Why Short Europe (Still) Makes Lots Of Sense

|
Includes: CEE, ESR, EUFL, EUFN, EUFS, TRF
by: Hedgeye
Summary

It's not too late to start shorting both Europe.

There is still plenty of downside in Europe that will be expedited by secular and demographic headwinds.

Plus, the ECB is still catching up to our call on #EuropeSlowing.

Hedgeye’s macro team has been bearish (and correct) on European equities throughout 2018, and the Euro versus the dollar since April. Both market calls were made well ahead of consensus.

On a recent edition of The Macro Show, a viewer asked:

Is it too late to start shorting both Europe and its major currency now that consensus seems to be catching up to our call?

Hedgeye Risk-Manager-In-Chief Keith McCullough explains that while investors have missed a portion of the move this year, there is still plenty of downside in Europe that will be expedited by secular and demographic headwinds.

“It’s a less contrarian position,” McCullough explains.

“But a less contrarian position doesn’t necessarily mean a less good position. Even though consensus has come my way a little bit, the ECB definitely has not come my way – a lot.”

Watch the full video above for more.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.