US Inflation: JP Morgan, Goldman Sachs both expect S&P 500 gains on likely softer CPI

As global markets keenly await the US Consumer Price Index (CPI) data for November, analysts from Goldman Sachs (GS) and JP Morgan (JPM) came out with their expectations on how the headline inflation numbers could affect the benchmark US equity index S&P500.

JP Morgan appears more bullish on the S&P 500 as it expects the equity benchmark to rise by 2% to 3% in case the CPI YoY matches market forecasts ranging between 7.2% to 7.4%. That said, the US bank anticipates a rally between 8.0% and 10.0% in case the inflation figure arrives as 6.9% or lower.

“Index is likely to sink as much as 5% should inflation exceed 7.8%,” mentioned JP Morgan.

Goldman Sachs appears a bit reserved in its forecasts and anticipates S&P 500 gains of above 3% if the US CPI comes in under 7%.

“A reading 7 to 7.3% would see 2 to 3% added to the S&P500,” adds GS while also stating that (the US CPI) from 7.4% to 7.7% sees the S&P 500 drop 1 to 2%. The US bank also stated that the inflation readings above 7.7% could see S&P 500 losses of more than 3%.

Also read: Forex Today: US inflation and central banks coming up next