Economy and AI Push Make Shorting US Stocks Dangerous, 22V Says

The commentary lands in a market that had become volatile in recent weeks as investors grew nervous about the impact of tariffs on the economy and monetary policy at the same time that spending on AI seemed to become untethered to profitability. “Being short here requires high confidence in a much weaker economic backdrop or a significant change in the outlook for AI capex,” according to strategists led by Dennis Debusschere, co-founder and chief market strategist at 22V. US equity short sellers were down $80 billion in mark-to-market losses, or roughly 4.8% in the final week of November, wiping out the bulk of what had been nearly $95 billion in month-to-date profits prior to last week, per data compiled by S3 Partners LLC.