Hungry "short sellers" have zeroed in on the upcoming U.S. elections, expecting a rise in the minimum wage which will erode corporate profits, according to a new report by analysis firm Markit.
These short sellers - traders who bet that a particular security will fall in price - seem to be taking particular notice of the comments coming from presumptive Republican nominee Donald Trump, as well as Democrat nominees Hillary Clinton and Bernie Sanders.
"Wages have played a key role in rhetoric around the current U.S. election, encouraging sellers to position themselves to profit from a rise in wages," the report, released on Thursday, said.
Analyst Simon Colvin calculates that shorting among U.S. firms with the worst net income to employee ratio is now 63 percent higher than average. Added to this, low net income to employee firms have underperformed the market by 15 percent since January 2015 and have historically delivered poor returns, he added. Markit use the amount of shares outstanding on loan as a proxy for short selling.