Editor's Note: Below is a brief excerpt transcribed from today's edition of The Macro Show hosted by CEO Keith McCullough. Click here to learn more about The Macro Show.
McCullough: When you think about Europe, or any other economy for that matter, every day you wake up to the data across rate of change space. Now, you can see that whether it’s German, French or Swiss, it’s all red relative to the prior reporting period. So the way to read that in this chart is that French Consumer spending went to 0.2% from 0.3% in the prior month.
On that point, can you imagine if U.S. consumer spending slowed to 2%, nevermind 0.2%? If that happened the inversion of the yield curve would be so obvious.
McCullough: So at the end of the day that’s a very bad thing. France had 0% consumer spending growth in a country where it was allegedly going to be different this time. Newsflash, it’s not different this time in France. It’s not different this time in Italy. It is still Socialist. The political change did not do anything.
McCullough: If anything the politicians in Italy are begging the ECB for more QE. If you’re looking for reasons why the Euro continues to break down after failing Hedgeye Trade resistance in my Risk Ranges (within a bearish trend), that’s a very good reason. Allegedly, the Italians are asking for a bailout. And by the way, they’re going to need one.
Subscriber: Is this a bad spot to short more European stocks from a trade perspective?
McCullough: No, no, no. Not at all. I wouldn’t say it’s a great day but European stocks are down today. You want to short things when they’re up.
Spain’s down 70 basis points. Italy is down another half percent. Greece looks like hell.
McCullough: But on the up days that’s when you want to be shorting European stocks at the top of the Risk Range. Yesterday in Real-Time Alerts we said short the Euro. That’s the easiest thing to do because it’s a low volatility way to have exposure to not only the Italians begging for a bailout but also the aggregate Europe slowing relative to the U.S.
