It was an overall good week for the market as US inflation in March was lower than expected. Further developments in AI technology could change its course forever.
The second week of April comes to an end as the markets on Friday show a slight fall back after 5 days of good news. One major data point acted as market movers this week, though fears of recession have not gone away.
Some numbers to summarize the week:
- Both the Dow Jones and the NASDAQ are on the rise, with +1.12% and +0.76% respectively;
- The S&P 500 also saw growth with a +0.92% rise this week;
- In Europe the major stock exchanges also ended in the green. London closed on Friday with a +2.73% weekly, Frankfurt with +1.79% and Milan with +2.73%.
Optimistic inflation data
The most important market mover this week has surely been the inflation data coming from the United States.
In March, American consumer prices fell to 5% year on year, down over 1% from February. This fall has been steeper than expected and obviously gave confidence to the Federal Reserve on its strategy.
In March, the Fed raised interest rates once again, despite widespread fears of a banking system failure. Federal Reserve Chairman Jerome Powell assured investors that “banks are safe” and Silicon Valley Bank and Signature Bank were just a couple of bad apples.
In Europe, the shockwave of their collapse shook two major institutions: Credit Suisse and Deutsche Bank. After a heavy and quick government repair, however, both banks stood on their feet and nobody got hurt.
It remains to be seen whether or not the Fed will raise interest rates again, though market analysts believe it very likely.
JPMorgan CEO Jamie Dimon reiterated that “A recession is inevitable”.
Amazon announces Bedrock
On Thursday, Amazon announced its participation in the current artificial intelligence race. Bedrock, the AI software announced by Amazon, will serve as an “operating system” for businesses who wish to research AI.
Bedrock will offer businesses similar functionalities to OpenAI’s top softwares DALL-E and ChatGPT. Contrary to them, however, Bedrock will be just a basis for software creation.
It’s the first real move towards a “democratization” of artificial intelligence, and has the potential of revolutionizing the market.
After its announcement, Amazon stocks went up by over 1%, rebounding back on Friday. Markets appear still uncertain on the impact of artificial intelligence, though there is optimism in the air.
Amazon CEO Andy Jassy said that he doesn’t really focus on the company’s stock prices. “In any one period of time it may be further up or further down, but it really matters what you do for customers over a long period of time,” Jassy said.
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