JPMorgan Warns of a Shock to Stock Market’s Calm From CPI, Fed
- Bank’s trading desk lays out scenarios for inflation data
- Citi sees rising implied volatilities for CPI, rates decision
This article is for subscribers only.
Wall Street’s most prominent trading desks from JPMorgan Chase & Co. to Citigroup Inc. are urging investors prepare for a stock market jolt this week after the latest inflation print and the Federal Reserve’s interest-rate decision, both of which arrive on Wednesday.
The options market is betting the S&P 500 Index will move 1.3% to 1.4% in either direction by Friday, based on the price of at-the-money straddles that expire that day, according to Andrew Tyler, head of US market Intelligence on JPMorgan Chase’s trading desk. This would come in the wake of the consumer price index report Wednesday and the Federal Reserve’s interest-rate decision that afternoon.