Danske Research Team reports that equities advanced last week, with a notable divergence emerging between regions and sectors. Strong earnings and higher Oil prices boosted technology and energy, benefitting US markets, while Europe lagged. The S&P 500, Nasdaq and Nikkei 225 hit new highs, and Asian markets, especially South Korea and Taiwan, continue to outperform on powerful technology momentum.

US and Asian tech outperform Europe

"Equity markets rose on Friday and over the course of last week, but we are now moving into a much more divergent market environment than the one we have seen over the past several weeks."

"Until recently, markets have largely traded in a broad risk-on or risk-off fashion, depending on developments around the war in Iran. Last week was different."

"We saw both a strong earnings impulse, with technology performing particularly well, and at the same time an energy sector that outperformed on the back of higher oil prices."

"This is also consistent with the recent macro data, which increasingly suggest that Europe is suffering materially more from the war in Iran than the US."

"When technology and energy lead, the US benefits the most. Europe, in contrast, continued to lag and traded roughly sideways. "

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