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Top Traders Watching for Inflation

Catherine Holahan of CNBC's "Fast Money"
Thursday, 9 Dec 2010 | 9:58 AM ET

Jobless claims fell more than expected this morning, but the "Fast Money" traders were focused instead on what was rising.

Soaring Japanese bond yields were on Brian Kelly’s radar. The yields on ten-year Japanese bonds are near six-month highs on signs that Japan’s economy may be growing faster than previously expected. “They have risen quite a bit in the past six weeks or so,” said Kanundrum Capital’s founder. The run-up could be a bullish sign for the global economy, indicating that investors are willing to take more risk and bet on equities recovering.

Kelly was also watching food inflation. ConAgra Foods warned today that its second-quarter earnings would fall short of expectations due to the impact of rising commodity prices. ConAgra shares opened lower on the reduced outlook.

ConAgra’s inability to pass on prices could be interpreted as a bearish sign for food companies. But Short Hills Capital’s Stephen Weiss cautioned that ConAgra’s problems may not be indicative of the sector. “ConAgra, they just never seem to get it right,” said Weiss. “I don’t think we should necessarily take them as a bellwether for passing on prices.”

Metropolitan Capital’s Karen Finerman’s attention was on an unusual take-under. Compellent Technologies shares opened down more than 13% on news that Dell would buy the company for $27.50 per share. The data-storage firm’s shares had run-up on takeover talk after the bidding war for 3Par sent sector multiples soaring. “It was known to be for sale, so people got all excited because of the bidding wars in the space,” said Finerman.

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