BofA trading desk says hedge funds are reloading short bets on stocks most
sensitive to interest-rate moves after covering positions during the recent
rally; the desk cautions the reversal could mark a new phase in the shorting
cycle. BofA data show small-cap stocks with widespread short interest were down
an average 2.47% by 1:40pm New York time on Thursday; the Russell 2000 was down
1.4% by 2:43pm. John Egan, head of global short-selling analysis and tactical
solutions at BofA, said stocks with broadly held short positions are
underperforming, a dynamic that favors short sellers.
