(Editor's note: Below is a brief excerpt from Hedgeye CEO Keith McCullough's conference call with investors earlier this morning. For more information on how Hedgeye can help you, please click here.)
I am interested in buying Germany here. Have not done that yet. We went with the UK index instead.
The UK index is interesting—I had a lot of questions on that yesterday because it’s obviously not all the UK. It’s kind of a back-door way to play this broadening theme of Europe—I wouldn’t say “recovering,” I would say "not going to hell in a hand basket." That’s the most appropriate way to describe what’s going on there right now.
If you’re just to look at this mathematically, which is the slope of the line—you can characterize something with words however you want—but the slope of the line has stabilized in Europe. In the big places. Over in the UK, it’s actually accelerating. And that’s just the point. That’s why those markets are interesting.
That’s also why the bond markets are not interesting. In fact, they look like shorts. Whether you look at the the German bond market, or the UK bond market, they look like hell. They look like the US bond market does because again, rates are rising. And it’s not just in the US, because these things follow the slope of growth which at a bare minimum in Europe is not slowing anymore, which is of course bullish on the margin if you’re looking at the slope of the line.