The Investor Movement Index(R) (IMX(SM)) increased to 4.35 in May, up 11.54 percent from its April score of 3.90. 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.
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The reading for the five-week period ending May 29, 2020, ranks "Low" compared to historic averages.
"In May, we started to see optimism really take hold of the markets," said JJ Kinahan, chief market strategist at TD Ameritrade. "Clients were future-focused in their equity buys, as we saw the 'optimism trade' take hold in terms of the actual or soon-to-be reopening of state economies, feeding hope of a quick recovery. Combine this with news around potential coronavirus vaccine developments, along with a slowing of cases and our clients used this news to step up their exposure to the market."
TD Ameritrade clients increased exposure to equity markets for the first time in four months during the May period as equity markets moved higher, with the S&P 500 recapturing the 3,000 mark for the first time since early March. The S&P 500 increased 7.3 percent, while the Dow Jones Industrial Average increased 6.8 percent. Technology stocks were in favor, and the Nasdaq Composite increased 9.9 percent. U.S. consumer spending fell by a record 13.6 percent during April due to COVID-19 pandemic lockdowns - in fact, retail sales were down a record 14.6 percent due to a dramatic decrease in shopping and dining out. Many were heartened by the news that U.S. companies Moderna Inc. and Pfizer Inc. announced positive testing results for a coronavirus vaccine, while the Chinese company Sinovac Biotech announced it reached stage 2 of its clinical trial.
TD Ameritrade clients were net buyers overall during the May period, and net buyers of equities. Clients preferred equities, with large buying in the health care, industrial, and energy sectors. On the other hand, they were less interested in fixed income, with the lightest buying activity seen in two years. Intraday volatility was generally lighter during the period with the Cboe Volatility Index, or VIX, which measures volatility of the S&P 500 Index, closing below 30 for the first time since February.
Some of the popular names clients bought during the period included:
Southwest Airlines (LUV) The Walt Disney Company (DIS) General Electric, Inc. (GE) Wells Fargo & Co. (WFC) Norwegian Cruise Line (NCLH)
TD Ameritrade clients found some names to net sell during the period, including:
Tesla Inc. (TSLA) Otis Worldwide Corp. (OTIS) Wayfair Inc. (W) Wabtec Inc. (WAB)
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 12 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 2020; 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(R) or thinkorswim Mobile 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 $1.2 trillion in assets, and custodial services to more than 7,000 registered investment advisors. We are a leader in U.S. retail trading, executing approximately 2 million daily average revenue trades per day for our clients, nearly one-third 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 nearly 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.
Brokerage services provided by TD Ameritrade, Inc., member FINRA (www.FINRA.org) / SIPC (www.SIPC.org)
Source: TD Ameritrade Holding Corporation
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SOURCE: TD Ameritrade Holding Corporation
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