The list is dominated by the aerospace and defense sector, and includes companies such as Boeing, Raytheon Technologies and Northrop Grumman, all of which are prime contractors for the Pentagon. He looked at the current options pricing setup and found 19 names with at least 10,000 open contracts where 30-day and 90-day at-the-money implied volatility is below that of the SPDR S & P 500 ETF Trust. Chronert then added a volatility screen to his list of direct- and indirect-exposure stocks. "Our bias is to consider classic hedges that can be quickly reupped or unwound rather than a two pronged 'sell the concern, buy the Resolution,'" he added. "While relative performance of these exposures could be a good event hedge, we argue that the relative volatility setup of the underlying stocks and related ETFs may prove most effective and durable," Chronert wrote. In aggregate, they had more than 5% of revenue tied to those stocks with the most direct exposure. Its indirect exposure stock names also had at least a $500-million-market cap. government revenue, representing more than 5% of the companies' top lines. The direct revenue-exposure companies had at least $500 million in market cap and at least $250 million in U.S. To find those stocks, the Wall Street firm first looked for companies that have meaningful direct or indirect revenue exposure to the U.S. That could present an opportunity to buy put options on the stocks Citi says are vulnerable, giving the holder the right to sell the underlying stock shares at a predetermined price before the contract expires. equity strategist Scott Chronert wrote in a note Friday. credit default swap markets have moved significantly year-to-date," U.S. equities are pricing in enough event risk around a debt ceiling standoff even though U.S. As the fight over the debt ceiling - and talks of spending cuts - ramp up, some stocks will trade down, Citi pointed out. " She also repeated the government may run out of money to pay its debts as soon as June 1. On Sunday, Treasury Secretary Janet Yellen warned failing to raise the debt ceiling will cause a " steep economic downturn. Lawmakers have been trying to find a way to raise the debt ceiling so the government can pay its bills on time.
debt ceiling should focus on stocks that are tied most to government spending, according to Citigroup. Investors looking to trade the showdown over the U.S. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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