CME Group heads into September with a notable divergence: the stock is up 3.3% on the week while most of its closest peers are in the red, and the short retreat documented last week has continued without pause.
Short interest has now fallen another 1% from Monday's open, settling at roughly 1.43% of the free float — the lowest level in six weeks. The week-on-week decline is 13.5%, extending the unwind that began in late August when shorts were exiting at their fastest pace in months. With availability effectively unlimited and cost to borrow at just 0.38% — down 22% over the week — there is no mechanical pressure forcing these covers. Bears are leaving voluntarily. Options positioning is similarly muted: the put/call ratio edged up to 1.02 on Tuesday, fractionally above its 20-day average of 1.01, putting the z-score near zero. That is about as neutral as options sentiment gets, with no meaningful lean toward protection or speculation. The borrow and options picture combined reads as quiet — not complacent, just uncontested.
The Street, however, is less settled. The consensus sits at hold, with three buys against five holds and no sells — but the most recent action cut against the grain. Deutsche Bank's Brian Bedell downgraded CME to Hold from Buy on August 19, trimming his target to $270 from $286, even as the stock was already recovering from its July lows. That downgrade now looks mistimed: the stock has since pushed to $286.45, essentially reclaiming the old target. Elsewhere, the analyst picture after Q2 results was a split verdict. Morgan Stanley lifted its Overweight target to $330, the high-water mark on the Street. JPMorgan and BofA both maintained negative ratings but nudged targets slightly higher — they see the business improving but not enough to change their bearish stance. The mean price target of $283 is now fractionally below spot, which is an unusual position for a hold-rated stock and reflects the target compression that followed the July earnings beat. The bull case centres on the 8.1% revenue growth and CME's 14-year dividend streak. Bears focus on the rate-cutting cycle headwind to interest rate futures volume, plus competitive pressure from FMX. CME trades at a P/E of around 22x and EV/EBITDA of 19.5x — the P/E has expanded roughly 1.1 turns over the past month as the stock has outrun target revisions.
The peer divergence is worth noting. ICE fell 1.3% on the week and NDAQ dropped 1.2%. CBOE managed a 2.5% day on Tuesday but is still slightly negative for the week. TW gave back nearly 1%. CME's 3.3% weekly gain is not a sector rotation story — the whole exchange complex is soft. It looks more like continued relief buying after the post-earnings jump in late July, when the stock moved 7% in a day and nearly 12% over the following five sessions. That was a historically strong reaction for CME, and the current drift higher is building on it rather than reversing it.
The ORTEX short score is a steady 29.5, in the low-to-moderate range and barely changed over the past two weeks. That consistency matters: the short score incorporates SI level, cost to borrow, and availability, and the flatness of the reading confirms that nothing structural has shifted in the borrow market — it has simply become progressively less interesting to short. The factor picture supports that read: the short score ranks in the 76th percentile by sector, but that is a function of how low the absolute short interest is rather than any elevation in bearish activity. Days-to-cover ranks in the 67th percentile.
The next catalyst is Q3 earnings, scheduled for October 21. Given the pattern from July — a 7% single-day move on results that beat consensus — what to watch is whether the interest rate futures volume story holds up as the Fed's rate path becomes clearer through September and October, and whether the Deutsche Bank downgrade draws company or if the remaining holds begin to move.
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