As market indices reached new highs, retail investors saw buying opportunities in MayTD Ameritrade’s ‘behavior-based’ measurement of investor sentiment reveals real time positions and movement. Visit amtd.com
June 04, 2018 — OMAHA, Neb.–(BUSINESS WIRE)–In May, the Investor Movement Index® rose for the first time in five months, increasing to 5.06, TD Ameritrade, Inc.1 announced today. The Investor Movement Index, or the IMXSM, is a proprietary, behavior-based index created by TD Ameritrade that aggregates Main Street investor positions and activity to measure what investors actually were doing and how they were positioned in the markets.
The May 2018 Investor Movement Index for the four weeks ending May 25, 2018 reveals:
Reading: 5.06 (compared to 4.79 in April)
Trend direction: Positive
Trend length: 1 month
Score relative to historic ranges: Moderately Low
As market volatility settled in May, TD Ameritrade clients dialed-up their overall equity exposure. Net buying activity, including buying in equities with higher relative volatility, pushed the IMX slightly higher for the second time this year.
Clients take on more exposure
“For the first time this year we saw clients taking on more exposure to the market, with millennials increasing their exposure at a faster rate than the rest of our client base,” said JJ Kinahan, chief market strategist at TD Ameritrade. “As market levels stablilized following an early May rally, clients were mostly net buyers the last two weeks of the month.”
TD Ameritrade clients were net buyers during the May IMX period. Top buys include:
- AT&T Inc. (T), after reaching a 52-week low during the period
- Sprint Corporation (S), following news of a proposed merger with T-Mobile US, Inc. (TMUS)
- Snap Inc. (SNAP), which traded lower after an earnings miss and analyst downgrade
- General Electric Company (GE), after announcing it would merge its transportation unit with Westinghouse Air Brake
- Technologies Corporation (WAB)
- The Walt Disney Company (DIS), which experienced volatility after Comcast Corporation (CMCSA) announced it is considering and preparing an offer for certain assets of Twenty-First Century Fox, Inc.(FOXA) that Walt Disney has agreed to buy
- iQIYI Inc. (IQ), as the Chinese video game streaming company announced its first offline on-demand movie theatre
Despite being net buyers, TD Ameritrade clients found equities to sell during the period, including:
- Apple Inc. (AAPL), which reached an all-time high after the company announced a $100 billion share buyback
- Facebook, Inc. (FB), which increased after reaching yearly lows in March
- Valeant Pharmaceuticals International, Inc. (VRX), following better-than-expected earnings
- Frontier Communications Corporation (FTR), which was net sold for a second month after the stock traded higher early in the period
- Macy’s Inc. (M), which reached a 52-week high after reporting better-than-expected sales to international tourists
Strong Earnings Season
Major market indices moved higher at the start of the May period in part due to a strong earnings season. While a stronger U.S. dollar and geopolitical fears pushed the Russell 2000 (RUT) index to its highest level ever, the Cboe Volatility Index (VIX) traded in the low teens. The yield on the 10-year Treasury note also reached multiyear highs, and oil prices rose above $70 per barrel for the first time since 2014. However, the Dow closed lower at the end of May following newly imposed U.S. tariffs, which sparked geopolitical tensions and fears of political uncertainty.
“The Fed is expected to raise rates at its June meeting, and investors will want to hear what they have to say about expectations for future rate hikes,” said Kinahan.
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 May 2018; 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.