The news short interest figures are out for the September 15 settlement date. Short sellers have made some key changes in the major money center banks and bulge-bracket brokers that are bank holding companies. 24/7 Wall St. has compared the short interest to the August 29 settlement date readings, and we have added color on each as to what this looks like compared to past short interest readings. All but one of the six major banks and brokers saw a drop in the short interest during the first half of September — and the one big increase was simply a reversal back to where it was before.
Several things could be a driving force here, the smallest of which is whether interest rates will start to rise in early 2015 or mid-2015. Others are the Bank of America settlement, a trend of other banks to cleaning up their legal exposure, a Jamie Dimon cancer case and likely stable earnings coming for later in 2014 and into 2015.
Bank of America Corp. (NYSE: BAC) short sellers were getting out of the way of the major legal settlement and coming higher dividend in a hurry. The short interest fell to 93.9 million shares — a drop of more than 16% from the 112 million shares short as of August 29. This has less than 1.13 days to cover and it was the lowest short interest since the end of May.
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Citigroup Inc. (NYSE: C) saw its short interest drop roughly 10% to 38 million shares as of September 15 from 42.27 million shares as of August 29. Frankly, the short interest has been gyrating and hasn’t been out of whack in either direction in several months.
Goldman Sachs Group Inc. (NYSE: GS) saw a significant rise in its short interest, up to 8.595 million shares as of September 15 from 7.692 million shares as of August 29. This looks big at over an 11% increase in the short interest, but it is barely above the mid-August level of 8.473 million shares short in mid-August.
JPMorgan Chase & Co. (NYSE: JPM) saw more than just a downtick in the short interest this time. The September 15 short interest fell to 32.38 million shares from the 38.38 million shares as of August 29. This is actually the lowest short interest of 2014.
Wells Fargo & Co. (NYSE: WFC) saw a major drop in its short interest, down to 27.091 million shares as of September 15. This was down almost 16% from the 32.566 million shares short as of August 29. It was also the lowest short interest of 2014.
Morgan Stanley (NYSE: MS) saw its short interest fall to 17.086 million shares as of September 15 from 18.033 million as of August 29. This was the lowest short interest since May 30.
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