Stocks climb — and so do shorts
It usually doesn’t work this way: Stocks vaulting to records, and bearish traders getting more aggressive. Lately, it has.
The S&P 500-stock index has climbed 7.9 percent since January, including its biggest gain since April in the just-completed week. At the same time, short interest as a proportion of total shares outstanding has also expanded, rising by 0.3 percentage point to 3.9 percent. Never before has an equity advance as big as this year’s occurred simultaneously with more short sales, according to data compiled by Bloomberg that goes back to 2008.
It’s not hard to see why bears are standing firm, when any mishap from President Trump could wreak havoc in a market where valuations sit at levels not seen since the dot-com era. Just one week ago, stocks suffered their worst rout in eight months as concerns over Trump’s presidency surfaced. Yet the loss was quickly erased, and the S&P 500 rose seven days to reach record highs.
The S&P 500 rose 1.4 percent to 2,415.82 over the five days, finishing the week with the best gain in a month. The Dow Jones industrial average added 275.44 points, or 1.3 percent, to 21,080.28. The tech-heavy Nasdaq 100 jumped 2.1 percent.
The Treasury will sell $45 billion of fourweek bills, $39 billion of three-month bills and $33 billion in six-month bills Tuesday. They yielded 0.75 percent, 0.95 percent and 1.09 percent in when-issued trading.