Wells Fargo has advised clients to hedge rather than sell, as its internal sell trigger indicator has reached its highest level in eight years. The bank projects headline CPI at 3.0% for July, up from 2.8% in June, with the indicator itself at its highest absolute level since 2018. This reading could force a recalibration of rate-cut expectations in a market accustomed to a cooperative disinflation narrative. Wells Fargo is not calling for a crash but views the risk-reward of full equity exposure ahead of this data release as asymmetric. The bank recommends hedging strategies such as protective puts, rotation into defensive sectors, or increased cash allocations, all within a week already packed with major bank earnings and economic data points.
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