JPMorgan Says S&P 500 Can Soar Over 10% Today – Will Bitcoin Follow?

1 year ago

Today and time are astir apt the astir important days of the twelvemonth for the Bitcoin and crypto market. Today’s merchandise of the Consumer Price Index (CPI) volition perchance beryllium the key for the coming weeks and months.

At 8:30 ET, the CPI for November volition beryllium released. Tomorrow, Wednesday astatine 2:00 PM ET, the Federal Open Market Committee (FOMC) volition denote its involvement complaint determination for December.

Following that, Federal Reserve Chairman Jerome Powell volition code the property astatine 2:30 p.m. and supply the rationale for the determination and the updated forecast for ostentation and involvement rates (dot plot).

If CPI comes successful amended than expected today, determination volition apt beryllium a rally for hazard assets similar Bitcoin. If the CPI falls abbreviated of expectations oregon adjacent rises, it could mean a rude awakening for BTC investors – astatine slightest this seems to beryllium the marketplace consensus.

Expectations for today’s CPI are 0.4% little than the erstwhile month, erstwhile it came successful astatine 7.7%. As a result, the projected CPI is astatine 7.3%.

JPMorgan Draws Possible Scenarios

Meanwhile, banking elephantine JPMorgan published an investigation that CPI ostentation beneath 6.9% could trigger a monolithic rally successful accepted trading markets.

Given Bitcoin’s correlation with USD markets and the S&P 500 successful particular, this could apt person a beneficial interaction connected the BCT price. In total, JPMorgan has mentioned six imaginable scenarios.

The astir apt and expected result with a 50% accidental is simply a Y/Y CPI betwixt 7.2% and 7.4%. This would pb to a humble rally successful the accepted markets, according to JPMorgan, and would apt person a affirmative interaction connected the Bitcoin and crypto markets.

However, arsenic the marketplace heavy hinges connected expectations, it remains to beryllium seen whether the bulk of marketplace participants person not already priced this in.

As the 2nd astir apt script with a probability of 25%, JPMorgan considers a CPI betwixt 7.5% and 7.7%, which would mean lone a flimsy driblet oregon stagnation of inflation.

According to the banking giant, this would origin the S&P 500 to plummet massively, by 2.5% to 3.5%.

The Bullish Scenarios For Bitcoin

Furthermore, JPMorgan assigns a 15% probability to the bullish script of CPI landing astatine 7.0% to 7.2%, which could mean a 4% to 5% rally for the S&P 500.

JP MORGAN HAS SHARED 6 POSSIBLE SCENARIOS HERE ARE ALL OF THEM.

THE MOST LIKELY AND EXPECTED OUTCOME IS Y/Y CPI COMING IN BETWEEN 7.2% AND 7.4% pic.twitter.com/speetTM55h

— GURGAVIN (@gurgavin) December 12, 2022

The banking elephantine gives the astir bullish scenario, a CPI of 6.9% oregon below, lone a 5% chance. But past the S&P 500 could spot a legendary rally of 8% to 10%. As Bitcoin is the higher beta, this could mean double-digit gains for Bitcoin.