ADVERTISEMENT
ADVERTISEMENT

Traders betting against Wall Street's favorite Trump trade are making a killing

Last week, bets against banking stocks paid off as uncertainty mounted over the future of the American Health Care Act.

null

The biggest beneficiaries of the so-called Trump rally are giving up some of the gains they made after the election.

Financial stocks on the S&P 500 jumped 26% after the election, and were the poster child for Wall Street's biggest bets on the new administration.

Last week, traders increased their bets against banking stocks as uncertainty mounted over the future of the American Health Care Act. According to S3, a financial analytics firm, short sellers in the top ten bank stocks last week gained 6.35% net of financing and mark to market.

Trump's agenda includes rolling back some post-crisis regulations and corporate tax reform, both of which make the sector more attractive. Also, if many of the pro-growth promises are kept, the Federal Reserve would probably raise interest rates in step with rising inflation, and that would help banks earn more for lending.

ADVERTISEMENT

But financials topped out on March 1, and traders who sought to profit from a reversal of the uptrend are starting to count some gains.

Short interest should increase if the sector's losses continue, said Ihor Dusaniwsky, the head of research at S3 Partners, in a note. The three stocks with the highest short interest last week were JP Morgan, Bank of America, and Wells Fargo.

Financials led losses in early trading on Monday with a 2% decline.

JOIN OUR PULSE COMMUNITY!

Unblock notifications in browser settings.
ADVERTISEMENT

Eyewitness? Submit your stories now via social or:

Email: eyewitness@pulse.ng

Recommended articles

Here's everything to know about being a virgin on your wedding night

Here's everything to know about being a virgin on your wedding night

7 do's and don’ts of the Holy month of Ramadan

7 do's and don’ts of the Holy month of Ramadan

Top 5 sweetest celebrity mother-child relationships that stand out for us

Top 5 sweetest celebrity mother-child relationships that stand out for us

International Women's Day: 5 Nigerian female celebrities championing women’s rights

International Women's Day: 5 Nigerian female celebrities championing women’s rights

Top 5 female directors in Nollywood

Top 5 female directors in Nollywood

6 things that will break a Muslim's fast during Ramadan

6 things that will break a Muslim's fast during Ramadan

5 benefits of fasting during Ramadan

5 benefits of fasting during Ramadan

5 reasons Easter was more fun when we were children

5 reasons Easter was more fun when we were children

Dos and don’ts of supporting Muslims during Ramadan

Dos and don’ts of supporting Muslims during Ramadan

ADVERTISEMENT
ADVERTISEMENT