The U.S. stock market rallied in 2023 despite the Federal Reserve’s aggressive stance and concerns regarding an impending recession and growing geopolitical tensions. The tech-focused Nasdaq Composite index surged by over 43% in fiscal 2023, marking its best year since 2020. The broader S&P 500 index rose 24.2% last year, while the Dow Jones Industrial Average gained nearly 14%. The Canadian S&P/TSX Exchange rose by nearly 8% last year.
The U.S. and Canadian equity markets’ stellar performance, despite all odds, proved to be highly unprofitable for short sellers, who were betting on stocks to fall. According to S3 Partners Research, short sellers faced an “exceedingly difficult year” in 2023, losing approximately $194.9 billion. Bearish traders had a total short position of $957 billion in 2023, according to S3 Partners.
Banking Crisis
The U.S. regional banking crisis in early 2023, triggered by the collapse of Silicon Valley Bank, was…
