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Short sellers scale back bets against consumer discretionary stocks

Yahoo Finance Live's Alexandra Semenova and Jared Blikre discuss consumer discretionary stocks.

Video Transcript

BRIAN SOZZI: OK, short sellers have been making power moves during the market downturn. Yahoo Finance's Alexandra Semenova and Jared Blikre have been tracking this one for us. Hey, Jared. There you are. I thought you were still at the New York Stock Exchange.

JARED BLIKRE: I love to switch venues. I'm going to go upstairs. I'm going to be in the flash room pretty soon. But we are here today to talk about retail stocks. Consumer discretionary, this is a beaten down sector, but it does-- it has gotten a little bit of a lift off the ground recently, Alex.

ALEXANDRA SEMENOVA: Yeah, Jared, short sellers scaled back their bets against consumer discretionary stocks last month in a sign that the hard-hit sector may have found a bottom. That's according to new data from S&P Global Market Intelligence. Consumer discretionary was the top shorted sector during the month of April, with short interest rising steadily since November. Let's take a look at performance here.

JARED BLIKRE: Whoops. I think this thing has a mind of its own. If we could get the YFi Interactive back in this screen behind us. Will we be able to? There we go.

ALEXANDRA SEMENOVA: There we go. We're back. Here we go.

JARED BLIKRE: Let's pull up a chart here. OK, so this is the intraday price action. Not telling us much, but what time frame are you looking at?

ALEXANDRA SEMENOVA: We're looking at the one-year period here. So that uptick in short interest came starting in November. As you can see, the sector steadily falling in November from its high. So you could see that performance falling more than 30% before a slight rebound last week. Now let's take a look at the five-day period as well. You can see--

JARED BLIKRE: There's that liftoff.

ALEXANDRA SEMENOVA: There's a bit of a liftoff here. On Friday, the sector rallied 9%, leading the S&P 500 in that comeback that we saw last week, still holding some of that momentum, but still well off the highs.

JARED BLIKRE: Well off of the highs. Let's take a look at the retail sector heat map so we can get an idea of what's going on today. And it looks like Amazon down-- that's a kahuna-- down about half a percent. So is Walmart. Seeing some action from Shopify. That's up 4%. It was down 3% yesterday, but what are you noticing here?

ALEXANDRA SEMENOVA: Costco, Nike seeing some nice action here. Costco up 1%, Nike up nearly 1% as well.

JARED BLIKRE: All right, let's get a year to date look because I think we can take a look at some of the carnage that has gone on in this sector. Now, here, you see Amazon down 27 and 1/2%. You can pull up a one-year chart on this. And look at this, it kind of fell off a cliff here. You take a look at the three-year chart, and it's been going sideways. And now it's at potential, potential support, back to this 2,100 level. Anything standing out to you, Alex?

ALEXANDRA SEMENOVA: Just the continued pressure in this area of the market, of course, getting worse after we saw some of those retail reports last week that indicated companies were slashing their outlooks and are starting to feel the crunch from inflation.

JARED BLIKRE: All right, well, we're going to kick it back to you guys.

BRIAN SOZZI: All right. Good stuff, Jared Blikre, Alexander Semenova. Good stuff, indeed.