TD Ameritrade clients were net buyers overall in a period of sustained market volatility
The Investor Movement Index® (IMXSM) decreased to 3.90 in April, down 6.25 percent from its March score of 4.16. 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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TD Ameritrade April 2020 Investor Movement Index (Graphic: TD Ameritrade)
The reading for the four-week period ending April 30, 2020, ranks "Low" compared to historic averages.
"Although our clients lowered exposure overall, the stocks they did buy reflected where they believe consumer demand will return, although many of them may not be short term plays," said JJ Kinahan, chief market strategist at TD Ameritrade. "In April, clients increasingly took the long view with heavy buys in the Consumer Discretionary and Industrial sectors."
The COVID-19 pandemic continued to influence equity markets during the April IMX period, which rebounded after large losses in March. During the period, the S&P 500 increased 11.6 percent, with the Dow Jones Industrial Average up 9.9 percent. The Nasdaq Composite posted the best gains, increasing 15.1 percent. Volatility remained high, with the S&P 500 moving in excess of plus or minus one percent during 16 of the 19 market days during the period. Early in the month, the Dow industrials posted a daily gain of 1,600 points as investors looked to early signs that stay-at-home orders in the U.S. and Europe were helping to slow the coronavirus pandemic. Still, unemployment reached historic levels, with total new claims to over 20 million during a one-month period, and weak demand for oil meant crude oil futures entered negative territory. By month’s end, congressional leaders and the White House reached another economic stimulus package offering nearly $480 billion in aid for small businesses, hospitals and additional testing for the coronavirus.
TD Ameritrade clients were net buyers overall for the second month in a row in April. They net bought equities, but as volatility among widely held names decreased during the period, they reduced their market exposure. The Cboe Volatility Index, or VIX, which measures volatility of the S&P 500 Index, remained elevated compared to historical levels, but decreased over 45 percent during the period.
Some of the popular names bought by clients during the period included:
- Delta Airlines Inc. (DAL)
- Carnival Corp. (CCL)
- Boeing Inc. (BA)
- Bank of America Corp. (BAC)
Selling was light in April and mostly occurred on rebounds. Names that were net sold during the period included:
- Otis Worldwide Corp. (OTIS)
- Wabtec Corp. (WAB)
- Tencent Holdings Limited (TCEHY)
- Carrier Global Corp. (CARR)
Millennial Buys & Sells
The Millennial IMX also decreased in April to 3.98, slightly higher than the general IMX. During this period, unique millennial buys included Apple Inc. (AAPL) and MGM Resorts International (MGM).
In April, millennials mirrored the general IMX with light selling. Among the top names they did sell were Chesapeake Energy Corp. (CHK) and Blue Apron Holdings (APRN).
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 April 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® 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.
Source: TD Ameritrade Holding Corporation
Sr. Manager, Corporate Communications
Managing Director, Investor Relations