An ICYMI, this via a note from JPM's trading desk on their outlook for the S&P 500 if the Federal Open Market Committee (FOMC) raises the Fed Funds rate by 50bp instead of the +75 that is widely expected.
- Say the S&P500 could jump by 10% in a single day!
- JPM add that this is their least likely outcome
JPM scenarios, in brief:
- 50 basis point hike, with a dovish press conference: S&P 500 up 10% to 12%
50 basis point hike and a hawkish press conference: S&P 500 up 4% to 5%
75 basis point hike and a dovish press conference: S&P 500 up 2.5% to 3%
75 basis point hike and a hawkish press conference: "This is the most likely outcome" ... S&P 500 down 1% to up 0.5%
100 basis point hike and a dovish press conference: "seen as unlikely as a 50 basis point hike" ... S&P 500 down 4% to 5%
100 basis point hike and a hawkish press conference: S&P falls 6% to 8%, likely resting year-to-date lows
federal reserve chair Powell
