August IMX Reveals Investors Remain Bullish On Blue-Chips, Bearish On China

Although the broad market saw a notable upswing of volatility over the course of August, the tumult didn’t seem to register on TD Ameritrade’s monthly Investor Movement Index (IMX), which remained mostly unchanged from July’s reading.

Based on the portfolio activity of their clients, the August edition of TD Ameritrade’s survey of investor behavior rose a modest 0.02 points, or 0.4%, to a reading of 4.62. This marks the second period in which the index has been essentially flat. What’s more, August is the sixth month of 2019 to have a reading in clustered the 4.60 range.

Despite the minimal change in the index, August did reveal that TDA investors to be net buyers of equity, a change from the previous two months of selling. This is likely a result of sporadic activity in the broad market, which saw multiple consecutive intraday moves of ±1% throughout August.

Bought: High Flyers And Recent IPOs

Among the most notable trends through the choppy August is that investors tended to gravitate toward blue-chip stocks that were slightly off of all-time highs.

Microsoft Corporation MSFT, Amazon.com Inc. and Walt Disney Co DIS were all popular acquisitions among TD clients over the course of the month. All three of those names ended July at a discount of at least a few percentage points but remained mostly flat through August.

However, while the blue chips attracted investors looking for a good entry, more thrifty investors turned to steep bargains among 2019’s class of IPOs. Both Beyond Meat Inc BYND and Uber Technologies Inc UBER were net buys among TDA investors, and both fell by 30% or more from their recent highs over the course of August.

Although the deals in recent IPOs were attractive, investors also gravitated to steep discounts in more established stocks, including AbbVie Inc. ABBV, Ford Motor Company F and BP BP.

Sold: Anything With Exposure To China

While buyers sought out diverse deal options, sellers were mostly unanimous in their eagerness to cash out of anything exposed to China and the ongoing trade war. August saw stocks drop on news of additional tariffs from both sides, but also jumped late in the month on the announcement that negotiations would resume in October.

As the poster child for the trade-war strife, Apple Inc. AAPL and its suppliers, like QUALCOMM, Inc. QCOM and Micron Technology, Inc. MU, all experienced an outsized amount of selling as their prices bounced from low to high. Other semiconductor names with a stake in the negotiations, like Lam Research Corporation LRCX, also saw heavy selling pressure through the month's ups and downs.

However, it wasn’t only the tech sector that saw profit-taking as a result of trade news. Companies that deal in agriculture or materials like Corteva Inc. CTVA and DuPont de Nemours Inc. DD were also net sold.

Additional names that were net sold on the month included communication names like AT&T Inc. T and Sirius XM Holdings Inc. SIRI, which both hit new recent highs, and Wabtec Corp. WAB, which hit a new 52-week low in August

Click here to read the full IMX report.

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