The AI selloff isn't in jobs or credit, and hedge funds have stopped betting against the Nasdaq

Our read: the AI selloff isn't showing up in jobs or credit, and hedge funds have already stopped betting against the Nasdaq.

Leveraged funds' net Nasdaq-100 futures position went from its most negative since 2015 in August to about flat now (our calc, CFTC data).

What it means for a regular investor: a sharp drop can come from positioning and nerves without the economy weakening. So far, the job and credit data don't show cracks.

• Hedge funds and other leveraged funds: net short 89,125 Nasdaq-100 mini futures on Aug 11, net long 950 on Oct 20. That's about flat, at +0.3% of open contracts.
• Jobs: the 4-week average of new jobless claims is 197,750, the lowest since October 2022.
• Credit: the Chicago Fed's credit-conditions gauge is at -0.03, slightly looser than average (above 0 means tighter than average).

What would prove us wrong

Set before publication. We report back in public when one trips.

• the Chicago Fed credit gauge rises above 0, or the 4-week jobless claims average climbs more than 15% above its low. Open · next check: Chicago Fed credit gauge, weekly (Wednesdays)

Method and sources

Figures marked "our calc" are our own arithmetic on the cited primary sources (company filings, earnings releases, public datasets). Every figure was checked against its source before publication.

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General research, the same for every reader. Not investment advice.