1. The relief rally is there…now what?

While the decline in oil prices on Wednesday after the two-week cease-fire agreement is significant, it still implies a large incoming inflation shock, Pantheon Macroeconomics' Claus Vistesen says in a note.
“Whatever happens, we’re heading toward slower global growth and higher inflation this year.”
"The deal removes the prospect of an April rate hike--which was always a long shot in our view--but we maintain our view that the European Central Bank will tighten slightly over the summer, for now," he says.
Investor sentiment is likely to remain sensitive to news flow, so keeping a focus on quality assets across equities and bonds is a pragmatic approach.

Below: Analysts have already been souring on the outlook for profits and the war added more reasons to be cautious, with earnings downgrades outpacing upgrades since December in the region.

2. The war reinforces the need for Europe to rebuild its strategic autonomy.

Regardless of the reopening of the Strait of Hormuz, spending on energy security, defense and renewables will likely remain robust. While a short-term correction in defence may follow the ceasefire news, we maintain constructive views on these secular themes. Economic security considerations on energy and defense are poised to move to the forefront of policy discussions and should receive increased budget allocations. This will likely include a greater focus on domestic energy systems and grid resilience, as well as infrastructure investment aimed at boosting storage capacity, diversifying energy sources.

Below: Europe Defense sector is trading at the bottom of its 20-25x P/E range.

3. MAG7 are relatively cheap.

The Mag 7 trades at approximately the same multiple (24x) as Staples (22x) but it has over 3x the forward earnings growth.

Below: Valuation has fallen near “Liberation Day” lows.

4. For the first time since 2013, NVIDIA is trading at a discount to the S&P 500 average.

The company providing the picks and shovels for the AI revolution is being valued more conservatively than the average American corporation.
Look closely at the chart: Apple now trades at a 30x multiple, while NVIDIA sits at 21x.
Apple—a company that just turned 50 and is currently grappling with stagnant iPhone cycles and a delayed AI strategy—is being rewarded with a certainty premium because it is a proven cash machine.

5. TACO trades are consistently profitable.

Over the 300-plus trading sessions since Trump took the oath of office last year, nine of the S&P 500’s 10 biggest gains have had to do with relief over Trump’s threats.
Owning stocks on just those days would have earned an investor 52% on their money compared with 12% for buying and holding an index fund throughout.

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