By: Global X CIO Team
Global equities are off to a strong start in 2023, driven by declining U.S. inflation and China’s reopening. In the U.S., the Nasdaq rose 10.7% in January, ahead of the 6.3% rise in the S&P 500 during the same period. Small cap stocks led the U.S. market’s advance, with growth outperforming value. Cyclical sectors such as communication services and consumer discretionary outperformed in January, while defensive sectors such as consumer staples and utilities declined. U.S. inflation dropped again in December to 6.4% year-on-year, down from a 9.0% peak in June 2022. Consumer spending remained positive in Q4 2022, and jobless claims fell, while housing data continued to decline. Treasury yields declined in January, predominantly at the longer end of the curve as market participants anticipated a slower trajectory of rate hikes. The S&P 500 capped its best January in four years, coming off a challenging 2022.
International equities outperformed U.S. equities in January. The dollar continued lower from its peak in late-September. Chinese markets rallied, returning over 11% in January as the nation reopened following COVID-19 lockdowns. The gradual comeback in China could spur economic growth, potentially providing support for the global economy during 2023. In Europe, positive economic surprise data lifted investor sentiment, while wider interest rate differentials benefited the euro versus the dollar. We expect continued improvements outside of the U.S. this year.
Click here to download Global X’s Market Snapshot.
Originally Posted February 2nd, 2022, GlobalX
Investing involves risk, including the possible loss of principal.
Index returns are for illustrative purposes only and do not represent actual fund performance. Indices are unmanaged and do not include the effect of fees, expenses or sales charges. One cannot invest directly in an index. Past performance does not guarantee future results.
This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information is not intended to be individual or personalized investment or tax advice and should not be used for trading purposes. Please consult a financial advisor or tax professional for more information regarding your investment and/or tax situation.
Global X Management Company LLC serves as an advisor to the Global X Funds.