With Wall Street investors on the defensive, upbeat consumer price index numbers on Tuesday could spark a sharp rally in U.S. markets, with the S&P 500 up as much as 10%, predicts JPMorgan Chase & Co..
In a scenario analysis tracking Wall Street’s reaction, the JPMorgan team led by market chief Andrew Tyler believes inflation of 6.9% or lower could potentially send Wall Street up 8 to 10 %. Such a rally would indicate that Wall Street is up as much as 20% from the October index low, as well as marking the end of a 12-month “bear market”.
Here’s what the scenario analysis looks like for JPMorgan:
| Inflation November | Chance | S&P 500 reaction |
| 7.8% or higher | 5% | Ned 4.5-5% |
| 7.5-7.7% | 25% | Ned 2.5-3.5% |
| 7.2-7.4% | 50% | Opp 2-3% |
| 7.0-7.2% | 15% | Opps 4-5% |
| 6.9% or less | 5% | Against 8-10% |
