SPX: positive, despite all

It was a slightly bumpy week for the US equity markets. Investors in US equities were not happy to see that the US jobs data added 303K new jobs in March, while the market was expecting to see 200K. The huge difference impacts markets to reconsider its potential influence on future inflation in the US, and in line to adjust their positions, expecting that Fed will take much longer time, from previously expected, to make the first rate cut during the course of this year. In this sense, Thursday was the day, when S&P 500 for the first time this year dropped by almost 2%, from level of 5.251 down to 5.147. Still, Friday`s trading session was much more optimistic, when the index returned toward the level of 5.204, where it is finishing the week. During Friday trading session, the index managed to gain 1% in value, where all sectors ended the trading session in positive territory, however, only energy and telecommunication sectors ended the week with a gain.

Markets don’t like uncertainties, in which sense, some further volatility in the index could be seen in the week ahead. It should be considered that March inflation rate is set to be released during the week ahead, which might impact some stronger index movements to the up or down side, depending on the outcome of data. If data show that the inflation is still moving within stable fluctuations, then it could be expected that the market will regain optimism. On the opposite side, a further withdrawal of investors from the market might be expected, but not to some significantly higher extent.