According to S3 Partners, since the end of April, the total short positions in the US and Canadian stock markets have increased by nearly $100 billion, reaching $2.13 trillion, the highest record since 2010. According to Goldman Sachs data, the median net short position ratio of S&P 500 constituent stocks has risen to 3% of market value, the highest level since the end of 2011. Goldman Sachs pointed out that the upward momentum in the market may come from the short selling situation triggered by short covering, especially in sectors with high concentration of short positions where the risk of reversal increases. The net short position in the healthcare sector has reached its peak in nearly 30 years, while the utilities and consumer goods sectors are also close to historical highs. Hedge funds have recently accelerated their purchases of non essential consumer goods sectors, with net exposure to essential consumer goods experiencing the fastest decline in over five years. Wolfe Research believes that the easing of geopolitical tensions may benefit sectors such as non essential consumer goods, technology, and industry.
