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It has so far been a bruising November for those investors betting against cyclically oriented sectors that have been hobbled due to the spread of a coronavirus and social-distancing measures.
The pain for short sellers, who use leverage to bet that the value of an asset will fall, intensified at the start of this week after an upbeat update on a vaccine candidate from Pfizer PFE, -0.46% and partner BioNTech BNTX, -2.93% on Monday sent Wall Street scrambling into beaten-down stocks like travel and leisure and out of technology-related investments.
The moves resulted in a broad-market surge, which particularly benefited small-capitalization stocks and assets considered to be undervalued by some metric.
Indeed, the small-cap focused Russell 2000 index RUT, -0.00% is up a stunning 5.2% so far this week, pushing it to trade at its first record in about two years, while the tech-heavy Nasdaq Composite Index COMP, +2.01% is down 1.1% thus far on the week, despite a nearly 2% rally on Wednesday. That marks the widest margin of outperformance between the Nasdaq Composite and the Russell on record dating back to 1986, Dow Jones Market Data said.
Meanwhile, value-oriented investments are outperforming growth, those investments that tend to grow earnings and profit faster than others over time, at least briefly breaking a decadelong trend of outperformance by growths assets that tend to reside in the tech and internet categories.
Read: Stock market rally due for ‘pause’ as rotation from growth to value hits an ‘extreme’
So far this week, the iShares S&P 500 Value ETF IVE, -0.31% was up 5.2%, while its growth counterpart, the iShares S&P 500 Growth ETF IVW, +1.41%, was down 0.3% over the same period.
And momentum-oriented trades, bets on stocks that are expected to rise because they have in the past, were down 2.4% this week, as measured by the iShares MSCI USA Momentum Factor ETF MTUM, +2.03%.
“In a sign of the potential of a post-COVID rotation, [Monday] was the biggest single day spread between Momentum and Value factor performance in the 28 year history of our data,” noted analysts at Evercore ISI in a Tuesday report.
All that seismic movement resulted in short sellers registering paper losses of approximately $5.5 billion since Nov. 1, according to a data provider Ortex Analytics.
Here’s a list of the companies stocks that they say inflicted the most pain on short sellers:
| Company | Short paper profit/loss $ |
| Carnival Corporation CCL, -3.10% | -$520,645,038 |
| Expedia Group EXPE, -2.48% | -$382,521,909 |
| Booking Holdings BKNG, -0.37% | -$345,380,994 |
| Royal Caribbean Group RCL, -3.86% | -$320,378,441 |
| Visa Inc. V, -0.28% | -$316,980,481 |
| American Airlines AAL, -2.74% | -$274,828,946 |
| Wynn Resorts WYNN, -5.12% | -$253,785,998 |
| Norwegian Cruise Line Holdings Ltd. NCLH, -2.98% | -$251,891,345 |
| Boeing Co. BA, -3.46% | -$242,611,684 |
| Walt Disney Co. DIS, -3.01% | -$236,193,825 |
| Source: Ortex Analytics |
Of course, there were trades that benefited short sellers:
| Company | Short paper profit/loss $ |
| Zoom Video Communications ZM, +9.92% | $999,668,166 |
| Wayfair W, +3.72% | 936,782,953 |
| Tesla TSLA, +1.65% | $460,179,958 |
| Teladoc Health TDOC, +5.86% | $457,657,390 |
| Sea Ltd. SE, +8.05% | $449,411,262 |
| Alibaba Group Holding BABA, -0.33% | $448,493,764 |
| Amazon.com AMZN, +3.37% | $420,741,075 |
| Netflix NFLX, +2.19% | $416,490,778 |
| Peloton Interactive PTON, +0.95% | $375,821,804 |
| Square SQ, +6.64% | $364,371,882 |
It’s still unclear if the resurgence of value will hold, tech stocks were making a comeback Wednesday while the Dow Jones Industrial Average DJIA, -0.07% and Russell 2000 were both trading lower on the session.
