Strategists at BofA-Merrill see U.S. small-cap outperformance as fit to fade, predicting that earnings growth for the group will lag the market overall. By no means an illogical bet, as the iShares Russell 2000 ETF shorts are up almost half from their record low of four percent in January. But the bearish change in ETF short data shows that tech stocks may be the ones living on the edge.
Examining short interest data for ETFs tracking the S&P 500, Nasdaq 100, and Russell 2000 indices from just prior to the U.S. election, the outlier of bearish sentiment are the tech stocks, which have seen shorts treble, while S&P and Russell shorts have been chased out to levels below those seen before Trump was elected. Investors thinking the recent tech dip was only fleeting have to quickly decide if they want to be long a sector that may require weeks to bottom out.
Source: Bloomberg Pro Terminal
Trader - Senan Fuchedzhiev
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.