Short-Covering Is Lying Beneath the Recent Stock Market Rebounds
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The S&P 500 Index has started each day this week down significantly on fears of trade wars and slowing economic growth only to recover and close well into the green. While the movements of the stock market aren’t always clear, there is a culprit lurking beneath these moves: short-covering.
Goldman Sachs Group Inc.’s basket of the most-shorted stocks is up 3.2% on Wednesday, beating the S&P 500’s 0.5% gain. The implication is some investors are covering their short bets ahead of President Donald Trump’s tariff announcement 4 p.m. in Washington.