Danske Research Team observes that equities rose again, led by Tech, with many indices hitting new all-time highs. They attribute the move mainly to positive macro news and stronger US labour data, which eased concerns about the US economy. The analysts argue that the combination of strong macro data and robust earnings remains a major challenge for equity bears.

Tech-led gains on robust macro backdrop

"Equities rose (again) yesterday, (again) led by Tech and with a large number of new all-time highs across indices."

"Whereas Monday's rally was somewhat disturbed by Iran-related headlines, yesterday's move was primarily macro-driven, and the macro news was broadly positive. That triggered a sizeable cyclical rotation."

"The key point was that US JOLT data moved back in line with the other strong labour-market indicators we have seen over recent months, thereby removing one of the main concerns around the US economy."

"If anything, the US labour market has strengthened since the escalation in the Middle East, not weakened. In other words, the geopolitical situation has so far had very limited impact on US labour-market momentum. The combination of strong macro data and very robust earnings is a major challenge for the bears. "

"Their best hope remains a further deterioration around Iran and the Strait of Hormuz. This morning, Asian equities are higher, with Japan leading the move and up close to 3%. US and European futures are broadly flat."

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