Clients increased equity exposure during busy earnings season
OMAHA, Neb., November 11, 2016 /BUSINESS WIRE/ — TD Ameritrade, Inc., a broker-dealer subsidiary of TD Ameritrade Holding Corporation (Nasdaq: AMTD), today releases the Investor Movement Index® reading for October 2016.
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 are actually doing and how they are positioned in the markets.
The October 2016 Investor Movement Index for the four weeks ending October 28, 2016, reveals:
- Reading: 5.83 (compared to 5.49 in September)
- Trend direction: Positive
- Trend length: 3 months
- Score relative to historic ranges: High
The IMX rose 6.19 percent to 5.83 in October as retail investors increased their equity exposure for a third straight month. A decline in overall market volatility, coupled with net buying, drove the IMX to its highest level in two years.
“The IMX gives us a view of portfolio volatility relative to overall market volatility, so while the volatility of some of the widely held positions in TD Ameritrade client accounts decreased slightly, the overall market’s volatility decreased more, driving the IMX to a high point. Although actual volatility declined, markets seemed to be anticipating more volatility in the future, which was indicated by a rise in the CBOE Volatility Index (VIX),” said Nicole Sherrod, managing director of trading for TD Ameritrade.
“The IMX shows our clients haven’t gotten spooked. With the run up to the presidential election and more uncertainty around the Fed’s key rate, peppered with corporate earnings throughout the month, clients fluidly rotated their portfolios to have more equity exposure.”
The major market indices all saw declines during the October IMX period, with the S&P 500 and NASDAQ Composite both declining around 2 percent. The Dow Jones Industrial Average ended the period 0.80 percent lower than where it began.
Amazon.com Inc. (AMZN), which saw declines late in the period following their earnings announcement, was a net buy in October. The online retailer set a new all-time high early in October, but did not hit earnings estimates when it announced its quarterly results later in the month.
Continuing a trend from last month, dividend payers Verizon Communications (VZ) and AT&T Inc. (T) were net buys, but this month also saw net buying in Ford Motor Co. (F) and General Electric Co. (GE). Each of these stocks saw their yields rise in October as their share prices declined. Facebook Inc. (FB), which set another all-time high early in October, remained a popular net buy as well.
Popular names in the financial sector, Citigroup Inc. (C) and Bank of America Corp. (BAC), both saw gains during October and were net sold by TD Ameritrade clients. Netflix.com Inc. (NFLX), which was up dramatically following a favorable earnings report, was net sold as well. Southwest Airlines Co. (LUV) saw gains prior to its earnings release near the end of the October IMX period and was net sold. Caterpillar Inc. (CAT), which reached a year-to-date high in October, was net sold as well.
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 6 million funded accounts that 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 December 2010, to view the full report from October 2016, 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
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