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Bears Unwinding Positions Leaves Rallying Stocks Exposed

  • CTAs hold neutral exposure for the first time since March
  • JPMorgan says funds may go short again should growth pick up

The extreme pessimism that’s gripped American stock investors for much of the year is starting to dissipate. That might be reason for caution.

Stock bulls betting the whiff of recession means the worst of the Federal Reserve’s rate-hike medicine has been administered drove the S&P 500 to a second day of gains and the highest level in almost two months.