Inflation Data Will Shatter the Stock Market Calm, Goldman Partner Warns
- Veteran trader says data at or below consensus to spur rally
- If inflation tops 6%, expect a drop of at least 2% in S&P 500
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This week’s lull in the US stock market is likely to end with Wednesday’s consumer price index report, and Goldman Sachs Group Inc. partner John Flood has offered a set of guidelines for what investors may soon face.
Expect the S&P 500 to drop at least 2% should the year-over-year inflation rate come in above the previous reading of 6%, Flood wrote in a note Tuesday. But stocks are likely to go higher, he says, if CPI meets or trails 5.1%, which happens to be the consensus estimate from economists in a Bloomberg survey.