1/ $CME looks interesting in here. For PMs who are looking for ways to hedge long duration equity exposures against risk of rising rates there are not many high quality businesses available (balance sheet financials and energy not really top-of-mind for many).
2/ $CME is the monopoly US interest rate derivatives exchange (as well as dominant positions in commodity futures markets) and has strong operating leverage to an increase in US bond futures/ Eurodollar trades undertaken to hedge against inflation risks.
3/ Stock price fell 16% from June 2021 peak to recent $185 share price low and looks to be back on the hunt for higher levels. Not obviously cheap by any means at 23x EV/EBIT, 28x PE.
4/ But earnings power under a higher volume environment (bond futures trading volumes have been supressed for years due to ZIRP) is much higher. Worth putting on the radar IMHO.
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