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☆ There are 4 big factors to watch that could bring turmoil to financial markets, research firm says
▼ + stars: | 2024-05-03 | by ( Yuheng Zhan | ) www.businessinsider.com time to read: +3 min

Stocks and the economy look strong but there are four factors that could pose a problem, Capital Economics said. Geopolitical risks in the Middle East and high interest rates are big risks to markets. A depreciation of the Chinese yuan and soaring US debt are also the two factors investors need to watch. NEW LOOK Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Thirdly, with the rising value of the Chinese yuan, any depreciation could trigger currency market volatility elsewhere.

Persons: —, Ruben Gargallo Abargues, Jonas Goltermann, Wednesday's, Goltermann, Bill Gross Organizations: Economics, Service, Capital Economics, Brent Locations: Israel, Treasuries

☆ A lower-risk and cheaper way to bet on a second-quarter comeback in this emerging markets ETF
▼ + stars: | 2024-04-01 | by ( Michael Khouw | ) www.cnbc.com time to read: +4 min

The MSCI All Country World Index ETF (ACWI) hit an all-time high last week. ACWI 5Y mountain iShares MSCI ACWI ETF (ACWI) This index would appear to give investors diversified exposure to stock markets around the globe. It includes developing countries, unlike the MSCI World Index, which is tracked by the ETF 'URTH.' Consequently, the US stock market comprises almost 71% of the URTH ETF and nearly 64% of the ACWI ETF. This is illustrated by the MSCI Emerging Markets Index which can be traded with the iShares ETF, 'EEM.'

Persons: —, ACWI, Rob Reiner, Miracle Max, Billy Crystal, EEM Organizations: Trust Locations: URTH, U.S

☆ A bullish options bet on a rallying fintech into earnings
▼ + stars: | 2024-02-05 | by ( Michael Khouw | ) www.cnbc.com time to read: +5 min

Nevertheless, we're going to take advantage of lower- than-average longer-dated options premiums in an e-commerce payment services company to frame a modestly bullish bet going into earnings. Companies might beat earnings expectations but still see their stock price fall due to other factors like future earnings guidance, revenue quality, or broader market conditions. Guidance: Companies often provide forward-looking statements or guidance about future earnings and performance during their earnings calls, which can have an immediate and unpredictable impact on their stock price. Analyst expectations: The market's reaction can be more about how the actual earnings compare to analyst expectations rather than the earnings themselves. In some cases though, the options market is not anticipating particularly sharp moves, and this may present an opportunity.

Persons: we're, Fiserv Locations: United States

☆ Gauging when Tesla may hit bottom and using options to trade it
▼ + stars: | 2024-01-25 | by ( Michael Khouw | ) www.cnbc.com time to read: +4 min

I'll describe how options traders will bet the bottom is in and the levels they may find attractive to do so. Tesla's margins of nearly 11% are twice those of the 2 biggest U.S. automakers, but a bear will point out that Porsche margins are 13%. Even still, it's not clear that the legacy automakers can compete long term with Tesla or China's BYD. Apple, Amazon, Costco, Lululemon, Nike, Yeti and Tesla are, if the actual dollars spent are measured, high on this list. TSLA YTD mountain Tesla YTD Sometimes, whether it's a fast car, or a fast-moving stock, the best thing to do is wait.

Persons: Gene Munster, it's, Tesla, Tesla's, it's Ford Organizations: Deepwater Management, Ford, GM, Toyota, U.S, Apple, Costco, Lululemon, Nike, Holly Locations: …

☆ Markets 'complacent' about the risks of a Trump win, strategist says
▼ + stars: | 2024-01-23 | by ( Elliot Smith | ) www.cnbc.com time to read: +4 min

Mike Segar | ReutersMarkets are "fairly complacent" about the risks of a second Donald Trump presidency, which could trigger a "tantrum" in long-duration bond markets, according to Guillermo Felices, principal and global investment strategist at PGIM. watch nowSome analysts are also looking ahead through a fiscal and geopolitical lens to November's U.S. presidential election and beyond. 'Fiscal risk' at a time of high deficit The crucial point, Felices acknowledged, is America's deteriorating fiscal position in recent decades. "The market is not really focusing too much on the potential upside risks to yields that are associated with this potential repricing of term premia. [Having] fiscal risks with the sort of deficit that the U.S. is running is a really, really important one that the market will have to come to terms with again."

Persons: Donald Trump, Mike Segar, Guillermo Felices, Felices, Trump, Fitch Organizations: U.S, Republican, New, Reuters, Dow Jones Industrial, Federal, Fed, CNBC, Trump, Bank of England Locations: New Hampshire, Rochester , New Hampshire, U.S

In Hungary, central bank governor Gyorgy Matolcsy is under pressure from Viktor Orban's government to cut rates further ahead of local and European Parliament elections next year. Reuters GraphicsTANGIBLE BENEFITSA 2021 World Bank survey found that political meddling in central bank policy led to sustained periods of high inflation in emerging market economies such as Turkey and Argentina. "Attempts to bring the president of the NBP before the State Tribunal can be directly interpreted as an attack on the independence of the central bank," the spokesman said. How those premia evolve will depend partly on how politics in Poland and Hungary is perceived by investors to influence the central banks in the months to come. "Everything else being equal, the less independent the central bank, the more real yield you need to have to be compensated for the risk," said Arif Joshi at Lazard Asset Management.

Persons: Adam Glapinski, Gyorgy Matolcsy, Viktor Orban's, Donald Tusk's, Karen Vartapetov, Paul Gamble, Glapinski's, Glapinski, Marta Kightley, Orban, Peter Virovacz, Arif Joshi, Karol Badohal, Gergely, Mark John, Toby Chopra Organizations: WARSAW, Law and Justice, U.S . Federal Reserve, EU, Sovereign, Investor, Emerging, Fitch, Local, ING, Lazard Asset Management, Thomson Locations: Hungarian, Poland, Hungary, BUDAPEST, Europe, Turkey, Argentina, WARSAW

☆ European Central Bank VP says escalation in geopolitical risk could spark market correction
▼ + stars: | 2023-11-22 | by ( Jenni Reid | ) www.cnbc.com time to read: +2 min

Markets may be failing to fully price in risks from geopolitics and the economic outlook — and the European Central Bank is monitoring this as a potential threat to financial stability, the group's vice-president said Wednesday. He added, "This is one of the main elements that we believe now could produce volatility in the financial landscape." He was discussing the release of the central bank's Financial Stability Review for November, which tackles the challenges of a "soft landing" that brings down inflation without significant economic damage. However, it says risks to financial stability remain "elevated," as attention is now on the knock-on effects of tight financial and credit conditions on borrowers, and a correction in real estate markets. Nevertheless, because of base effects we will have some increase in inflation over the next months," de Guindos said.

Persons: Luis de Guindos, CNBC's Annette Weisbach, de Guindos Organizations: European Central Bank, ECB

☆ Morning Bid: AI buzzes but market shrugs at Nvidia beat
▼ + stars: | 2023-11-22 | by ( ) www.reuters.com time to read: +5 min

A trader works on the floor of the New York Stock Exchange shortly before the closing bell as the market takes a significant dip in New York, U.S., February 25, 2020. Remarkably, Nvidia managed to vault the sky-high bar for quarterly earnings, revenue and projections yet again in its latest update overnight. Bond volatility (.MOVE) has also fallen to two-month lows, while currency market 'vol' (.DBCVIX) is plumbing 20-month lows. CONCERN OVER HOME SALES, HOLIDAY SEASON SALESNews of a drop in U.S. existing home sales last month to a 13-year low was perhaps as important as the Fed minutes - as was warnings from more major U.S. retailers, this time Best Buy and Nordstrom, about sticky holiday season sales and the need for discounting. The dollar (.DXY) was a touch higher on Wednesday, meantime, with most overseas stock markets firmer too.

Persons: Lucas Jackson, Mike Dolan, thrall, OpenAI, Sam Altman, Changpeng Zhao, October's, Jeremy Hunt's, underperformed, Jeremy Hunt, Bernadette Baum Organizations: New York Stock Exchange, REUTERS, U.S, Nvidia, Federal, Nordstrom, University of Michigan, Bank of Canada, Treasury, Deere, Reuters Graphics Reuters, Thomson, Reuters Locations: New York, U.S, Gaza, China, yearend, York, Beijing

[1/3] Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., November 17, 2023. Closely watched U.S. treasury yields slipped after auction, while global oil futures gained $2 on the prospect of supply cuts. Europe's benchmark STOXX index (.STOXX) inched up 0.1%, with energy stocks (.SXEP) leading gains. The healthcare sector (.SXDP) fell after shares in Bayer (BAYGn.DE) dropped to their lowest in 14 years. The dollar index fell to 103.26, its weakest since the start of September, as investors appeared to solidify bets that the Fed could start cutting interest rates next year.

Persons: Brendan McDermid, Dow Jones, Quincy Krosby, Krosby, Ricardo Evangelista, Goldman Sachs, Moody's, Brent, Chris Prentice, Wayne Cole, Lawrence White, Lincoln, Susan Fenton, Will Dunham, Sharon Singleton, Andrew Heavens Organizations: New York Stock Exchange, REUTERS, Nvidia, U.S, Bayer, Nasdaq, Microsoft, Nikkei, Trading, LPL, Tech, European Central Bank, NAB, Thomson Locations: New York City, U.S, SYDNEY, Thursday's U.S, United States, Europe, Italy, New York, Sydney, London

[1/3] Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., November 17, 2023. The MSCI World Equity Index (.MIWD00000PUS) gained 0.38% by 10:37 a.m. EST (1537 GMT) and Europe's benchmark STOXX index (.STOXX) rose 0.08%. The tech-heavy index (.IXIC) gained 0.44% to 14,187.16, as the Dow Jones (.DJI) rose 0.25% to 35,035.33 and the S&P 500 index (.SPX) gained 0.27% to 4,526.14. The dollar index fell to 103.46, its weakest level since the start of September, as investors appeared to solidify bets that the Fed could start cutting rates next year. "Dovish minutes could trigger some downside risk for the dollar," Ricardo Evangelista, senior analyst at ActivTrades, said.

Persons: Brendan McDermid, Dow Jones, Israel, Ricardo Evangelista, Goldman Sachs, Moody's, Brent, Chris Prentice, Wayne Cole, Lawrence White, Lincoln, Susan Fenton, Sharon Singleton, Andrew Heavens Organizations: New York Stock Exchange, REUTERS, Nvidia, Global, U.S, Nasdaq, Microsoft, Nikkei, Hamas, Tech, Treasury, European Central Bank, NAB, Thomson Locations: New York City, U.S, SYDNEY, United States, Gaza, Europe, Italy, New York, Sydney, London

☆ IMF approves $35 bln credit line for Mexico
▼ + stars: | 2023-11-16 | by ( ) www.reuters.com time to read: +1 min

[1/3] Employees work at a stall in an outdoor market dedicated to the sale of fruits and vegetables, in Ciudad Juarez, Mexico July 27, 2023. REUTERS/Jose Luis Gonzalez/File Photo Acquire Licensing RightsMEXICO CITY, Nov 16 (Reuters) - The International Monetary Fund's executive board has approved a two-year, $35 billion flexible credit line for Mexico, it said in a statement on Thursday, noting the Latin American country's economy is undergoing a broad-based expansion. This is Mexico's tenth flexible credit line arrangement since 2009, and the country has reduced amounts of the lines granted in recent years, the IMF said. In 2017, the IMF granted Mexico a credit line worth around $88 billion, which by 2021 was reduced to $50 billion. Authorities will reassess the external risk outlook and their implications on access under the agreement in November 2024, the IMF added.

Persons: Jose Luis Gonzalez, Gita Gopinath, Gopinath, Kylie Madry, Valentine Hilaire, Nick Zieminski Organizations: REUTERS, MEXICO CITY, Monetary Fund's, IMF, Thomson Locations: Ciudad Juarez, Mexico, MEXICO

☆ Using a stock replacement strategy to book some gains, but still benefit from a year-end bounce
▼ + stars: | 2023-11-16 | by ( Michael Khouw | ) www.cnbc.com time to read: +4 min

Both numbers topped estimates, and still the stock fell after hours, trading below $240 a share as of this writing. At nearly 9 times revenues and 45 times forward earnings estimates, PANW is not a cheap stock, moreover it is still up sharply on the year, and outperforming considerably. Stock replacement strategy One possibility is a stock replacement, selling one's stock holding and replacing that exposure with options. By using a call spread one can maintain some exposure to the upside in the event the stock bounces back. PANW YTD mountain Palo Alto Networks (PANW) CSCO on the other hand, by some measures at least, is a cheap stock, at just 13 times earnings.

Persons: PANW, we've, CSCO, Chuck Robbins, Scott Herren, ANET Organizations: Palo Alto Networks, Cisco, Verizon, Mobile, Comcast, Arista Networks, Broadcom, Flex, Nvidia, CNBC Locations: Palo

☆ UBS predicts tricky start to 2024 for emerging market assets
▼ + stars: | 2023-11-14 | by ( Marc Jones | ) www.reuters.com time to read: +1 min

LONDON, Nov 14 (Reuters) - Analysts at investment bank UBS have predicted that emerging market (EM) assets are likely to have a difficult start to 2024 before picking up and finishing the year with respectable gains. The Switzerland-based bank's outlook forecast that EM fixed income would return 8-10% next year, EM equities 6-8% and 1-3% for spot FX gains, with "most returns backloaded". "With risk premia now highly compressed, we think even a mild U.S. recession can first see EM assets pull back. So be careful what you wish for," the bank's report said. Reporting by Marc Jones, Editing by Louise HeavensOur Standards: The Thomson Reuters Trust Principles.

Persons: Marc Jones, Louise Heavens Organizations: UBS, FX, Thomson Locations: Switzerland

☆ There are 2 factors that may be driving bond yields more than Fed meetings, Societe Generale says
▼ + stars: | 2023-11-02 | by ( Aruni Soni | ) www.businessinsider.com time to read: +3 min

Fed meetings may not be the biggest mover of the bond market, Societe Generale said. AdvertisementAdvertisementDespite US bond yields plunging after Wednesday's Federal Reserve meeting, central bankers may not be moving the market as much as other factors, according to Societe Generale. Another factor elbowing yields higher is the Bank of Japan, according to Edwards. AdvertisementAdvertisementThis week, the BoJ further loosened its grip on bond yields, marking another step back from its so-called yield curve control policy meant to stimulate the economy by keeping interest rates low. "That pressure intensified at exactly the same time as it became apparent just how gargantuan US Treasury issuance had become," he added.

Persons: —, Albert Edwards, Fedspeak, Edwards Organizations: Societe Generale, Bank of Japan, Service, Reserve, Treasury, Treasury Department

And some banks think the Bank of England may be the latest to paper over the QT cracks as soon as this week. Already, there's been some awkward shuffling of feet around a process that was meant to be just balance sheet plumbing. The Federal Reserve may be further away from dealing with the QT issue head on. Deutsche Bank's UK strategists agree and think "the bar for a shift in QT policy is lower heading into yearend." Deutsche argues the BoE could either skew gilt sales shorter or agree to sell evenly based on current market valuations.

Persons: there's, BOE, BoE, BofA, Deutsche, Mike Dolan, Lisa Shumaker Organizations: Bank of England, European Central Bank, Federal, . Treasury, Bank, Treasury, Bank of America, Deutsche Bank's, Reuters Graphics Reuters, Reuters, Thomson Locations: Treasuries, yearend

☆ The new breed of long-haul, low-cost airlines: What you need to know
▼ + stars: | 2023-10-30 | by ( John Walton | ) edition.cnn.com time to read: +8 min

CNN —You’ve seen them on TikTok and on Instagram: people flying on the new generation of long-haul, low-cost airlines where the fares sound too good to be true. By and large, long-haul, low-cost airlines focus on four specific markets: transatlantic, transpacific, southeast Asia and Australia. With a home base at Narita international airport, Zipair Tokyo is Japan Airlines' low-cost arm. Yoshio Tsunoda/AFLO/ShutterstockHome base: Tokyo (Narita, the airport an hour away from the city)Notable routes: Honolulu, LA, SF, San Jose (CA)Flies: Boeing 787sWhat you need to know: This is Japan Airlines’ low-cost arm. Scoot is Singapore Airlines' low-cost arm.

Persons: CNN — You’ve, ” you’ll, Markus Mainka, Pawel Gradek, Yoshio Tsunoda, Edgar Su, “ Organizations: CNN, Boeing, Airbus, That’s, AirAsia X, Buenos Aires, British Airways, Aer Lingus, Atlantic, Atlantic Airways, Air Premia, Premia, Narita, Japan Airlines, Japan Airlines ’, Singapore Airlines, Reuters, Singapore Airlines ’, Qantas, Getty, Jetstar, London, AirAsia Locations: New York, Paris, Asia, Australia, Paris Orly, Orly, LA, Miami, NY, France, Barcelona, Boston, Buenos, Santiago de Chile, IAG, Iberia, Aer, Oslo, London, Gatwick, Berlin, Rome, Chicago, Orlando, Seoul, Incheon, Honolulu , LA, Newark, Frankfurt, Tokyo, Japan, Narita, Jose, Scoot, Singapore, Athens, New Zealand, Southeast Asia, AFP, Honolulu, Kuala Lumpur

Speaking at this week's global finance meeting in Riyadh, HSBC boss Noel Quinn warned of a potential "tipping point on fiscal deficits" for a number of countries across the world. And some analysts fear the uncertainty of next year's funding crush is filtering out the steepening yield curve via the term premium. Term premium at highest in 8 yearsReuters GraphicsCBO long-term US debt and deficit projections'DOOM LOOP'? That's spooky enough, until you start to factor in the recent yield spike and or a return of the term premium to 60-year averages of 150 bp. Tipping point or not, there's a danger the market is starting crystallise the problem it fears most.

Persons: Sukree, Noel Quinn, it's, that's, Stephen Jen, Jen, Goldman Sachs, Jeremy Hunt, Mike Dolan Organizations: HSBC, New York Fed, Federal Reserve, Fed, JPMorgan, Treasury, CBO, Moody's, Reuters Graphics Reuters, Reuters, Thomson Locations: Kasikornbank, Bangkok, Riyadh, U.S, Washington, Europe, Italy

☆ How options traders are setting up for the major tech earnings this week
▼ + stars: | 2023-10-23 | by ( Michael Khouw | ) www.cnbc.com time to read: +15 min

Big Tech earnings This week is less about reading between the lines/through results, and contextualizing management comments, but rather it's about the market itself. AI - AI - AI! The options market is implying an earnings related move of 4.7%. Our options market sentiment score for GOOG/GOOGL is 80th percentile - which one may think of like a score/grade, so a B- in terms of options sentiment. Call open interest is 15% higher than put open interest, our options market sentiment score is 83% so B/B- territory.

Persons: ChatGPT, Bing, it's, AMZN, Mark Zuckerberg's, Zuckerberg, one's Organizations: Cambridge, JPMorgan Chase, Citigroup, Bank of America, BlackRock, Goldman, Equity, Big Tech, Microsoft, Apple, Nvidia, Inc, Investors, YouTube, Amazon, Google, Gaming, Activision, Logistics, Federal Express, CNBC, ExxonMobil, Chevron, Visa, Mastercard, Merck, Co Locations: financials, Wells Fargo

☆ Morning Bid: Stocks struggle as yields rise, tech earnings loom
▼ + stars: | 2023-10-23 | by ( ) www.reuters.com time to read: +2 min

REUTERS/Brendan McDermid/File photo Acquire Licensing RightsA look at the day ahead in European and global markets from Wayne Cole. It failed to impress bond markets, however, as U.S. 10-year yields crept back up to 4.967% having surged almost 30 basis points last week alone. The scale of U.S. borrowing is also likely a concern given Washington last week reported a $1.695 trillion budget deficit for fiscal 2023, fully 23% higher than the prior year and above all pre-pandemic shortfalls. Higher bond yields are also testing valuations for equities and promise pain for any company that misses the market's earnings expectations this week. Key developments that could influence markets on Monday:- No major data scheduledEditing by Jacqueline WongOur Standards: The Thomson Reuters Trust Principles.

Persons: Brendan McDermid, Wayne Cole, It's, Jacqueline Wong Organizations: Western Alliance, New York Stock Exchange, REUTERS, Israel, Nikkei, Bank of Japan, European Central Bank, Microsoft, Intel, IBM, General Motors, General Electric, Thomson Locations: New York City, U.S, Wayne, Asia, Israel, Gaza, Iran, Lebanon, United States, Canada, France, Germany, Italy, Britain, Washington, Japan

☆ Traders buying calls for a quick pop in this medical device name rather than owning shares outright
▼ + stars: | 2023-10-19 | by ( Michael Khouw | ) www.cnbc.com time to read: +7 min

Despite a slight decline in the S & P 500 since Thursday's close, the financial sector is essentially unchanged as I write this. Risk premiums, as implied by options prices on Financial Select SPDR (XLF) vs. SPDR S & P 500 ETF Trust (SPY) , have also narrowed. Put prices on the S & P 500 are slightly higher and put prices in financials are slightly lower. The most active contract, the October $285 calls, traded 445 contracts (44,500 shares worth) at an average price of $6.26/contract. DISCLOSURES: (Owns ISRG calls) THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY .

Persons: Let's, Banks, financials, SPDR, we've, Wednesday's outperformance Organizations: Bank of America, Bank of, Trust, JPMorgan Locations: financials

☆ A low-cost way to protect against an S&P 500 drawdown as risks escalate
▼ + stars: | 2023-10-16 | by ( Michael Khouw | ) www.cnbc.com time to read: +8 min

The Cboe Volatility Index , commonly referred to simply as "the VIX", is an index derived from 30-day S & P 500 index options prices. Put simply, the VIX represents the options market's expectations for S & P 500 volatility over the next 30 days. Sometimes referred to as a "fear index", Friday's VIX Index closing level of 19.32 is only slightly below the 6-month high of 20.09 seen on May 4th. Financials significantly outperformed, finishing Friday up 0.2% while the S & P overall fell by 0.5%. Options traders and strategists are often asked, "Is there a way to use options to hedge my portfolio?".

Persons: Gerald Ford, Dwight Eisenhower, Ike, Ray Dalio, Wells, Financials, doesn't Organizations: Investors, Federal, University of Michigan, West Bank, IDF, Bridgewater Associates, JPMorgan, Citigroup, Trader, Trust Locations: Ukraine, Gaza, Israel, Saudi Arabia, Lebanon, Iran, Europe, Wells Fargo

☆ Bank of England warns U.S. tech stock valuations may be out of whack
▼ + stars: | 2023-10-10 | by ( Samantha Subin | ) www.cnbc.com time to read: +2 min

People walk outside the Bank of England in the City of London financial district, in London, Britain, January 26, 2023. Valuations for U.S technology stocks may be too high given the current macroeconomic backdrop and spike in rates, according to the Bank of England. "Given the impact of higher interest rates, and uncertainties associated with inflation and growth, some risky asset valuations appear to be stretched," the BoE's financial policy committee said Tuesday. "Stretched risky asset valuations increase the likelihood of a greater correction in prices if downside risks to growth materialise." To be sure, this isn't the first time that a central bank has warned of valuations over the years, but as a general rule, central bankers would rather not offer an opinion on any specific market price.

Persons: BoE, premia, Ben Bernanke, Lehman, Alan Greenspan, Greenspan's, — CNBC's Scott Schnipper Organizations: Bank of England, Microsoft, Nvidia, Lehman Brothers Locations: City, London, Britain, U.S

☆ Morning Bid: 'Remarkable' US markets surf crosscurrents
▼ + stars: | 2023-10-10 | by ( ) www.reuters.com time to read: +5 min

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., September 28, 2023. Stock futures are higher once again ahead of the bell today. As cash Treasury markets returned from Monday's Columbus Day holiday to a week of heavy long-term debt auctions, they were also greeted with rekindled optimism about the Federal Reserve's policy rate trajectory. Ten-year U.S. Treasury yields are set to kick off Tuesday's U.S. trading day at some 4.65% - almost a quarter of a percentage point below the peak set just after Friday's blowout September jobs report. Elsewhere, PepsiCo (PEP.O) edged 0.8% higher ahead of the beverage maker's third-quarter results and Unity (U.N) jumped 6.4% after the video-game software maker said its CEO John Riccitiello would retire.

Persons: Brendan McDermid, Mike Dolan, Lorie Logan, Logan, Philip Jefferson chimed, John Riccitiello, Christopher Waller, Neel Kashkari, Mary Daly, Raphael Bostic, Ed Osmond Organizations: New York Stock Exchange, REUTERS, Columbus, Federal, Dallas Fed, Treasury, Monetary Fund, IMF, World Bank, Fund, HK, Bloomberg, Alibaba, Baidu, PepsiCo, Reserve, San Francisco Fed, Atlanta Fed, PepsiCo NFIB Consumer, Reuters Messaging, Thomson, Reuters Locations: New York City, U.S, Israel, Marrakesh, China, Beijing, Minneapolis, San

"The markets will also be following what the scenarios are looking like," he said, and whether, after decades of instability in the Middle East, this outbreak of violence evolves differently. "The question will be is this iteration something that will throw the long-term equilibrium out of balance?" "The conflict poses a risk of higher oil prices, and risks to both inflation and the growth outlook," said Karim Basta, chief economist at III Capital Management, leaving the Fed to sort out whether higher prices or slower growth is the greater concern. To the extent the Israeli war with Hamas heightens concerns about the global economy it could reverse that trend if capital rushes towards the relative safety of U.S. Treasury bonds, as often happens at times of potential crisis. Reporting by Howard Schneider and Ann Saphir; Editing by Andrea RicciOur Standards: The Thomson Reuters Trust Principles.

Persons: Ronen, It’s, Agustin Carstens, Carl Tannenbaum, Karim Basta, Howard Schneider, Ann Saphir, Andrea Ricci Organizations: REUTERS, Rights, Bank for International, National Association for Business Economics, Federal Reserve, Northern Trust, International Monetary Fund, World Bank, III Capital Management, Fed, Treasury, Thomson Locations: Gaza, Sderot, Israel, Ukraine, U.S, Morocco, Iran, Saudi Arabia, Gulf, Suez

Re-enter risk premia on what should be 'risk free' bonds. The renewed corporate profits upswing riffs off this relatively robust nominal growth picture too - as do still benign corporate debt premia. However, keeping a lid on 5% nominal GDP may well be what's irking bonds as much as anything. While turning 10-year averages takes some time, nominal GDP growth according to a real time model from the Atlanta Fed is closer to 8% right now. CBO deficit projections to 2030US nominal GDP growth running at 8%?

Persons: York Fed's, Ajay Rajadhyaksha, today's, Treasuries, Fitch, Andrew Heavens Organizations: Treasury, Federal, Fed, The, Barclays, Societe Generale's, Atlanta Fed, Moody's, U.S . AAA, Reuters, Thomson Locations: U.S, Washington, York, 35bp, 150bp, Treasuries, China, Europe

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