Short Sellers Are Aggressively Betting Against the Market

- Advertisement -
- Advertisement -
- Advertisement -
- Advertisement -

 Stocks were down Monday morning, but the dip follows two straight weeks of gains on Wall Street. So are the crazy declines from the coronavirus outbreak behind us? Not in the eyes of short sellers, reports the Wall Street Journal. They’re betting against the market more aggressively than they have in years. One key measure: “Bets against the SPDR S&P 500 Trust, the biggest exchange-traded fund tracking the broad index, rose to $68.1 billion last week, the highest level in data going back to January 2016,” per the Journal. The figure was at $41.7 billion in January and at $41.2 billion one year ago. “We’ve really seen a significant bounceback in the last three weeks at levels that I think are too quick,” Jerry Braakman of First American Trust tells the newspaper, explaining his company’s recent bet against the Nasdaq-100.

A separate analysis in the Journal digs into investor psychology these days. First came the huge selloff, but then stocks rebounded when worst-case scenarios began to look more unlikely. Investors began tracking epidemiological data instead of the usual financial numbers, writes Grep Ip. That’s understandable, but the danger is that “investors are translating less-bad incremental news into a much faster economic rebound later this year, perhaps prematurely.” Yes, the worst-case scenarios seem to be disappearing, but the big picture—”a massive negative shock to national income,” per Carlyle Group chief economist Jason Thomas—is still with us. “With so few precedents and still so little data, the range of scenarios for the economy is wide,” writes Ip. The recent rally shows that “investors seem to be counting on the better ones.” Even if short sellers disagree. (Read more stock market stories.)

Home of Science
Follow me

- Advertisement -

Discover

Sponsor

Latest

“Omaha: The City That Dreams” By Scott Gordon – A Review

"Omaha: The City That Dreams" By Scott Gordon - A Review"Omaha: The City That Dreams" by Scott Gordon is a travelogue by Oprah...

What a Business Plan Template Can Do For Your Business

What a Business Plan Template Can Do For Your BusinessA Business Plan Template is basically a document containing all of the essential information...

A Sequel to Star Trek Into Darkness That is Still So Important

A Sequel to Star Trek Into Darkness That is Still So ImportantThe new comic book movie Star Trek: Into Darkness is widely considered...

Priyank Chopra’s New Book – The Secret

Priyank Chopra's New Book - The SecretBorn in Calcutta, a city known for its spiritual and healing practices, Priyank Chopra has gone on...

A Quick Way to Find the Best Movie To Watch While You Are In Bed

A Quick Way to Find the Best Movie To Watch While You Are In BedThe new, hot movie streaming service on the internet...
Home of Science
Follow me