Cautious investors increased exposure to equity markets in OctoberNew market research from TD Ameritrade Investor Movement Index
November 04, 2019 — OMAHA, Neb.–(BUSINESS WIRE)–The Investor Movement Index® (IMXSM) increased to 4.84 in October, up 7.3 percent from its September score. The IMX is TD Ameritrade’s proprietary, behavior-based index, aggregating Main Street investor positions and activity to measure what investors actually were doing and how they were positioned in the markets.
The IMX reached its second-highest reading this year, with May the highest at 4.93, yet the reading still ranks “Moderately Low” compared to historic averages. The four-week period ending Oct. 25, 2019 continued a year-long trend of below-average IMX scores.
Equities Up, Tempered with Fixed Income
“October earnings went better than many anticipated, but there was some cautiousness as SPX stalled under 3,000 for the sixth continuous month,” said JJ Kinahan, chief market strategist at TD Ameritrade. “While investors did increase exposure to equities month-over-month, they continued to show caution with a strong presence in fixed income, and will likely remain guarded as long as the trade war continues to loom over the markets.”
Equity markets moved higher during October IMX period. The S&P 500 was up 2 percent compared to September, with the Dow Jones Industrial Average up 0.5 percent. The technology sector outpaced the relative market, with the Nasdaq Composite up 3.8 percent during the October period. Early in the period, market volatility increased as macroeconomic worries intensified following poor manufacturing data. The jobless rate also fell to the 50-year low of 3.5 percent. By the end of the period, 40 percent of the S&P 500 had reported earnings, with 80 percent beating analyst estimates.
Retail investors at TD Ameritrade found some popular names to buy during the October IMX period, including:
- Amazon Inc. (AMZN)
- Walt Disney Co. (DIS)
- AT&T Inc. (T)
- Microsoft Corp. (MSFT)
TD Ameritrade clients continued to be net sellers of equities in October, net selling popular names such as:
- Apple Inc. (AAPL)
- Tesla Inc. (TSLA)
- Facebook Inc. (FB)
- Netflix Inc. (NFLX)
Millennial Buys & Sells
In October, there were some key differences in the stocks TD Ameritrade’s millennial clients net bought. Millennials net bought Aurora Cannabis Inc. (ACB), Altria Group Inc. (MO) and Starbucks Corp. (SBUX), while the total client population did not.
On the sell side, unlike the total client population, millennials net sold Alphabet Inc. (GOOG) and Rite Aid Corp. (RAD).
About the IMX
The IMX value is calculated based on a complex proprietary formula. Each month, TD Ameritrade pulls a sample from its client base of more than 11 million funded accounts, which includes all accounts that completed a trade in the past month. The holdings and positions of this statistically significant sample are evaluated to calculate individual scores, and the median of those scores represents the monthly IMX.
For more information on the Investor Movement Index, including historical IMX data going back to January 2010; to view the full report from September 2019; or to sign up for future IMX news alerts, please visit www.tdameritrade.com/IMX. Additionally, TD Ameritrade clients can chart the IMX using the symbol $IMX in either the thinkorswim® or TD Ameritrade Mobile Trader platforms.
Inclusion of specific security names in this commentary does not constitute a recommendation from TD Ameritrade to buy, sell, or hold. All investments involve risk including the possible loss of principal. Please consider all risks and objectives before investing.
Past performance of a security, strategy, or index is no guarantee of future results or investment success.
Historical data should not be used alone when making investment decisions. Please consult other sources of information and consider your individual financial position and goals before making an independent investment decision.
The IMX is not a tradable index. The IMX should not be used as an indicator or predictor of future client trading volume or financial performance for TD Ameritrade.
About TD Ameritrade Holding Corporation
TD Ameritrade provides investing services and education to approximately 12 million client accounts totaling approximately $1.3 trillion in assets, and custodial services to more than 7,000 registered investment advisors. We are a leader in U.S. retail trading, executing an average of approximately 800,000 trades per day for our clients, more than a quarter of which come from mobile devices. We have a proud history of innovation, dating back to our start in 1975, and today our team of 10,000-strong is committed to carrying it forward. Together, we are leveraging the latest in cutting edge technologies and one-on-one client care to transform lives, and investing, for the better. Learn more by visiting TD Ameritrade’s newsroom at www.amtd.com, or read our stories at Fresh Accounts.
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