Analysis: With a September Fed rate cut almost certain, options traders expect a steady run in US stocks

PANews reported on September 7th that, according to Jinshi, with a September Federal Reserve rate cut almost certain, options traders are widely betting on a stable stock market ahead of Thursday's CPI data release. However, this bet could be risky if the data shows rising inflation. The market's logic behind the rate cut is simple: US job growth is stagnant and the economy needs stimulus. Friday's weak jobs data further reinforced this expectation, prompting investors to fully price in a 25 basis point rate cut from the Fed next week. The market reaction has been muted: US stocks fell slightly on Friday, and the fear index rose slightly, but remained well below the critical 20 level, where it has mostly remained since June. Looking ahead, options traders are betting on a two-way swing of approximately 0.7% in the S&P 500 following Thursday's CPI release, below the average realized swing of 1% over the past year. However, this trading logic overlooks a key risk: what if inflation data significantly exceeds expectations? "The balance is very delicate right now," said Eric Teal, chief investment officer of Comerica Wealth Management. "Any data that is very positive or very negative could change the market outlook."

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Author: PA一线

This content is for informational purposes only and does not constitute investment advice.

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