[MARKET ANALYSIS] Global equities rebound despite a lack of US-Iran de-escalation, miners benefit from surging aluminium prices

European bourses (STOXX 600 +0.3%) are entirely in the green, rebounding from losses seen pre-cash open. The FTSE 100 outperforms, helped by gains in miners as aluminium surged following attacks on producing plants in the Middle East. On the other hand, the DAX remains the laggard. Ahead of the nationwide German inflation print, the stateside figures printed hotter than prior due to higher energy prices.
Sectors are mixed. Basic Resources and Utilities top the sector pile, while Travel and Leisure and Banks underperform.
Key movers include Nokia, Boohoo and Atos. For Boohoo, the Co. reported adj. EBITDA that beat its previous guidance and raised its FY27 outlook, projecting a double-digit % growth in adj. EBITDA. Syntel, which was acquired by Atos in 2018, was ordered to pay Cognizant just over EUR 200mln. Despite Atos stating it will not have a material impact on the Group, shares are still under pressure. Finally, for Nokia, the Co. was upgraded to neutral from sell at Goldman Sachs, with analysts stating that the Finnish telecoms company will benefit from the AI infrastructure buildout.
US equity futures are modestly higher, rebounding from 5 straight weeks of losses. In terms of multi-asset allocation, Morgan Stanley downgraded global equities (more specifically, US and Japan) to equal weight from overweight, while upgrading USTs and cash to overweight from equal weight. Despite the downgrade, MS still maintains a preference for US equities given the higher EPS growth.
In terms of broader commentary, JPM said this shock is not the same as 2022, but markets face high volatility but not complacency; recession not fully priced, and early rate hikes risk being a mistake with potential reversal. Meanwhile, Morgan Stanley’s Mike Wilson said the S&P 500 Index correction is late-stage, with ~17% P/E compression, weak breadth, and oil risk largely priced. Key risk remains rising yields (US 10yr ~4.5%), but markets are already less complacent on growth, suggesting limited downside from here.