Economy

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

Hedgeye

2.86K Followers

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.

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.