Clients net sold equities but remained strong buyers of fixed income instruments during the period

The Investor Movement Index^® (IMX℠) decreased to 5.86 in May, down from 6.33 in April. 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 May 27, 2022 ranks “Moderate” compared to historic averages.

“IMX periods that fall during an earnings cycle typically see elevated activity as investors digest updated information from companies reporting results and offering guidance on future expectations. In May, though, uncertainty and cautious outlooks from reporting companies and analysts drove investors to the sidelines,” according to Shawn Cruz, head trading strategist, TD Ameritrade. “For the first time since December ‘21, TD Ameritrade clients were net sellers of equities in May.”

May was another month of elevated market volatility. The S&P 500 traded in just under a 500 point range from its high of 4307.66 on May 4th to 3810.32 on May 23rd, a new low for this year and a brief dip into Bear Market territory. Remarkably, the benchmark finished nearly unchanged month over month as it saw its best week since November 2020 during the last full trading week of the period. Although inflation concerns continued to underscore the tone of the markets, the 10-year Treasury yield moved slightly lower to 2.844% from 2.887% after making new year-to-date highs at 3.167% on May 9th. Despite the stagnant move in yields and growing economic concerns, the Financial sector was able to notch a 2.57% gain for the month. This was dwarfed, however, by the nearly 15% gain posted by the Energy sector, the strongest performing sector in May. Both the Consumer Staples and Consumer Discretionary sectors struggled, down 4.73% and 4.91% respectively, as disappointing results from several retailers including Walmart (WMT) and Target (TGT) sparked selling in retail names. Real estate, however, was down 5.13%, making it the month’s worst-performing sector.

TD Ameritrade clients were net sellers of equities in May, but were once again strong buyers of fixed income instruments. Some of the popular equity names bought in May were:

• Apple Inc. (AAPL)
• Amazon.com Inc. (AMZN)
• NVIDIA Corporation (NVDA)
• Advanced Micro Devices Inc. (AMD)
• Walt Disney Company (DIS)

Names sold during the period included:

• Exxon Mobil Corp. (XOM)
• Walmart Inc. (WMT)
• American Airlines Group Inc. (AAL)
• Visa Inc. (V)
• Merck & Co. Inc. (MRK)

Millennial Buys & Sells

Like the overall client population, TD Ameritrade Millennial clients reduced exposure during the May period, and were net sellers of equities overall. Both TD Ameritrade Millennial clients and the overall TD Ameritrade client population favored Tesla (TSLA) and Amazon (AMZN), as Consumer Discretionary names were under pressure. Nvidia (NVDA) was rewarded after a quarterly earnings report that beat expectations despite giving a cautious outlook; both TD Ameritrade Millennial clients and the overall TD Ameritrade client population were net buyers of the semiconductor giant. Both TD Ameritrade Millennial clients and the overall TD Ameritrade population were net sellers of American Airlines (AAL), Delta Airlines (DAL), and United Airlines (UAL) as inflation continued to cloud the economic picture. In addition to the airlines, TD Ameritrade Millennial clients also sold travel related names Airbnb (ABNB) and Royal Caribbean Cruises (RCL). TD Ameritrade Millennial clients were net buyers in four of the S&P sectors: Communication Services, Consumer Discretionary, Consumer Staples, and Financials.

Of the most popular names net bought in May, Millennials differed from the general client population in buying Palantir Technologies Inc. (PLTR). Of the most popular names net sold, Millennials stood apart in selling Airbnb Inc. (ABNB) and Royal Caribbean Cruises Ltd. (RCL).

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 May 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.amtd.com.

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