Equities: Relief rally faces ceasefire uncertainty – Danske Bank

Danske Research Team highlights a sharp global equities rally after the Iran ceasefire headlines, with benchmarks now just about 2% below record highs. Cyclicals and semiconductors led gains, while energy and minimum volatility lagged. However, Asian markets and Western futures are already giving back part of the move as doubts over the ceasefire’s evolution re-emerge.

Cyclical rebound pauses after strong surge

"Global equities rallied sharply yesterday in the wake of the Iran ceasefire headlines, leaving global benchmarks just ~2% below all-time highs and back in positive territory year-to-date."

"Unsurprisingly, the move was characterized by a strong cyclical rotation, while energy stood out as the clear underperformer."

"At the same time, minimum volatility significantly lagged; in fact, min vol is now the worst-performing factor since our latest strategy report in early March, standing in stark contrast to the heavy flow of geopolitical risk over the past month."

"Notably, the rebound dynamics show a clear reversal pattern: the strongest moves were seen in Asia and Europe, and at industry level, semiconductors outperformed energy by ~15% yesterday alone. While US moves were more muted, it is worth noting that yesterday marked the sixth consecutive positive session for the S&P 500. "

"This morning, with uncertainties around how the ceasefire will evolve, Asian equities are giving back some of the gains. European and US futures are also modestly lower."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)