"What else do you have to do that will actually have to affect the Iranians' calculus?" said Amos Hochstein, who served as U.S. special envoy for international energy affairs...World Politicsread more
Reports of tensions may have been sparked by Kraft Heinz's underperformance, and because of accounting problems at the packaged goods company.Investingread more
The leaders of Japan and China got off to a tense start but have made significant progress in turning around their relations in recent years.Asia Politicsread more
Tech's hottest IPOs of the year, including Beyond Meat and Zoom, dropped on Monday, falling more than the broader market.Technologyread more
Citi Private Bank says it has maintained an "overweight" stance on stocks in China, Hong Kong, Taiwan and South Korea.Asia Marketsread more
FedEx sued the U.S. government, saying it should not be held liable if it inadvertently shipped products that violated a Trump administration ban on exports to some Chinese...Traderead more
SpaceX used its high speed boat called "Ms. Tree" to catch the nosecone its Falcon 9 rocket after Monday's launch.Investing in Spaceread more
Stocks in Asia slipped on Tuesday, while investors looked toward a meeting between U.S. President Donald Trump and Chinese President Xi Jinping set to happen later in the...Asia Marketsread more
A week of dovish fireworks out of the central banking community has just gone by with most of the world's leading central banks now guiding towards easing in light of downside...Commentaryread more
"We do not seek conflict with Iran or any other country," Trump tells reporters in the Oval Office.Politicsread more
Chinese Vice Premier Liu He held a phone conversation with U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin, China's Ministry of Commerce...World Economyread more
Investors simply need to adjust to the current environment rather than ditch their equity portfolios amid geopolitical concerns and fears of a market correction, a U.S. asset manager told CNBC Wednesday.
With the S&P 500 up nearly 10 percent year-to-date at a time when geopolitics is worrying investors, some money managers have begun considering a market correction. However, Carol Pepper, chief executive officer at Pepper International, believes that stocks have plenty of room to run.
"I think we are mid-way through the game, I don't think we are at the end of the game, and I'll tell you why, because we've had 10 years of a flat market and 10 years is a long time … You could say we have 5, 6 years to run," Pepper told CNBC Wednesday morning.
She projects a small sell-off followed by a quick snapback. "People have been talking about fatigue in the rally since the rally started," she said. "I think stay the course through the end of the year. Yes, we will have a few more dips of course, this North Korea thing is very disturbing, but assuming we don't go to war, somebody doesn't go to war with North Korea, I believe by the end of the year, will be at least this level if not higher, " Pepper explained.
Discussing three different reasons for why investors should stick to U.S. equities specifically, she says corporates still have a lot of cash, the country still has little pressure on wages and there's still lots of capital expenditure to be done. "The corporations themselves are much more bullish than the market. Everybody in the market is a 'nervous nelly' and I don't see that in the corporate side … I think we have got more of a run to go," she added.
Markets have seen some negative trading sessions since the escalation of tensions between North Korea and the United States. However, those watching out for a correction mention that China's debt pile and changes in the discourse of central bankers could be the trigger to a sell-off too.
"In our opinion, the highest risk/probability for such a trigger event is still a slowdown in China – not (yet) North Korea or Trump," Lothar Mentel, chief executive officer and chief investment officer at Tatton Investment Management, told CNBC via email Tuesday.
He added that monetary policy is the second highest risk for a market correction. Investors have been working on the assumption that the U.S. Federal Reserve will continue raising interest rates and slowly remove its stimulus. However, such assumptions have recently become less clear cut with investors worrying about the lack of policy delivery by the U.S. administration, which has promised a range of fiscal policies including tax cuts and infrastructure spending that could support the Fed's normalization policy.
If indeed, investors believe that stocks have still room to offer, the secret is to be adequately allocated. Pepper told CNBC Wednesday: "Stay with your equity positions; be properly allocated so if you're overly afraid to meet that (sell-off) stage you haven't done your allocation properly."
"We have to take long-term positions that are going to work over years and frankly I just don't see it in financials. The Street has been pushing this trade for at least two years … But if you look at what's happening, we're not going to have the interest rate rises that we thought we were going to have. So they're not gonna get the margins, we aren't seeing any easing in regulation, where's the juice in that trade?," she wondered.
Many investment managers said at the start of the year that the financial sector would outperform this year on the basis that central banks are due to lift the stimulus pedal and raise interest rates – thus giving banks a better yield on their investments. They also predicted policy moves by the U.S. administration which would slash key banking regulations. Central banks seem, however, a bit more cautious about the pace for policy normalization and President Donald Trump hasn't yet delivered on these key policy pledges.