SH Stock Recent News

The S&P 500 is expected to consolidate at 4,800 before breaking out and making new highs. Buying activity in SH is still too high and suggests caution on shorting the S&P 500 at current levels. Assets under management in SH are contracting but are still high enough to suggest the stock market has higher to go.

Shorting and inverse trading does not work well in the long run, despite disagreement among investors. ProShares Short S&P500 ETF offers inverse exposure to the daily performance of the S&P 500. SH achieves its net short position through swap contracts and is subject to risks associated with derivatives.

From glancing at the headlines, the concept of acquiring inverse ETFs – that is, exchange-traded funds that rise in value as their underlying securities, assets or sectors fall – doesn't seem very relevant. After all, the September jobs report came in hotter than expected.

ProShares Short S&P500 is currently paying a higher cash yield than owning stocks long through a regular index fund. The trust is yielding around 3.5% annualized on a forward basis, with excess cash income beyond its management fee paid to holders. This setup is encouraging risk takers to go short stocks instead of long, a major change of tune for investors.

Interest in SH has been declining, with the number of shares outstanding dropping from 250,000,000 last October to 117,256,000. This is a positive signal for a higher stock market. There has never been a bear market, or major market decline, to start until buying in SH first dropped to just 5% of assets. It's currently at 17% of assets. SH should be avoided at this time. We expect the start of another bear market, and a possible investment in SH, later this year.

In 2023, despite expectations of a market collapse, equities rallied as short positions were covered and long put positions closed. Hedging strategies, such as selling equities or using inverse ETFs like ProShares Short S&P500 ETF, can help reduce risk for retail investors. A risk-off event is expected in the second half of the year, and investors should consider hedging strategies to protect their portfolios.

Morgan Stanley's bearish outlook on the S&P 500 has raised concerns among investors.

The ProShares Short S&P500 ETF is an inverse fund that allows investors to short the market without using a margin; however, the current bull market may not be the best time to invest in it. Despite negative headlines and market volatility, the S&P 500 is up 20% from its low in Q4 2022, and retail outflows have been steady, suggesting a contrarian approach to investing. SH is a simple and cost-effective way for retail investors to bet against stocks, with an expense ratio under 1% and minimal concentration risk in its swap positions.

We recommend investors stay out of SH because of the high levels of bearish sentiment shown by our Master Sentiment Indicator, as well as bearish activity in SH itself. Buying levels in SH are still historically high, marking continued levels of unacceptable bearish sentiment.

Investors for now seem to be content with the data. Inflation has slowed for the sixth straight month, after peaking in June 2022 at 9.1%, and is now the lowest it has been since October 2021.