(Bloomberg) — A gauge of global equities faltered after its best start to a year in a generation as investors assessed whether the rally has gone too far given the outlook for inflation, growth and earnings.
The dollar snapped a three-day losing streak.
While inflation in the US appears to have peaked, aggressive policy tightening by the Federal Reserve and other central banks risks pushing the global economy into a recession that could hurt corporate profits.
The World Bank last week added to the gloomy outlook, warning of “one of the sharpest slowdowns we have seen in the past five decades.”
“It’s been quite a frantic start to the year so investors may be capitalizing on the opportunity to catch their breath,” Craig Erlam, a senior market analyst at Oanda Europe Ltd., wrote in a note.
“The question now is whether earnings season will enhance that new sense of hope or spoil the party before it really gets going. ...
...A bad earnings season could undermine hopes of a soft landing that looks more possible now than it has for many months.”
World Economic Forum’s kicks off in Davos, Monday. China retail sales, industrial production, GDP, Tuesday. US Empire State manufacturing survey, Tuesday. Federal Reserve releases Beige Book, Wednesday.
Fed speakers include Raphael Bostic, Lorie Logan and Patrick Harker, Wednesday. US housing starts, initial jobless claims, Philadelphia Fed index, Thursday. The Stoxx Europe 600 rose 0.4% as of 2:22 p.m. London time.
Futures on the Dow Jones Industrial Average were little changed. The offshore yuan fell 0.4% to 6.7430 per dollar.
Bitcoin fell 0.3% to $20,835.06if(typeof ez_ad_units!='undefined'){ez_ad_units.push([[336,280],'mobilenewspepar_com-leader-4','ezslot_9',145,'0','0'])};__ez_fad_position('div-gpt-ad-mobilenewspepar_com-leader-4-0');.
The yield on 10-year Treasuries was little changed at 3.50%.