Retail investors were net buyers in June and for the first half of the year
July 09, 2018 — OMAHA, Neb.–(BUSINESS WIRE)–In June 2018, the Investor Movement Index® rose to 5.45 as retail investors gradually increased their equity exposure throughout the first six months of 2018, 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 June 2018 Investor Movement Index for the four weeks ended June 29, 2018 reveals:
Reading: 5.45 (compared to 5.06 in May)
Trend direction: Positive
Trend length: 2 month
Score relative to historic ranges: Moderately Low
U.S. markets ended June on a positive note with the Nasdaq Composite increasing a percent and the Russell 2000 reaching all-time highs. TD Ameritrade clients appeared to use volatility during the month as a reason to increase their overall equity exposure. As a result, investors’ net buying activity prompted the June IMX reading to jump more than seven percent from the prior month.
TD Ameritrade clients were net buyers during the June IMX period. Top buys included:
- AT&T Inc. (T), after receiving approval for its acquisition of Time Warner Inc.
- iQIYI, Inc. (IQ) and Micron Technology, Inc. (MU), following reports of proposed rules that would limit Chinese investments in certain U.S. tech firms
- Netflix, Inc. (NFLX), after its stock price reached an all-time-high
- salesforce.com, inc. (CRM), following an analyst upgrade and the announcement of new innovations to deliver a more personalized customer experience
Despite being net buyers, TD Ameritrade clients found equities to sell during the period, including:
- Chesapeake Energy Corporation (CHK) and Exxon Mobil Corporation (XOM), which both traded higher on the back of a three-and-a-half year high in crude oil prices
- General Motors Company (GM), following the announcement that SoftBank Vision Fund committed to invest over $2 billion into GM’s autonomous driving program
- Facebook, Inc. (FB), for the fifth month in a row after the stock reached an all-time high during the period
- Chip-maker Advanced Micro Devices, Inc. (AMD), after reaching a 52-week high early in the period
As July progresses, retail investors will likely remain focused on trade tensions between the U.S. and key global trading partners. The large concern appears to be over how trade will impact economic growth. Earnings season will also begin with big banks reporting their earnings in mid-July, with investors most likely looking at company performance and CEO statements.
2018 Mid-Year Review
Despite optimism surrounding the financial sector at the start of 2018, the first half of the year proved to be more challenging than expected. A flattening yield curve, slower global growth, and tensions between the U.S. and key trading partners created pressures that injected more volatility into the markets. In early 2018, the equity market saw its first market correction in over two years.
After ending 2017 at all-time highs, the IMX recorded its largest monthly decrease ever in February – more than 20 percent – after the markets entered correction territory. The market selloff led TD Ameritrade to record its highest trading day of the year on February 5. On that date, the S&P 500 was down 4.1 percent and the Nasdaq was down 3.8 percent.
“TD Ameritrade clients reduced their overall exposure to equity markets the first four months of the year, but started to dial-up exposure once again in May and June,” said JJ Kinahan, chief market strategist at TD Ameritrade. “This gives us a sense that although the market has been back-and-forth, clients may be feeling better heading into the end of the year and may continue to increase exposure in a very measured fashion.”
TD Ameritrade clients were net buyers in the first half of 2018, increasing their equity positions during that period.
The top five popular buys for the first half of 2018 were:
- Amazon.com, Inc. (AMZN)
- AT&T Inc. (T)
- Netflix, Inc. (NFLX)
- Micron Technology, Inc. (MU)
- General Electric Company (GE)
The top five popular sells for the first half of 2018 were:
- Facebook, Inc. (FB)
- Apple Inc. (AAPL)
- Chipotle Mexican Grill, Inc. (CMG)
- ConocoPhillips (COP)
- Advanced Micro Devices, Inc. (AMD)
The five most widely held stocks for the first half of 2018 were:
- Apple Inc. (AAPL)
- General Electric Company (GE)
- AT&T Inc. (T)
- Microsoft Corporation (MSFT)
- Ford Motor Company (F)
“Based on the first six months of the year, it would be hard to believe that volatility wouldn’t stay elevated as compared to 2017,” said Kinahan. “Interest rates remain a large question mark as tariff talks have become a big factor in the markets over the last few months, the 10-year yield is still not above three percent like many anticipated, and midterm elections are coming up this fall.”
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 June 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.
Inclusion of specific security names in this commentary does not constitute a recommendation from TD Ameritrade to buy, sell, or hold.
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.
For the latest TD Ameritrade news and information, follow the company on Twitter, @TDAmeritradePR.
Source: TD Ameritrade Holding Corporation
About TD Ameritrade Holding Corporation
TD Ameritrade provides investing services and education to more than 11 million client accounts totaling approximately $1.2 trillion in assets, and custodial services to more than 6,000 registered investment advisors. We are a leader in U.S. retail trading, executing an average of more than 940,000 trades per day for our clients, nearly 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.
1TD Ameritrade, Inc. is a broker-dealer subsidiary of TD Ameritrade Holding Corporation (Nasdaq: AMTD). Brokerage services provided by TD Ameritrade, Inc., member FINRA (www.FINRA.org)/SIPC (www.SIPC.org).