The short sellers are massing

Is the summer US stock rally now history? Many investors seem to think so, with waning sentiment pushing traders to hedge against a downturn in the S&P 500 index, the Wall Street Journal writes. Net short positions in the index, which has risen 11% since mid-June but remains down 15% year-to-date, have reached levels not seen in two years, the newspaper reports, as more investors put their money on a fast downturn for the current rally buoying stocks from a bear market. “There’s so much skepticism, so we’re still in the sell-the-rally mentality,” said one senior analyst. “If everybody feels we’re in a bear market rally, it will almost become a self-fulfilling prophecy.”

Data out of China is only getting more meh: Economists have slashed their forecasts for Chinese growth for 2022 and most of next year amid an escalating property crisis and climate- and covid-19-related supply chain disruptions, according to a Bloomberg survey of economists. The economy is now projected to grow just 3.5% this year, down from a previous forecast of 3.9%, while projections for the first three quarters of next year were also lowered by 0.1-0.4 percentage points.

THE CLOSING BELL-

The EGX30 fell 1.1% at yesterday’s close on turnover of EGP 1.19 bn (29.7% above the 90-day average). Local investors were net buyers. The index is down 14.8% YTD.

In the green: Ibnsina Pharma (+6.4%), Orascom Construction (+5.3%) and Madinet Nasr Housing (+3.1%).

In the red: e-Finance (-5.5%), Housing and Development Bank (-3.3%) and Elsewedy Electric (-1.8%).