TD Ameritrade's Investor Movement Index: Clients Were Net Buyers of Equities in June
TD Ameritrade, Inc. ("TD Ameritrade"), a broker-dealer subsidiary of TD Ameritrade Holding Corporation (Nasdaq: AMTD), is today releasing the Investor Movement Index® reading for June 2016. The Investor Movement Index, or the IMXSM, is a proprietary, behavior-based index created by TD Ameritrade that aggregates Main Street investor positions and activity to measure what investors are actually doing and how they are positioned in the markets.
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TD Ameritrade's IMX vs. S&P 500 (Graphic: TD Ameritrade)
The June 2016 Investor Movement Index for the four weeks ending June 24, 2016, reveals:
- Reading: 5.00 (compared to 4.87 in May)
- Trend direction: Positive
- Trend length: 3 Months
- Score relative to historic ranges: Moderately High
The IMX increased to 5.00 in June, a month in which TD Ameritrade clients were net buyers of equities.
TD Ameritrade clients were net buyers of equities in June, with exposure to the equity markets increasing for the first three weeks of the month and declining during the fourth week. The buying activity helped to increase the IMX by 0.13 to 5.00. There were some increases in the volatility of a few widely held names relative to the overall market, which also helped to increase the IMX; however, trading in names that saw decreases in volatility relative to the overall market during the turbulent fourth week helped to lessen the increase in the overall IMX score.
"After being range bound for most of the month of June, the volatility at the end of the month spurred by the Brexit vote, was a catalyst for our clients to step up their buying activity," said JJ Kinahan, chief market strategist, TD Ameritrade. "The dip was seen as a time of opportunity rather than calamity."
Increased uncertainty leading up to the Federal Reserve Board meeting and the United Kingdom's referendum on whether or not to remain in the European Union seemed to weigh on the minds of investors. After the Fed announced there would be no change to their key rate in June, focus appeared to shift to the U.K.'s referendum vote, or Brexit. Volatility declined slightly early in the fourth week but the results of the referendum, in which U.K. voters signaled their desire to separate from the E.U., appeared to come as a surprise. Volatility in the S&P 500, as measured by the VIX, reached its highest point in four months following the announcement.
FANG stocks Facebook Inc. (FB) and Amazon.com Inc. (AMZN) were net buys during the June IMX period. Each has seen declines after recently setting all-time highs. Dividend-paying auto makers Ford Motor Co. (F) and General Motors Co. (GM), both of which yield around 5%, were also net buys in June. TD Ameritrade clients were also net buyers of consumer discretionary sector issuers Under Armour Inc. (UA) and Walt Disney Co. (DIS), which have both been range bound after setting year-to-date highs following their Q2 earnings announcements.
Although they were net buyers overall in June, TD Ameritrade clients did find some names to sell during the period. Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) were net sold in June as both oil refiners reached year-to-date highs. Crude oil also traded above $50 per barrel for the first time in 2016. Other companies that also reached year to date highs and were net sold included Wal-Mart Stores (WMT) and Corning Inc. (GLW). TD Ameritrade clients were net sellers of technology sector names Intel Corp. (INTC) and Cisco Systems Inc. (CSCO) as well.
The IMX value is calculated based on a complex proprietary formula. Each month, TD Ameritrade pulls a sample from its client base of 6 million funded accounts that 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 December 2010, to view the full report from June 2016, 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 TD Ameritrade Mobile Trader platforms.
Inclusion of specific security names in this commentary does not constitute a recommendation from TD Ameritrade to buy, sell, or hold.
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.
For the latest TD Ameritrade news and information, follow the Company on Twitter, @TDAmeritradePR.
Source: TD Ameritrade Holding Corporation
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