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Short sellers trim positions as US bull market continues
08 February 2017
Demand to borrow shares across US stocks is down by 10% since US election
The post-election bull market across US equities has led
short sellers trim their positions, according to statistics
from IHS Markit.
Demand to borrow shares across US stocks is down by 10%
since Donald Trump won the race to the White House in
The best performing 10% of US-listed shares have seen shorts
retreat by a fifth since election.
US equities have been climbing again this week, sending the
Dow Jones and Nasdaq into record territory.
The S&P 500 trading just below its own record
Investors are confident Trump’s pledges of tax
cuts, deregulation, and infrastructure spending will be good
for American businesses.
"Investors are yet to see the need to crystalize the recent
market wins by taking the other side of the rally through
bearish short positions," said analyst Simon Colvin
"Whether this shrinking short interest represents a
legitimate shift in sentiment or is simply shorts being forced
to close positions in the wake of the massive 53% rally seen in
high momentum names remains to be seen.
"But there’s no escaping the fact that several
of these names have seen their fortunes change materially over
the last three months.
Colvin points to United States Steel, which has short
interest has fallen by over two thirds over the last three
months after a 60% rally in its share price.
Tech firm Nvidia has been another painful short since the
start of November.
Shares have surged by 61% after the firm announced better
than expected earnings.
"Short sellers have shown no appetite to short this rally as
demand to borrow Nvidia has fallen to a new 18 month low,"