Clients were net sellers of equities overall, with net buying only in the Communication Services, Consumer Discretionary, Real Estate and Utilities Sectors

The Investor Movement Index^® (IMX^SM) decreased to 4.25 in October, down from 4.47 in September. 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 four-week period ending October 28, 2022 ranks “low” compared to historic averages.

“For the second time this year, we’ve seen TD Ameritrade clients return to net selling, this time pushing the IMX score to a year-low,” said Shawn Cruz, head trading strategist, TD Ameritrade. “We saw the strongest selling in the Information Technology sector, which was up 9% during the period. But generally speaking, it appears clients are continuing to exercise caution and limiting their exposure given the uncertainties surrounding the possibility of a recession and persistent inflation.”

The October IMX period was marked by both macroeconomic catalysts and the first few weeks of the latest quarterly earnings season. The Bureau of Labor Statistics’ Employment Situation report at the beginning of the month showed a jobs market that remains stubbornly resilient, raising concerns that the Federal Reserve would continue on its path of monetary tightening. On the morning of October 13th, the Consumer Price Index (CPI) was released and equity markets immediately plunged to a new year-to-date (YTD) low in response to the hotter-than-expected inflation reading. However, in what proved to be the pivotal session of the October period, the S&P 500 recovered to close the session over 178 points off its intraday low.

The equity markets built on the strength of the strong reversal throughout the remainder of the period, weathering disappointing earnings results from several of the market’s biggest “mega-cap” tech firms. The Dow Jones Industrial Average gained nearly 15% during the October period, its strongest month in decades. The CBOE Market Volatility Index (VIX) eased back during October to close at its lows of the period, 25.75, possibly indicating that market uncertainty has started to dissipate. U.S. Treasury markets continued to be a major source of headlines during the October period as 10-year yields raced to over 4.3% before closing the period at just over 4%. Elevated volatility sustained in currency markets, but the U.S. dollar weakened slightly, as measured by the U.S. Dollar Index, during the October period. Energy markets also continued to raise concerns as Crude Oil futures climbed over 10% in October.

Despite being net sellers of equities overall, TD Ameritrade clients did find 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 Buys & Sells

TD Ameritrade Millennial clients reduced exposure during the September period, but they were net buyers of equities, differing from the overall TD Ameritrade client population.

Both TD Ameritrade Millennial clients and the overall TD Ameritrade client population favored semiconductor giant Intel (INTC) as the stock had underperformed the broader market for much of the period until releasing its earnings, which topped estimates. Both TD Ameritrade Millennial clients and the overall TD Ameritrade client population also bought Advanced Micro Devices (AMD) as the chips subsector continued its recent run of underperformance. Meta Platforms (META), parent company of Facebook and Instagram, took a nosedive after a quarterly earnings report that showed significant capital expenditures and declining revenue; Millennials at TD Ameritrade apparently saw this as an opportunity to buy into weakness in the social media company.

Netflix (NFLX) was a name sold by both populations amidst recent outperformance, as an earnings release that showed a return to subscriber growth bolstered optimism and sent the stock soaring over 25% higher during the period. TD Ameritrade Millennial clients were net sellers of Bed Bath and Beyond (BBBY) as the “meme” stock continued to decline, losing almost 25% as trading interest waned. Despite being net buyers of equities overall, like the general client population, TD Ameritrade Millennial clients were only net buyers of four S&P sectors: Communication Services, Consumer Discretionary, Real Estate, and Utilities.

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 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 October 2022, 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

TD Ameritrade provides investing services and education to self-directed investors and registered investment advisors. A leader in U.S. retail trading, we leverage the latest in cutting edge technologies and one-on-one client care to help our clients stay on top of market trends. Learn more by visiting www.tdameritrade.com.

Brokerage services provided by TD Ameritrade, Inc., member FINRA (www.FINRA.org) / SIPC (www.SIPC.org), a subsidiary of The Charles Schwab Corporation. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2022 Charles Schwab & Co. Inc. All rights reserved.

Source: TD Ameritrade, Inc.

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