Clients were net buyers of equities during the September IMX period, with buying interest strongest in the Industrials, Consumer Staples, and Health Care sectors

The Investor Movement Index^® (IMX^SM) decreased to 5.64 in September, down from its score of 5.70 in August. 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 September 29, 2023 ranks “moderate low” compared to historic averages.

“September can be a brutal month for the markets, and although in some ways this one was no different, our clients still found opportunities to balance their overall exposure by rotating their sector-weighted holdings,” said Joe Mazzola, Director of Trading and Education at Charles Schwab. “The IMX score did dip slightly as our clients reduced exposure to sectors that tend to get hit when wallets tighten, such as Consumer Discretionary and Energy. But ultimately, clients were net buyers of equities last month as they increased exposure in the Industrial, Consumer Staples, and Health Care sectors.”

Bond yields rose to their highest levels in nearly two decades during the September IMX period, presenting a significant headwind for U.S. equity markets. U.S. Federal Reserve Chairman Jerome Powell signaled that interest rates would remain unchanged in September, but cautioned that a pause in hikes did not indicate an imminent reversal of Fed policy. The U.S. Labor Department reported that the Consumer Price Index (CPI) rose by 0.6%, bringing the trailing 12-month increase to 3.7%, most of which could be traced back to the rising costs of fuel and shelter. Indexes related to food and other categories ticked higher by an average of 0.2%, while travel lodging and used vehicle prices decreased. The unemployment rate rose to 3.8% in August, and jobs data from the two preceding months were revised downward. Broadly, equity markets were lower for much of the September IMX period.

During the September IMX period the S&P 500 (SPX) decreased by 2.67% while the CBOE Volatility Index (VIX) rose by 12%, closing at 17.52. Many traders and investors likely found the yields in fixed income products attractive enough to rotate out of some equity holdings. The 10-year Treasury yield climbed to 4.573% and the U.S. Dollar Index rose to 105.815. Crude Oil Futures rose sharply, closing the period at $90.79 per barrel.

TD Ameritrade clients were net buyers of equities overall during the period. Popular names bought included:

• Apple Inc. (AAPL)
• NVIDIA Corp. (NVDA)
• Arm Holdings PLC (ARM)
• AMC Entertainment Holdings Inc. (AMC)
• Walt Disney Co. (DIS)
• Realty Income Corp. (O)

Names net sold during the period included:

• Exxon Mobil Corp. (XOM)
• Affirm Holdings Inc. (AFRM)
• Shopify Inc. (SHOP)
• Tesla Inc. (TSLA)
• Intel Corp. (INTC)

Millennial Buys & Sells

Like the general client population, TD Ameritrade millennial clients were net buyers of equities in September. Thematic trading in Artificial Intelligence (AI) and the microchips to power such technologies appeared to influence millennials, who purchased several semiconductor names associated with AI, most notably Nvidia (NVDA). In recent months, Nvidia’s stock has soared as the company continuously beat analysts’ earnings estimates. The stock’s parabolic move higher finally began to retrace as shares fell as much as 9% during the September IMX period before rebounding by 6%. Rival Advanced Micro Devices (AMD) was also among TD Ameritrade millennial clients’ top buys. Shares of AMD, and growth stocks in general, have been under pressure in recent months due to their sensitivity to interest rates. TD Ameritrade millennial clients also bought shares of Arm Holdings (ARM), whose chips and chip-related software are ubiquitous across all manner of electronic devices, in September following its recent IPO.

Top names sold by TD Ameritrade millennial clients include Affirm Holdings (AFRM), Airbnb (ABNB), and Shopify (SHOP)—all stocks associated with consumer discretionary purchases. Affirm operates in the “Buy Now, Pay Later” space, and while its earnings have continued to impress, the level of U.S. consumer debt could be a concern for traders and investors. Shares of Airbnb continued trending downward in September, perhaps reflecting that potential vacationers are saving discretionary travel for times ahead. Echoing consumers’ tendency to delay or reconsider spending, shares of Shopify slid by 20% during the September IMX period, closing at $54.57, and analysts’ consensus estimates remain modestly bullish on the stock price, with an average price target just above 68 per share.

Looking at S&P 500 sectors, TD Ameritrade millennial clients bought most heavily in Consumer Staples, Industrials, and Information Technology; they were net sellers of Consumer Discretionary, Energy, and Materials.

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 September 2023, 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. IMX data includes that from accounts of TD Ameritrade clients which recently transferred to our affiliate, Charles Schwab & Co., Inc., as part of our planned integration.

Investments in REITs and other real estate securities are subject to the same risks as direct investments in real estate, including loss of principal. The real estate industry is particularly sensitive to economic downturns. Be sure to consider your own financial situation, perform thorough research and consult with a qualified tax professional before making any investment decisions concerning REITs.

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.

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