Investor Movement Index For June 2017

Summary

• The IMX increased to a record high of 6.58 for the June 2017 period, making this the fifth consecutive month that TD Ameritrade clients were net buyers overall.
• For several months in a row, AAPL, FB, AMZN and MSFT have been net buys among TD Ameritrade clients.
• There were several companies that have been net sells for several months in a row including ARNC, NWL, and BMY.

By Victor Jones, Director of International Trading

The Investor Movement Index^®, or IMX^SM, increased to a record high of 6.58 for the June 2017 period, making this the fifth consecutive month that TD Ameritrade clients were net buyers overall. It was also the second month in a row that TD Ameritrade clients increased their exposure to equity markets, which was driven by net buying combined with an increase in volatility among stocks that are widely held.

Equity performance was mixed across major indexes during the month, with the S&P 500 (SPX) increasing 0.31% and the Nasdaq (COMP) declining 1.1%. So far this year, the SPX is up over 8% and the COMP is up more than 14%.

Even with the tech selloff, some of the biggest companies in the sector continue to be popular net buys among our clients. On the net selling side, the stocks that clients exited were a little more varied. Below we’ll take a look at what might’ve been driving trading activity in some of these stocks.

Net Buying in June

Tech mega-caps continued to be a popular in the June IMX period. For several months in a row, Apple (AAPL), Facebook (FB), Amazon (AMZN) and Microsoft (MSFT) have been net buys among TD Ameritrade clients. These stocks had a large price drop on June 9 when the sustainability of the tech rally was called into question by prominent Wall Street analysts.

Despite the selloff, AMZN and FB hit new all-time highs in subsequent weeks; at the end of the month, AAPL remained about 12.5% below its all-time high of $156.65 in May and MSFT was down 5.4% from its all-time high of $72.89 it hit at the beginning of June.

Beyond the mega-caps, semiconductor company Advanced Micro Devices (AMD) and commerce platform Shopify (SHOP) were also net buys. Both stocks were volatile during June, with SHOP trading in a range of $81.55 to $100.80 and AMD trading between $10.57 and $14.67.

Even though there’s been a growing number of comparisons between the tech sector’s rally and dot-com bubble, the rally appears to be sustained by earnings growth. In the upcoming quarter, the information technology sector is expected to report year-over-year earnings growth of 10.5%, according to FactSet.

In addition to the rotation into tech stocks, TD Ameritrade clients were net buyers of dividend payers AT&T (T), Ford (F), and Verizon (VZ). Based on their prices at the end of June, each of these stocks had a dividend yield above 5%. Two other popular net buys that have made the list for several months in a row were Tesla (TSLA) and Berkshire Hathaway (BRK.B).

Net Selling in June

Citigroup (C) and Bank of America (BAC) were up during the period and made the net sellers list following news that was considered positive for the financial sector. Earlier in the month, House Republicans passed a bill that could loosen some of the regulatory burden on the financial sector if it makes it through the Senate. Towards the end of the month, bank stocks rallied again on news that the nation’s largest banks passed the Fed’s stress test and had their capital plans approved.

In addition to the banks, American Airlines (AAL) was a net sell after it hit a new 52-week high and reported record year-to-date traffic volume. The stock also spiked during the middle of the month when Qatar Airways disclosed its intention to acquire at least a 10% stake in AAL through open-market purchases.

Like the net buys, there were several companies that have been net sells for several months in a row including: Arconic (ARNC), Newell Brands (NWL), and Bristol-Myers Squibb (BMY). Check out the video below for more information about which stocks TD Ameritrade retail clients were buying and selling during the month, as well as a look back at trading activity in the first half of the year.

Check back in August to see how TD Ameritrade retail clients positioned themselves in July as Q2 earnings season gets underway. And if you get a chance, take a look at how the Earnings Analysis tab* on the thinkorswim^® platform might help you stay on top of earnings reports next quarter.

This article was originally published on The Ticker Tape.

Inclusion of specific security names in this commentary does not constitute a recommendation from TD Ameritrade to buy, sell, or hold.

*Earnings data/research is provided by unaffiliated third parties.

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.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.