Investors are stepping up bets against a broad collection of stocks as the broader market gets increasingly volatile following another hotter-than-expected March inflation report . Stocks sold off and Treasury yields jumped Wednesday when inflation was shown to be under less control than investors had counted on. Losses continued early Thursday before prices recovered in late trading. The souring sentiment on Wall Street pushed Bank of America to now see only one rate cut in 2024 , and not until December. BMO Capital Markets also lowered its forecast to just one cut in 2024, down from three previously. Against this backdrop, CNBC screened for stocks that hedge funds and other investors are betting against as markets stall, looking at the number of shares sold short as a percentage of the “float,” or the total number of shares available to be traded. Shorting a stock entails borrowing shares, selling them, buying them back at a lower price and pocketing the difference. Residential solar provider SunPower is the biggest short on our screen. The entire group of solar stocks, along with other renewable energy providers, is considered interest-rate sensitive due to their reliance on financing. Unfortunately, the latest economic numbers suggest no need for the Federal Reserve to take its foot off the interest rate brakes. SunPower missed Wall Street’s estimates when it reported fourth-quarter results in February, posting a wider-than-expected loss and issuing disappointing full-year earnings guidance. SPWR YTD mountain SunPower stock. Shares have been under immense pressure in 2024, plunging 48% through Thursday. Short interest as a percentage of SunPower’s float approaches 77%, while only 7% of analysts polled by FactSet rate the stock the equivalent of a buy, with 57% saying it’s no more than a hold. B. Riley Financial is also seeing large short interest, amounting to almost 76% of its float. Shares have risen 9% so far in 2024 after collapsing 39% in 2023 and nearly 62% the year before. RILY YTD mountain B. Riley Financial stock. B. Riley in February sought an extension to file its 2023 annual report with the Securities and Exchange Commission, saying it’s dedicating most of its resources to an independent audit of its board of directors . The next month, B. Riley said it reached an agreement with one if its lenders, Nomura Corporate Funding Americas, to extend the delivery of audited financial documents until the end of April. Other stocks with high short interest include ImmunityBio and Sunnova Energy.
