Investors' Bearish Bets on U.S. Stocks Reach Decade High

Speculative traders are betting against US stocks, with net-short bets in S&P 500 e-mini futures reaching their highest level since 2011. However, history shows that outsize short positioning in futures has typically served as a counter-indicator, with the market often doing the opposite of what futures traders expect. Equity strategists have also become increasingly pessimistic, but there is a disconnect between futures and actual stocks, with liquidations of cash equity positions remaining subdued. While signs of stress have been creeping back into the market, some analysts believe that a crisis is unlikely to happen.