As traders brace for another round of key economic data, equity markets pulled back again on Thursday. The round begins today with the release of the NFP report, which is expected to show steady and stable job gains, if not robust, job increases. This news will be compounded by several reports next week, including the CPI, which is expected to be hot. The takeaway for investors is the news should confirm the need for another aggressive FOMC interest rate hike which will not be good news for the market. If the index can not get above the current levels by the end of next week, the odds are high for another big drop in stock market prices.

Next week also brings the onset of peak reporting season for the Q3 period. The bulk of reports are expected to be tepid and could also include margin compression and weak guidance. The takeaway here is that estimates have been falling for the last two months, so the average S&P 500 company should be able to beat the consensus easily. The question is by how much and if it will be enough to get the market back into rally mode. With inflation and interest rates still on the rise, however, a major rally does not appear to be in the cards.