Nasdaq 100 sees increasing short positions amid elevated interest rate concerns

Citigroup Inc (NYSE:). strategists highlighted a growing trend of investors taking short positions in the on Tuesday, a reflection of rising apprehension about the technology sector. The concerns stem from the possibility that interest rates could remain high for an extended period, which could negatively impact this sector.

The Nasdaq 100 experienced a significant surge earlier this year, with a 45% increase until reaching its peak in July 2023. However, following indications from the Federal Reserve that rate cuts were not imminent, the index has since seen a 6.8% dip.

According to a report led by Chris Montagu at Citigroup, the current positioning in the Nasdaq 100 is heavily skewed towards net short at $8.1 billion, as investors have liquidated all long positions. This shift in investor behavior is seen as indicative of a broader sentiment of caution that is currently prevalent globally.

In contrast, have only seen a slight net short position and still maintain $15 billion in long positions. This indicates that while there is some level of pessimism among investors, it is not as pronounced as the sentiment towards the Nasdaq 100.

The tech sector’s attractiveness has also been affected by the rise in bond yields, contributing to the increasing trend of short positions due to its high valuations. Despite these shifts, Montagu pointed out that net positioning across all markets is not excessively skewed and profits or losses are not significantly large. This suggests that market positioning remains relatively light and mirrors the prevailing global bearish sentiment.

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