Global Equities gave up some of their gains following a strong start to the year. Positive macro surprises, including better than expected job growth, resilient consumer spending, and higher than expected inflation figures put upward pressure on bond yields. The S&P 500 decreased by 2.6% while the Nasdaq slipped 1.1%. The Federal Reserve is still struggling with two key areas of their mandate that are not going in their favor. The Fed’s preferred inflation measure, Core PCE inflation, rose by 5.2% year-over-year, well above the target of above their 2%. Additionally, the labor market continues to show signs of strength as the latest employment report showed an increase of +467,000 jobs in January, also well above consensus.

Value underperformed growth, with both cyclical and defensive sectors experienced declines in February. Information technology was the only sector to demonstrate some positive performance, whereas most sectors underwent a decline.

In International Equities, European markets have outperformed both the U.S. and Asia Pacific Regions for the month. The decline in energy prices has continued to have a positive impact on households and firms, with consumer confidence rebounding and some energy-intensive manufacturing sectors resuming production. The ECB increased interest rates by 50 basis points to 2.5%, with plans to further raise rates to keep inflation at the targeted 2%. Chinese equities saw a decline as a result of escalating geopolitical tensions contributing to risk-off sentiment. This followed a post-reopening rally fueled by expectations for a rapid increase in consumption fueled by excess savings accumulated during the lockdown.

Click here to download Global X’s Market Snapshot.

Category: Articles

Topics: Macroeconomic

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.