Stocks are up Big Time today on speculation that the Senate will finally pass a $1.8 trillion (remember when it was just $1.2 trillion?) coronavirus rescue package.
As of the close today, March 24, the Standard & Poor’s 500 was up 9.38% to 2437.33, and the Dow Jones Industrial Average had climbed 11.37%. The NASDQ Composite was higher by 8.12% and the Russell 2000 small cap index had gained 9.39%. The iShares MSCI Emerging Markets ETF (EEM), had climbed 7.48%.
But those gains were penny change compared to the soaring price of the most shorted stocks on the markets.
MGM Resorts International (MGM), for example, was up 33.11%. Spirit Airlines (SAVE) had gained 37.64%. Royal Caribbean (RCL) had climbed 22.28%. Shake Shake (SHAK) was higher by 22.93%. First Quantum Minerals (FQVLF) had rocketed higher by 41.71%. General Motors (GM) was ahead by 19.94%. Solar Edge Technologies (SEDG) had gained 22.78%
See a pattern here?
A basket compiled by Goldman Sachs of the U.S. stocks with the biggest short positions–in other words stocks that traders were betting would continue to fal–was up by a double-digit percentage at noon New York time. That would be the biggest gain for this basked since 2012. Stocks in the basket include Bed Bath & Beyond (BBBY), up 28.25% as of the close, and Beyond Meat (BYND), up 17.17%.
Interestingly the CBOE S&P 500 Volatility Index (VIX) was actually up very slightly by 0.12% to 61.67. . That index tracks the prices of the S&P options and futures over the next 30 days or so. The extremely high reading on the index–somewhere from 15-20 would be “normal”–and the relatively slight gain today indicates that traders are still looking for more downside in this market over that period–no matter what the short-covering rally today says about individual stock positions.