TD Ameritrade Investor Movement Index: October IMX score lowest of year so far
OMAHA, Neb.–(BUSINESS WIRE)–The Index of Investor Movements® (IMXSM) fell to 4.25 in October from 4.47 in September. The IMX is TD Ameritrade’s proprietary behavioral-based index, aggregating Main Street investor positions and activity to measure what investors were actually doing and how they were positioning themselves in the markets.
The reading for the four-week period ending October 28, 2022 ranks “weak” compared to historical averages.
“For the second time this year, we have seen TD Ameritrade clients return to net selling, this time pushing the IMX score to its lowest level of the year,” said Shawn Cruz, chief operating strategist, TD Americatrade. “We had the strongest sales in the information technology sector, which grew by 9% during the period. But generally speaking, it seems that customers continue to be cautious and to limit their exposure given the uncertainties surrounding the possibility of a recession and persistent inflation.
The October IMX period was marked by both macro catalysts and the opening weeks of the latest quarterly earnings season. The Bureau of Labor Statistics’ jobs report earlier this month showed a labor market that remains stubbornly resilient, raising fears that the Federal Reserve will continue on the path of monetary tightening. On the morning of October 13, the Consumer Price Index (CPI) was released and stock markets immediately plunged to a new year-to-date low in response to the higher inflation reading. provided that. However, in what turned out to be the pivotal session of the October period, the S&P 500 rallied to close the session more than 178 points off its intraday low.
Stock markets built on the strength of the strong reversal throughout the period, weathering disappointing earnings results from several of the market’s largest “mega-cap” tech companies. The Dow Jones Industrial Average gained almost 15% during the October period, its strongest month in decades. The CBOE Market Volatility Index (VIX) retreated in October to close at a period low of 25.75, perhaps indicating that market uncertainty has begun to dissipate. US Treasury markets continued to be a major source of headlines during the October period, with 10-year yields rising to over 4.3% before ending the period just over 4. %. High volatility continued in the currency markets, but the US dollar weakened slightly, as measured by the US dollar index, during the October period. Energy markets also continued to cause concern, with crude oil futures climbing more than 10% in October.
Although they were net sellers of stocks overall, TD Ameritrade clients found individual names to buy during the period, including:
Tesla Inc. (TSLA)
Intel Corp. (INTC)
Advanced Micro Devices Inc. (AMD)
Amazon Inc. (AMZN)
Apple Inc. (AAPL)
Names sold during the period included:
Netflix Inc. (NFLX)
Exxon Mobil Corp. (XOM)
United Airlines Holdings Inc. (UAL)
Coinbase Global Inc. (COIN)
Gilead Sciences Inc. (GILD)
Millennial buying and selling
TD Ameritrade’s millennial clients reduced their exposure during the September period, but they were net buyers of equities, which is different from the overall TD Ameritrade client base.
Millennial TD Ameritrade customers and the general TD Ameritrade customer population favored semiconductor giant Intel (INTC) as the stock had underperformed the broader market for much of it. of the period until the publication of its profits, which exceeded estimates. TD Ameritrade’s millennial customers and the general TD Ameritrade customer population also bought Advanced Micro Devices (AMD), as the chip sub-sector continued its recent streak of underperformance. Meta Platforms (META), parent company of Facebook and Instagram, plunged after a quarterly earnings report showed heavy capital spending and falling revenue; Millennials at TD Ameritrade apparently saw this as an opportunity to buy into the social media company’s weakness.
Netflix (NFLX) was a name sold by both populations amid recent outperformance as an earnings release that showed a return to subscriber growth bolstered optimism and sent the stock soaring more than 25% at during the period. TD Ameritrade’s millennial customers were net sellers of Bed Bath and Beyond (BBBY) as the “meme” stock continued to slide, losing nearly 25% as commercial interest waned. Although they were net buyers of equities overall, like general clients, TD Ameritrade’s millennial clients were net buyers of only four S&P sectors: communication services , consumer discretionary, real estate and utilities.
The IMX value is calculated based on a complex proprietary formula. Each month, TD Ameritrade pulls a sample of its funded account customer base, which includes all accounts that have transacted in the previous month. The holdings and positions of this statistically significant sample are evaluated to calculate the individual scores, and the median of these scores represents the monthly IMX.
For more information on the Investor Movement Index, including historical IMX data dating back to January 2010; to view the full October 2022 report or to sign up for future IMX news alerts, please visit www.tdameritrade.com/IMX. Additionally, TD Ameritrade clients can plot IMX using the symbol $IMX in the thinkorswim® or thinkorswim mobile platforms.
The inclusion of specific security names in this commentary does not constitute a buy, sell or hold recommendation by TD Ameritrade. All investments involve risk, including possible loss of principal. Please consider all risks and objectives before investing.
Past performance of a security, strategy or index does not guarantee 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 financial situation and objectives 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 trading volume or financial performance of clients for TD Ameritrade.
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Source: TD Ameritrade, Inc.