Market Overview

TD Ameritrade's IMX Sentiment for Aug. Down 2.9% to 5.68


The IMX declined 0.17 points to 5.68 in August while the S&P 500 climbed above 2000 for first time ending the month at a record high.

Investors have had many events to consider recently, balancing positive domestic economic data against geopolitical concerns related to Ukraine, the Middle East, an outbreak of the Ebola virus in Africa, and Argentina's debt default. TD Ameritrade clients reduced their equity exposure during the August IMX period, which returned the IMX to the levels we saw in April through June of this year. Equity markets began to fall in late July 2014, which had some investors wondering if it was the start of a correction. However, equity indices quickly reversed course in August, rising sharply. The S&P 500 broke the 2000 point barrier, setting a new high, while both the Dow Jones Industrial Average and NASDAQ also traded at record levels. Small cap stocks measured by the Russell 2000 index are still trading below the high set in July 2014.

Equity buying in the August IMX period appeared focused on names in the news like Walgreens (WAG), which decided not to move its headquarters overseas to potentially benefit from lower corporate tax rates; Kinder Morgan Inc. (KMI), which announced restructuring plans to buy its publicly traded limited partnerships; and Tekmira Pharmacueticals (TKMR), which is working to develop an Ebola vaccine. Dips in popular names like Sprint (S), Transocean (RIG), and 3D Systems Corp (DDD) also prompted TD Ameritrade clients to buy during the August IMX period. Recent IPOs by MobilEye (MBLY) and El Pollo Loco (LOCO) were popular buys as well.

Additional popular names bought included Disney (DIS) and Gilead (GILD).

TD Ameritrade Clients were net sellers overall for the August IMX period, matching the reduction in equity exposure seen in the decline of the IMX score. The technology sector led the way in the selling, with many notable names sold - including Intel (INTC), Microsoft (MSFT), and Advanced Micro Devices (AMD). Each of the stocks had recently begun to recover from a dip in price. The stock price of Twitter (TWTR) had been under pressure since late January, but jumped higher following their earnings announcement at the end of July. TWTR continued to move higher in August, and our clients were net sellers. Nokia (NOK) was also a net sell as the stock fell sharply and then recovered during the month. Citigroup (C) and Goldman Sachs (GS) were both popular sells in the financial sector as well.

Additional popular names sold included Home Depot (HD), Cisco (CSCO), and Exxon Mobil (XOM).

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