollar is forecast to decline initially in 2026, followed by a period of fluctuation. Given the relative strength of the US economy compared to Europe and Japan, the dollar's overall decline is expected to be limited, with a potential low around 95. The RMB is considered highly likely to re-enter the "6-era," exhibiting a pattern of "moderate appreciation, rising first then stabilizing."
Gold benefited in 2025 from central bank allocation, de-dollarization trends, safe-haven demand, and Fed rate cuts, leading to a significant rally. Tianfeng believes gold could continue its volatile ascent in 2026, supported by concerns over US dollar credibility, US deficit and debt issues, potential monetary policy independence crises, and the mid-term elections. However, after a substantial gain of approximately 70% in 2025, the overall increase in 2026 is expected to be weaker than this year's performance.
In commodities, crude oil fell significantly in 2025, while copper prices rose due to supply-side disruptions and long-term demand fundamentals. For 2026, bearish sentiment is expected to continue dominating crude oil, whereas copper prices are likely to remain relatively strong. A recovery in global manufacturing PMI could lead to a general increase in industrial raw material prices. Silver surged nearly 140% this year, and Tianfeng views its fundamental support as still robust, while advising caution regarding potential technical corrections at elevated levels in the short term.
Chinese assets saw A-shares rise in 2025, performing slightly better overall than US stocks, while the yield curve for Chinese government bonds shifted slightly higher. Looking to 2026, under the baseline scenario, the central tendency for the 10-year government bond yield is expected to continue its slight upward drift. Compared to bond assets, equities currently offer more attractive safety margins and potential future returns, which may continue to drive capital flow from the bond market to the stock market, potentially prolonging the pattern of "stronger stocks, weaker bonds."
The report concludes with risk warnings, including potential unexpected US policy shifts, surprises in US economic performance, and unforeseen developments in the global geopolitical situation.
