U.S. stocks could be in for some more pain following Friday’s rout as trend-following quants unload their holdings.The selling may be particularly painful for U.S. small caps as commodity trading advisers, or CTAs, are set to “flip short” on the Russell 2000 Index by the end of the day, according to Charlie McElligott, a cross-asset strategist at Nomura Securities. As it stands, money managers that follow quantitative strategies are still 50 percent long entering Monday’s trading session, but that should vanish by the day’s end, his models show.
Usually towards the end of the business cycle, rising interest rates hurt smaller
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