Here’s how the S&P 500 might respond to the CPI print tomorrow

U.S. stocks could regain momentum if consumer prices continue to exhibit signs of easing, says Sylvia Jablonski – the Chief Executive of Defiance ETFs.

Jablonski defends her view on CNBC

The Bureau of Labour Statistics is scheduled to publish its monthly update on inflation tomorrow – February 14^th.

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Expectations are for the CPI to drop further to 6.2% on a year-over-year basis. Explaining how the market might respond to the data, Jablonski said on CNBC’s “Squawk Box”:

If the consumer prices index number is okay, I think investors tend to tune out the Fed, look through and move forward and the rally can keep on keeping on.

Last week, Solus’ Dan Greenhaus also said that the technical indicators were now suggesting that the bear market has come to an end (read more). At writing, S&P 500 is roughly flat for the month.

Buy the dip if there’s one tomorrow

Jablonski agrees that the opposite reaction could play out if the CPI print comes in hotter than expected. Nonetheless, she’s convinced that inflation data no longer holds a lot of importance for the long-term investors.

If the market loses on the consumer prices report tomorrow, she recommends buying the dip as long as you’re looking three to five years out.

Fed will slow down at some point. Inflation is coming down. Average bear market lasts 14 months. We’re on month 15. If you have a 3-to-5-year horizon, these are great opportunities to buy the dip and set up for future growth.

Last week, Fed Chair Jerome Powell also agreed that consumer prices were starting to ease now.