Why Investors Should Stay Long "Expensive" Utilities & Short "Cheap" Financials | $XLU $XLF

07/06/16 09:01AM EDT

Why Investors Should Stay Long "Expensive" Utilities & Short "Cheap" Financials | $XLU $XLF - Cheap cartoon 05.16.2016

We're sticking with what's worked all year.

As Hedgeye CEO Keith McCullough writes in a note sent to subscribers earlier this morning:

"Our Q3 Macro Themes Call is tomorrow and I’m staying long “expensive” (Utes, XLU +22.1% YTD) vs. short “cheap” (using the wrong bond yields, spreads, etc.) Financials (XLF -6% YTD); interesting immediate-term TRADE break-down signal in Basic Materials (XLB) yesterday – we’ll see if there’s follow through on deflating the “reflation.”

 

Why Investors Should Stay Long "Expensive" Utilities & Short "Cheap" Financials | $XLU $XLF - sector performance 7 6

In the video below, Hedgeye CEO Keith McCullough explains why we like "expensive" Utilities:

https://youtu.be/bgnI4arMCWs

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