JPMorgan’s Trading Desk Sees CPI Bolstering Bear-Market Rally - Bloomberg

Prediction  

Thursday’s widely watched US inflation data are likely to come in cooler than expected, helping stocks extend a bear-market rally, according to JPMorgan Chase & Co.’s sales and trading desk.  

While consensus expects December’s consumer price index to slide to a 6.5% annualized pace, the bank’s team including Andrew Tyler sees an almost two-in-three chance for the data to arrive within 10 basis points of the estimate, with a bias to the soft side. Since investors are largely defensively positioned, they argue, any evidence that the Federal Reserve’s inflation-fighting campaign is working will spark a rush to unwind bearish positions. In that case, they see the S&P 500 rising 1.5% to 2% over the session.