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Short sellers are increasing their bets against the basic materials sector as uneven global demand and volatile energy prices continue to dampen investor sentiment into 2024.
Average short interest across S&P 500 materials stocks increased 19 basis points, from 1.54% at the end of December 2023 to 1.73% of shares float in mid-January.
The S&P 500\’s Materials Select Sector SPDR Fund ETF (NYSEARCA:XLB) is down 2.7%, compared to the broader S&P 500, which climbed 2% from the start of the year.
Industry Analysis:
Average short interest as a percentage of floating shares
Containers & Packaging remains the most shorted industry within the materials sector with 2.27% short interest as of mid-January, up from 1.99% at the end of 2023.
Chemicals was the second most shorted industry within the sector with 1.62% short interest as of mid-January, compared to 1.35% from December 2023.
Construction Materials was the least shorted industry within the sector with 1.29% short interest as of mid-January, fractionally higher from December 2023.
Stocks with the largest and least short positions.
Ranked by short interest as a percentage of shares float
Short interest for five of the index\’s biggest companies, Linde (LIN), Sherwin Williams (SHW), Air Products + Chemicals (APD), Freeport McMoran (FCX), and Ecolab (ECL) averaged 0.8% at the end of December.
Lithium miner Albemarle (ALB) is the most shorted in the sector at 12.07%, followed by Celanese (CE) and FMC (FMC) at 5.8% and 4.74% respectively, while Ecolab (ECL) is the least shorted stock at 0.7%.
