What Matters Today: Four “crowded short positions” which we think could be wrong through the reporting season

Reporting season throws up increased volatility on the stock level, illustrated perfectly by the +20% surge higher by Facebook parent Meta Platforms (META US) last week. However, when the market is positioned very bearishly towards a stock, and it beats or isn’t too bad, the move can be exaggerated on the upside as shorts look to buy back stock &/or fund managers attempt to get some exposure before it gets away from them. While shorting can get a lot of headlines, it is difficult to consistently get right and big losses from shorts are common place. When short a stock and it rallies, the problem gets bigger/worse, unlike a bought stock that goes down, the problem gets less influential on returns. Buying heavily shorted stocks can at times yield strong, quick gains.

scroll

OPINION
ACTION

Latest Reports

Alerts 04/08/2025 09:53

Trade Alerts – Active Growth & Income Portfolio’s

MM is making two changes across two portfolios

Morning report 04/08/2025 09:20

Macro Monday: The Goldilocks Trade tailwind is being questioned

Since Trump unleashed chaos on global equities in April with his tariff bombshell, their recovery has been nothing short of remarkable. In just three months, the ASX200 and US S&P 500 have surged by +22% and +33% respectively. At MM, we’ve held a bullish stance through the recovery, but our confidence is now waning. The cornerstone of the stunning recovery has often been referred to as the “Goldilocks Scenario”.

Weekend report 02/08/2025 09:33

Weekend Q&A: A weak US Jobs Report weighs on stocks ahead of reporting season

The ASX200 slipped 0.1% last week after a tough Friday session, but it still ended up 2.3% for July. Earnings season is upon us, and it's already started to exert its force on the market - It's not often you see an ASX200 stock halve in the blink of an eye! We have begun the seasonally weak August-September period for the ASX, and on cue, the index has started to feel a touch soft, although 2-days doesn't make a summer.

Afternoon report 01/08/2025 17:07

The Match Out: Soft end to a choppy week for the ASX

Tariffs were back impacting the ASX today after the Whitehouse said that it will maintain a minimum global levy of 10%, while imports from countries with a trade surplus with the US will face at least 15%.

Morning report 01/08/2025 09:34

ETF Friday: ETFs to consider as the President hammers the Copper Traders

The ASX 200 ended the Thursday session down just 0.2%, recovering ~80% of its early decline, with winners and losers evenly matched. July lived up to its seasonal reputation, closing up +2.4%. If not for a -2.6% clobbering of the influential Materials Sector yesterday, we could easily have been trading at new highs.

Afternoon report 31/07/2025 17:22

The Match Out: ASX drifts lower as Materials slump on US Copper selloff

The ASX started the day on the backfoot with the materials space copping a beating after the ~20% selloff in US copper overnight as the index fell -55pts early, but the ~8700 level held well.

Morning report 31/07/2025 11:31

What Matters Today: The GLP-1 Ozempic-Esque drugs illustrate the dangers of chasing the next “Hot Thing”

The ASX200 surged +0.6% on Wednesday, closing within 0.2% of its all-time trading high after the soft inflation print ignited the rate-sensitive stocks/sectors. Real estate, consumer discretionary, and the financials all closed up more than 1%.

Afternoon report 30/07/2025 17:23

The Match Out: Soft inflation print lights the ASX up on rate cut optimism

A strong session for the ASX today back testing all-time highs with softer than tipped inflation data at 11.30am the catalyst. The RBA having been waiting for this quarterly print on price pressures, and now the door is fully ajar for a rate cut on the 12 August.

Morning report 30/07/2025 09:30

Portfolio Positioning: Today’s CPI is likely to determine if we get an interest rate cut in August

The ASX200 rallied bravely throughout Tuesday to close slightly higher after being down 0.6% earlier in the day. In an overall quiet session, none of the major 11 sectors moved by more than 0.7% but if you look deeper under the hood, it was a tough day for uranium stocks, even though ironically the energy sector was the best on the ground, closing up +0.65%.

Afternoon report 29/07/2025 17:51

The Match Out: Strong recovery from early weakness ahead of inflation data tomorrow

The ASX is looking interesting here for the chartists, with the market having broken out mid-month before coming back to consolidate above the ~8600 breakout level. Today was important, with a retest and ultimate rally, and while the main board only put on +6pts in aggregate, it was +60pts from the morning low – a bullish sign. The move will be tested tomorrow with the important inflation data out at 11.30am, a more benign print (sub 2.1%) should see the market break higher, and vice versa on a hotter read. A pivotal penultimate day of the month! • The ASX200 +6pts/+0.08% closing at 8704