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Analysis: U.S. stocks may not be ready for hawkish Powell at Jackson Hole, options data show

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Investors may be underestimating the degree of potential market turbulence stemming from the Federal Reserve's economic symposium at Jackson Hole, Wyoming, potentially leaving them more vulnerable to a hawkish surprise, options strategists said.

With many investors sitting on big year-to-date gains in stocks and bond yields pushing higher, investors may be caught flat-footed if a hawkish Powell spurs a run out of risky assets, Steve Sosnick, chief strategist at Interactive Brokers, said

Barring the market drop last year and a 2019 tumble, Fed chairs' Jackson Hole speeches have not been big market movers in recent years, with the S&P 500 logging an average swing of 0.9% on the day of the address over the last decade. This year's symposium also comes at a time when various asset classes have become more vulnerable to outsized moves following the Jackson Hole event, according to an analysis by derivatives strategists at Barclays.

 

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