Storebrand AM: Global equities hit record highs – takes profit while maintaining overweight

Oslo, 6 May 2026 – Despite the continued disruption in the Strait of Hormuz and persistently elevated oil prices, global equity markets reached new all-time highs in April. Storebrand Asset Management has taken profit following a strong month, while maintaining an overall overweight position in equities.

This is the conclusion from the May edition of the monthly allocation report from Storebrand AM’s Tactical Allocation Team, led by Olav Chen, Head of Allocation and Global Fixed Income.

Geopolitical tensions keep oil prices elevated
Two months after the attack on Iran, the Strait of Hormuz remains, in practice, largely closed despite a ceasefire agreed early in April. Subsequent negotiations between the parties have yet to produce a meaningful breakthrough, and the United States has implemented a blockade in the region in order to put economic pressure on Iran.

Brent crude traded between USD 90 and USD 120 per barrel during April, ending the month at the upper end of the range. Reports of rationing and declining inventories of jet fuel, gas and other goods are increasing in parts of the global economy. Growth expectations have already declined, and inflation expectations have moved higher as a result of the disruption.

“If the Strait of Hormuz remains closed for an extended period, the consequences for the global economy could become significantly more severe, with weaker growth and higher inflation. Recession risk has already risen, and is likely to rise further if shipping does not resume during May,” says Olav Chen, Head of Allocation and Global Fixed Income at Storebrand AM.

Xi–Trump summit a potential turning point in mid-May
Negotiations between Iran and the United States are ongoing and the ceasefire remains in place, although the parties remain far apart. A scheduled summit between Xi Jinping and Donald Trump in China on 14–15 May could become an important development, including in relation to the Iran conflict, provided the meeting is not postponed further.

China, as a major net importer of oil, has limited appetite for a prolonged disruption to global trade. Even with sizeable strategic reserves of coal and oil that could last three to six months, a protracted conflict would weigh heavily on the Chinese economy. Trade and tariff discussions between China and the United States are also expected to be on the agenda.

Global equities reach new all-time highs
Global equity markets reached new all-time highs in April following a strong rally, led primarily by the United States. The MSCI World rose 9 per cent in local currency, while the S&P 500 advanced more than 10 per cent – its fourth-best monthly performance since the turn of the millennium.

The earnings season, particularly in the US, has been solid, and technology and AI-related equities staged a notable comeback during the month. There are early signs that the substantial investments in AI are beginning to deliver returns, although the full impact of higher energy prices on future capital spending is unlikely to be visible before next quarter.

Profit-taking while maintaining overweight
Storebrand AM has taken profit and reduced exposure modestly across global equities, Swedish equities and emerging market equities, while remaining overweight equities overall. The position in Swedish equities has been moved from overweight to neutral, with the all-time-high levels in OMXS30G used to realise gains.

“Equity markets have had a strong run, and we have used the opportunity to take profit while keeping our overall overweight in equities. Companies are still delivering solid earnings, particularly in the US, but valuations and the geopolitical backdrop warrant a more measured stance,” says Chen.

In emerging markets, gains were taken following exceptional year-to-date performance in Asia: the South Korean and Taiwanese equity markets are up more than 70 and 40 per cent respectively in local currency since the start of the year, supported by renewed optimism around AI and related supply chains. The team remains overweight emerging markets overall.

Rates and credit
Global government bonds were broadly unchanged in April. Yields have continued to track oil prices and inflation expectations, with markets now pricing an ECB rate hike in June and up to three additional hikes by year-end. Norges Bank is also expected to raise rates again in May or June, although a trade-weighted strengthening of the Norwegian krone of close to 8 per cent year-to-date may dampen domestic inflation pressures and limit the number of hikes.

Storebrand AM remains neutral in duration across all markets and maintains an overweight position in credit and corporate bonds. Credit spreads tightened during the month in line with improved risk appetite, despite elevated oil prices and increased recession risk.

Asset allocation overview Storebrand AM – May 2026

• Global equities: Overweight (unchanged)
• Norwegian equities: Neutral (unchanged)
• Swedish equities: Neutral (from Overweight)
• Emerging market equities: Overweight (unchanged)
• Global government bonds: Neutral duration (unchanged)
• Norwegian government bonds: Neutral duration (unchanged)
• Swedish government bonds: Neutral duration (unchanged)
• Credit and corporate bonds: Overweight (unchanged)
• Money market: Underweight (unchanged)

For additional comments or interview requests, please contact Andreas Buoen: +47 94032599 | andreas.buoen@storebrand.no