---
title: "European stocks rise as US futures signal caution: markets wrap"
description: "A gauge of global equities faltered after its best start to a year in a generation as investors assessed whether the rally had gone too far given the outlook for inflation, growth and earnings. European stocks rose."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "International Finance"
author: "Bloomberg"
author_url: "https://www.dailymaverick.co.za/author/bloomberg/"
canonical_url: "https://www.dailymaverick.co.za/article/2023-01-16-european-stocks-rise-as-us-futures-signal-caution-markets-wrap/"
published: "2023-01-16T17:26:11"
lang: "en-ZA"
word_count: 403
---

# European stocks rise as US futures signal caution: markets wrap

> A gauge of global equities faltered after its best start to a year in a generation as investors assessed whether the rally had gone too far given the outlook for inflation, growth and earnings. European stocks rose.

By Bloomberg · Published 16 January 2023, 19:26 SAST

## Content

The MSCI ACWI Index slipped for the first time in seven days after posting the biggest advance for the first two weeks in data going back to 1988. Futures on the S&P 500 and Nasdaq 100 indexes fell at least 0.1% each. The dollar snapped a three-day losing streak. US spot markets were closed for a holiday. Bond yields across Europe climbed.

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](https://www.bloomberg.com/news/articles/2023-01-10/world-bank-cuts-2023-forecasts-and-warns-of-global-recession) 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 capitalising on the opportunity to catch their breath,” Craig Erlam, a senior market analyst at Oanda Europe, 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.”

Earnings will be a key catalyst this week as traders assess whether companies were able to navigate headwinds including higher interest rates. The busy period will also be punctuated by corporate earnings, including Wall Street heavyweights Goldman Sachs Group and Morgan Stanley.

Several Fed officials will be speaking this week, providing more clues on their policy priorities. The World Economic Forum’s annual meeting kicks off in Davos, Switzerland, with speakers there including European Central Bank President Christine Lagarde and the International Monetary Fund’s Kristalina Georgieva.

Meanwhile, Japanese markets continued to be driven by speculation of a shift in monetary policy, with the Topix index trading lower as the yen’s rebound weighed on exporters.

Investors are [on guard](https://www.bloomberg.com/news/articles/2023-01-15/traders-eye-chance-of-more-boj-tweaks-with-pandora-s-box-open) for another surprise from the Bank of Japan when it sets policy on Wednesday. The yen strengthened to levels last seen in May and Japan’s benchmark 10-year bond yield pushed above the top of the BOJ’s ceiling for a second day.

Bitcoin slipped below $21,000 following a rebound over the weekend, when it surged amid optimism that it may have bottomed.

Elsewhere in markets, iron ore tumbled after China [pledged](https://www.bloomberg.com/news/articles/2023-01-15/china-pledges-crackdown-aimed-at-cooling-surging-iron-ore-prices) to tighten supervision on pricing after the metal’s surge in recent months. [Oil](https://www.bloomberg.com/news/articles/2023-01-15/oil-steadies-as-investors-assess-the-impact-of-china-s-reopening) and gold fell. **BM/DM**