As someone who made a 30% gain on ORCL puts today, I agree. Timing the market is tricky, but profitable. My guess is that after rate cuts next week, market plummets if it's not a 50 bp. If it is a 50bp, market plummets anyway within a month or two if unemployment gets worse.
What scenario makes market red tomorrow? I can’t think of any. Bad inflation data = 25bp cut. Good inflation data = 50 bp cut given job revision. Oracle is up 30 percent. Dragging up all semis. Money pumping into market at record levels. Just seems like the easiest trade ever.
JPMorgan expects a 25 bp Fed rate cut in September, even with CPI uncertainty. August CPI is projected at 2.9% YoY, with core CPI steady at 3.1% YoY. A hotter print could delay cuts to October or December.
The bank warns of market reactions: core CPI >0.40% could drop the S&P 500 1.5%-2%, 0.35%-0.40% may trigger 0.5%-1% losses, and <0.25% could lift gains 1.25%-1.75%. JPMorgan remains tactically bullish but flags risks from inflation, jobs, and trade.
They will definitely cut 25bps - The true problem they face is slowing jobs and raging inflation - won't matter if there is full employment and prices double- If high PPI and CPI they will cut 25 bp and wait-
Also, BLS data quality might disintegrate over time really boxing Powell in