Despite reduced exposure, clients were net buyers of equities overall

The Investor Movement Index^® (IMX^SM) decreased to 5.10 in June, down from 5.86 in May. 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 June 24, 2022 ranks “Moderate Low” compared to historic averages.

“Several market catalysts on the macroeconomic front led to elevated activity in June as TD Ameritrade clients assessed the investing landscape,” according to Shawn Cruz, head trading strategist, TD Ameritrade. “While they reduced investment exposure, buying interest in nine S&P sectors and in particular Consumer Discretionary and Financials, led them to be overall net buyers once again during the period.”

Once again, the June IMX period was one of elevated volatility. The S&P 500 traded in a massive range during the period, stretching over 540 points from high to low and hitting a new year-to-date low of 3636.87—the benchmark’s lowest level since December 2020—on June 17. Sentiment, however, shifted back to risk-on in the final trading week of the period as the index bounced over 7.5% off the lows to finish at 3911.74. Inflation concerns continued to dominate the macro market narrative and fears of economic recession increased steadily throughout the period. The 10-year Treasury yield spiked higher from 2.743% to 3.497% before easing back and settling at 3.134% to close out the period. The volatility in interest rates was driven primarily by an unexpectedly high inflation print in the May Consumer Price Index (CPI) report that showed consumer prices increased by 8.6% year over year, a 41-year high. After the inflation data came in above consensus forecasts, the Federal Reserve increased the federal funds rate by 75bps to 1.5%-1.75%, during its June Federal Open Market Committee (FOMC) meeting. During the June IMX period, every S&P 500 sector was lower, but the Energy sector was the worst performing sector, sliding 18.24%, largely due to a near 7% decline in crude oil.

After being sellers of equities in May, the pullback to levels not seen since early 2021 brought buyers back into the market. The buying was focused in some of the names that had lower volatility relative to the rest of the equities market. Some of the popular equity names bought in June were:

• Apple Inc. (AAPL)
• Microsoft Corp. (MSFT)
• Amazon.com Inc. (AMZN)
• Intel Corp. (INTC)
• Walt Disney Co. (DIS)

Names sold during the period included:

• Nio Inc. (NIO)
• Li Auto Inc. (LI)
• Alibaba Group Holding Ltd. (BABA)
• Exxon Mobil Corp. (XOM)
• FedEx Corp. (FDX)

Millennial Buys & Sells

TD Ameritrade Millennial clients reduced exposure during the June period, but like the general population, they were net buyers of equities overall. Both TD Ameritrade Millennial clients and the overall TD Ameritrade client population favored Apple (AAPL) and Microsoft (MSFT), net buying the Information technology giants as in previous months. Amazon (AMZN) was another name both populations favored as the Consumer Discretionary giant saw interest in its stock increase after its first split since 1999. Recession and inflation fears led to underperformance in many retail names, and TD Ameritrade Millennial clients apparently saw opportunity in that weakness, differing from the overall TD Ameritrade client population and net buying Target (TGT).

Like the overall TD Ameritrade client population, TD Ameritrade Millennial clients were net sellers of Chinese Electric Vehicle Makers, Nio (NIO) and Li Auto (LI) after sentiment surrounding investment in Chinese companies appeared to steady. Both populations also appeared to use recent strength in Alibaba (BABA) as an opportunity to reduce exposure in the Chinese Consumer Discretionary company. TD Ameritrade Millennial clients differed from the overall client population by selling GameStop (GME) amid volatility in the “meme stock” during the period. In June, TD Ameritrade Millennial clients were net sellers of only two S&P sectors: Energy 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 June 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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