Stocks climb — and so do shorts

The Washington Post Sunday - - MARKETS -

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.

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