Inflation could be a market-driving fear again this week when September data is released, according to Bank of America. The financial firm's trading desk said in a note Monday morning that the market-implied move for stocks around Thursday's consumer price index report is now above 1%, compared to a realized move of 0.7% over the prior three months.
"After the blowout jobs report, CPI is no longer a 'non-event.' … Stocks should be able to withstand slight upside surprise in inflation, but a sizeable surprise would bring more volatility," the Bank of America note said. Long-term Treasury yields also rose on Monday , another sign that there might be renewed fears around inflation. The CPI report is due out before the opening bell Thursday. Economists surveyed by Dow Jones expect the CPI report to show a 0.