JPMorgan and Citadel Securities both issued short-term warnings, urging investors to stay cautious into a heavy stretch of macro data and the Federal Reserve's September policy meeting. The two firms recommend using options prices, which sit near their lowest levels this year, to hedge downside risk ahead of the event risk.
The warning comes after Fed Chair Warsh delivered a closely watched speech on Aug. 28, saying U.S. inflation has not slowed materially. JPMorgan's U.S. market intelligence chief Andrew Tyler and his trading team dropped their bullish stance on equities before the Fed's Sept. 16 decision. While they still expect economic data and corporate earnings to provide support, they cut their view on U.S. stocks to tactically cautious.
At Citadel Securities, head of equity and equity derivatives strategy Scott Rubner noted that retail investors' buying activity in September has been the weakest of the year since 2019, based on his tracking. On days when the S&P 500 falls, average net retail buying is roughly half the normal level, he said. The views were reported by Bloomberg.
JPMorgan and Citadel Securities both issued short-term warnings, urging investors to stay cautious into a heavy stretch of macro data and the Federal Reserve's September policy meeting. The two firms recommend using options prices, which sit near their lowest levels this year, to build downside protection ahead of the event risk.
Fed Chair Warsh delivered a closely watched speech on Aug. 28, saying U.S. inflation has not slowed materially. After that, the trading team led by JPMorgan's U.S. market intelligence chief Andrew Tyler decided to drop its bullish stance on equities ahead of the Fed's Sept. 16 decision. While the team still expects economic data and corporate earnings to provide support, it cut its view on U.S. stocks to “tactically cautious.”
At Citadel Securities, Scott Rubner, head of equity and equity derivatives strategy, pointed to a seasonal pattern in retail flows. Since 2019, retail investors' buying activity in September has been the weakest of the year in his tracking. On days when the S&P 500 falls, average net retail buying is roughly half the normal level, he said.
Bloomberg reported the warnings.
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