Each month, TD Ameritrade issues a proprietary data sample it calls the “investor movement index.”
The financial services company pulls data 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, a snapshot of investor sentiment.
TD Ameritrade’s Head Trading Strategist and Director of Derivative Strategy Shawn Cruz told Benzinga’s Mitch Hoch Monday on "Stock Market Movers" that the IMX increased 3.36% to 4.31 from its December score of 4.17.
TD Ameritrade clients were net buyers of Tesla Inc TSLA, Rivian Automotive Inc RIVN and Ford Motor Co F.
Clients were net sellers of Meta Platforms Inc META, Boeing Co BA and American Airlines Group Inc AAL.
“If you look at 2022, retail sentiment was trending lower and lower throughout the year,” Cruz said to Hoch. “It looks like we’ve bottomed a little bit — we’re seeing clients go out there and take a little bit more risk, and that’s consistent with other market measures that we’re seeing. If you look at the VIX, the volatility index is down below 20. Down below 20 means there is a risk appetite out there.”
The head trading strategist told investors that while the IMX was showing signs of life, be careful about taking on too much risk. He believed there was more volatility ahead in the markets, citing the most recent jobs report as a reason the Federal Reserve could continue to raise interest rates.
“The strong [jobs] number means the Fed may have to do more to take inflation lower, but it also means if you were looking for the potential for a severe recession — you don’t get a severe recession when you’re adding half-a-million jobs in a month,” Cruz said.
Read Also: Fed's Kashkari Says Aggressive Rate Hikes Needed To Curb Inflation: 'Haven't Seen Anything Yet To Lower My Rate Path'
See the full "Stock Market Movers" show below:
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