Global markets staged a significant rebound thus far in 2023, led by Greek, U.S., and Japanese equities.

As of June 9th, the Global X FTSE Greece 20 index topped the gainers' list, rising 34.1% YTD. That's thanks to a rebound of the Greek economy and the market reforms pursued by the country's conservative government.

"These reforms have not only boosted investor confidence but also raised expectations of the country regaining its investment status," Ben Waterman, Co-Founder & COO at Strabo, told International Business Times. "As a result, Greece has become an attractive destination for foreign capital, driving the impressive performance of its equities."

And further gains may be ahead, as the conservative party of Kyriakos Mitsotakis is expected to win a solid parliamentary majority in the June 25 runoff elections.

Following closely behind are the PowerShares NASDAQ 100 index (QQQ) and the iShares Russell 2000 fund, which have gained 33.3% and 23.7%, respectively, year-to-date. That's thanks to the resilience of the U.S. economy, especially the tech sector, which has regained investor enthusiasm over the promise of the diffusion of A.I. systems.

"Over the past two weeks, we have seen breakouts from small-cap and mid-cap sectors of the market as well as the average stock in the S&P 500 (SPW Index) from their downtrends that have been in place since February of this year," said Thomas Samuelson, CFA, CMT, Chief Investment Officer at Vineyard Global Advisors.

Japan's market follows suit, with iShares currency hedged MSCI Japan gaining 25%. "This performance indicates a strengthening market and highlights the potential for investment opportunities in Japan," said Waterman.

The world's third-largest economy has been trying to shake off three decades of stagnation following the burst of multi-asset bubbles in the early 1990s. For the first quarter, it grew at an annual rate of 2.7%, ahead of the market consensus estimate of 1.9%. That's due to a revival in consumers following the end of pandemic measures supported and a rebound in business spending.

"At the heart of the resilience of Japan's economy and financial markets are its unique blend of factors," said Taylor Kovar, CEO at TheMoneyCouple.com and KovarWealth.com. "These include a highly skilled labor force, an unyielding commitment to innovation and technology, and a strong corporate governance culture. Also, Japan's emphasis on long-term stability over short-term gains often ensures consistent and sustained growth."

Still, the rebound in global equities, especially in the U.S., is narrow, led by a few tech giants, which worries some market analysts.

"Technology stocks can be a 'risk-on' indicator for the broader market, but if they are the only game in town and leadership becomes increasingly narrow with no other sectors and styles participating, it can be a sign of a market top," said Samuelson. "Over the past two weeks, we have seen breakouts from small-cap and mid-cap sectors of the market as well as the average stock in the S&P 500 (SPW Index) from their downtrends that have been in place since February of this year."

Waterman is skeptical about the technical indicators of the recent rally in equities, too.

"The overall mid-year market update paints an encouraging picture for global markets, showcasing the recovery and growth across various regions," he said. "However, it is important to approach these developments with a cautious mindset. Markets can be volatile, and investors should carefully evaluate their investment strategies based on their risk tolerance and long-term objectives. It is advisable to seek professional financial advice and conduct thorough research before making investment decisions."

Samuelson believes the U.S. market is currently overbought and could decline 2-4% after the Fed delivers its "hawkish pause" message on Wednesday. "If the pullback is modest and we see continued follow-through, the bull market likely has legs," he added.

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