JPMorgan warns of 20% stock drop if bond market view considered.

JPMorgan strategists warn that if equity markets were to price in a rise in inflation volatility to levels that the bond markets do, it would imply a 20% downside from current levels, as equity markets look "priced for perfection" while bond markets are still pricing in a sustained period of elevated macroeconomic uncertainty. The strategists don't say what it would take for the equity market to be as worried as the bond markets, but a rise in inflation data next week could shake markets. Bank of America strategists also point to a quiet credit crunch as small business credit availability declines and initial jobless claims rise, interrupting the "no recession" narrative.