Why Short Europe (Still) Makes Lots Of Sense

Dec. 13, 2018 3:12 PM ETEUFN, CEE, TRF, ESR, EUFL, EUFS4 Likes
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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.

This article was written by

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Hedgeye Risk Management is an independent investment research and online financial media firm. Focused exclusively on generating and delivering thoughtful investment ideas in a proven buy-side process, the firm combines quantitative, bottom-up and macro analysis with an emphasis on timing. The Hedgeye team features some of the world's most regarded research analysts - united around a vision of independent, un-compromised real-time investment research as a service. We measure ourselves on our core values: Transparency, Accountability, and Trust.
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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.

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