Retail traders are selling everything but the Magnificent 7, per JPMorgan

JPMorgan strategist Arun Jain with the skinny on retail trading activity through 11:30 a.m. ET today:

“Retail investors are selling into today’s strength in both ETFs and Single Stocks. In ETFs, they are trimming their broad-based exposure—a major departure from their typical pattern.”

SPDR S&P 500 ETF and ProShares UltraPro QQQ suffered particularly large outflows, per Jain.

The exceptions to the selling pressure are the Magnificent 7 stocks, he writes, with Nvidia, Tesla, Meta, and Microsoft enjoying “small net purchases” while Micron, TSMC, Exxon, and Chevron the most-dumped names.

Last week, Jain noted that retail traders had been “skipping the dips, selling into rallies, and positioning more defensively” with markets jittery amid the ongoing Mideast war.

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Luke Kawa4h

Avis shorts facing $1.1 billion in losses as car rental company racks up 155% gains in its recent rally

Whatever traders are doing with Avis — buying, or just renting — it’s causing short sellers an immense amount of pain.

Shares of the car rental company have traded violently on Wednesday, from up nearly 7% at their highs to down almost 4% at their lows, after a face-ripping rally of 155% over the previous 11 sessions.

Per exchange data, roughly half the shares were sold short as of mid-March. S3 Partners, which tracks higher-frequency measures, said that short interest as a share of float had recently been trimmed to about 43%, down from as high as 53% at the start of the year.

Per Matthew Unterman, managing director at S3, Avis shorts are down $1.1 billion on paper over the past 30 days.

This isn’t Avis’ first rodeo: shares went parabolic in Q4 2021 as part of a meme stock moment in which it briefly became the most valuable company in the Russell 2000 small-cap index.

In any event, cheers to u/Bright_Leopard_4326, who admonished other members of the r/ShortSqueeze subreddit for not paying enough attention to the potential for a boom in the stock 10 days ago, when shares were trading below $150.

AVIS short squeeze — Source: r/ShortSqueeze

Even with a fragile ceasefire in place, the energy crisis is far from over. Here’s what to watch for.

In a Q&A with Sherwood, commodities analyst Rory Johnston lays out how to better understand the oil market’s situation.

Matt Phillips5h

Luke Kawa

Everything has a reason to go up now that oil’s down*

*Exceptions include energy and chemicals stocks.

BRITAIN-LONDON-FIREWORKS-NEW YEAR-CELEBRATION

Matt Phillips6h

Data center trade revived on Iran war ceasefire

Data center stocks leapt early Wednesday, as the Iran war ceasefire reinvigorated risk-taking aimed at the booming AI build-out.

A wide range of stocks related to building and powering data center shells, filling them with chips, servers, racks, and memory, and then connecting those racks to one another and users around the world bounced hard in early trading.

Memory stocks like Micron, Western Digital, Seagate Technology Holdings, and Sandisk — favorites of retail traders given their massive performance in recent years — climbed.

Traders seemed to price in durable demand for memory and other chips, with the companies that make the machines that actually make semiconductors rising sharply as well. Dutch semiconductor machinery giant ASML rose, as did Applied Materials, Lam Research, and KLA Corp.

Fiber-optic cable and connecting companies like Lumentum, Coherent, Corning, and Applied Optoelectronics — which had been on a run before the outbreak of Mideast hostilities — regained momentum.

And the construction and engineering companies — MasTec, Vertiv Holdings, Quanta Services, and Comfort Systems USA — that have been feasting on the cash pouring into data center building and engineering also jumped.

Max Knoblauch7h

Airlines and cruise stocks spike after oil plunges on 2-week ceasefire with Iran

Travel stocks are surging Wednesday following President Trump’s announcement on Tuesday evening of a two-week ceasefire with Iran.

West Texas Intermediate crude futures were down about 16% as of 7 a.m. ET. Airlines, which have been pounded by higher jet fuel costs for more than a month now, moved in the opposite direction. Delta Air Lines, United Airlines, and American Airlines were up more than 10% in premarket trading. Southwest Airlines and JetBlue also rose by high single digits. Three major US airlines (JetBlue, United, and Delta) raised baggage fees in recent days as fuel costs climbed.

Cruise stocks also rallied, with Carnival, Norwegian Cruise Line, and Royal Caribbean all up more than 7%.

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