JPMorgan and Citadel Securities Warn: Stay Cautious Ahead of Nonfarm Payrolls, Hedge Downside Risk in Advance

Odaily News: JPMorgan and Citadel Securities have both issued short-term warnings, advising investors to remain cautious ahead of the upcoming dense macro data releases and the Federal Reserve policy meeting, and to use the currently low option prices to strengthen downside hedging.

After Fed Chair Warsh signaled clearly in his highly anticipated speech on Aug. 28 that U.S. inflation has not shown substantial easing, the trading team led by Andrew Tyler, JPMorgan's head of U.S. market intelligence, decided to abandon its bullish stance ahead of the Fed's policy decision on Sept. 16. Although they expect economic data and corporate earnings to continue providing support, they have downgraded their view on U.S. stocks to tactically cautious.

Scott Rubner, head of equities and equity derivatives strategy at Citadel Securities, noted that retail investor 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 only about half of normal levels. (Bloomberg)