Hot Inflation Print is set to record on S&P 500 runs
(Bloomberg) – US stock rallies are already on shaky ground due to uncertain outlook on tariffs and artificial intelligence. Adding a hot inflation print to the mix will sell the market.
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This is JPMorgan Chase & Co. According to Market Intelligence’s Trading Desk, the S&P 500 estimates that if the S&P 500 rises more than 0.4% in January from before January, the S&P 500 will fall by 2%.
“The bond market is hoping to react vigorously to change the unrestricted Fed funds and the most likely behaviour of the Fed, where the Fed’s most likely next behaviour is hiking rather than a cut. Please,” the team led by Andrew Tyler wrote in a memo. “The bond yield movement will drag USD higher and put more pressure on it.”
Many people are riding the numbers until 8:30am in New York. The market was overreacting to consumer sentiment and inflation expectations data from the University of Michigan on Friday, Tyler said. “It’s emphasized in the CPI print,” they added.
Strategists are tactically bullish against US stocks, hoping for a neutral Federal Reserve system with the above mentioned economic growth, positive revenues and a neutral Federal Reserve slope. A slightly hot print would refute that outlook, they said, but the most likely result is that monthly inflation numbers come between 0.27%-0.33%.
The consensus estimate is a 0.3% increase in monthly CPI, with options implying a move of the S&P 500 index just below 1%. Last month, data sparked a major upward movement in the stock market, but a slight deviation from forecast could again cause volatility.
After a powerful two-year rally on the S&P 500, investors now have the potential to see Donald Trump’s tariffs high inflation, sustainedly rising interest rates, and increasingly questionable, high-pitched technology ratings We are tackling the threats that we are robbing. Federal Reserve Chairman Jerome Powell said the central bank wouldn’t have to hurry to adjust interest rates on Tuesday, bringing bond yields higher. Currently, Swap Markets is cutting prices this year with another fee cut.
Dominic Wilson of Goldman Sachs Group Inc. said their forecasts for inflation printing are slightly above the consensus.
“If we print out the consensus, there may be some mild relief,” senior market advisor Wilson wrote in a note. “We believe that the underlying crime of fundamental inflationary pressures is likely to prove benign than the market expects, but tariffs offset it in the short term. It is likely that it will be, and we have recently raised our inflation forecasts. The market has already priced some of that risk.