Market Overview

May's IMX Shows TD Ameritrade Investors Await Further Growth

May's IMX Shows TD Ameritrade Investors Await Further Growth

After tracking lower for four months in a row, TD Ameritrade's Investor Movement Index (IMX) ticked up slightly by 5.64 percent to 5.06. The modest gain reflects movements in the broader indexes, with the S&P 500 showing 1.9 percent gains throughout a bumpy May while the small-cap-focused Russell 2000 up nearly 6 percent.

While the IMX, which reflects trading activity among the broker's clients to generate a broad sentiment score, is still well below its high for the year of 7.79, the May results carry signs of optimism for further gains in the equity market on the part of individual investors.

Take A Look At This Growth

Of the more remarkable signs from the past month that the economy might be generating some heat is the fact that the yield rate on the 10-year treasury surpassed 3 percent for the first time since late 2013. The yield didn't hold that level for long, however, particularly after the Federal Reserve committee admitted it might allow some inflation above its 2 percent benchmark -- if and when it reaches that threshold.

TDA investors took their cue from this optimistic tone, buying into stocks in sectors with the strongest possibility of benefiting from a supercharged economy. Telecom giants AT&T Inc. (NYSE: T) and Sprint Corp (NYSE: S) were both among the stocks that were net buys with TDA clients, and both traded at or near 52-week lows.

Newer tech names Snap Inc (NYSE: SNAP) and Spotify Technology SA (NYSE: SPOT), which IPO'd the previous month, were also net buys after both delivered lower-than-expected earnings numbers that took a bite out of their share prices. Still, other companies in the tech space, like Chinese video streaming company Iqiyi Inc. (NASDAQ: IQ) and cloud company Okta Inc. (NASDAQ: OKTA) we're also attractive choices following strong Q1 results.

Other popular stocks for TDA clients included General Electric Company (NYSE: GE), Berkshire Hathaway Inc. (NYSE: BRK-B) and Walt Disney Company (NYSE: DIS).

New Highs Get Faded

This past earnings season held further portents for economic growth with more than 75 percent of S&P 500 companies reporting better-than-expected revenue results. This resulted in a lot of big name stocks reaching new highs, which in turn meant many TDA investors took the opportunity to cash out.

The May IMX points to Apple Inc. (NASDAQ: AAPL) and Facebook, Inc. (NASDAQ: FB) as two major market components to reach new highs off of mostly successful earnings reports, only to be net sold by TD Ameritrade investors. Retailer Macy's Inc. (NYSE: M) and oil exploration company ConocoPhiiips (NYSE: COP) were also net sold among the broker's clients, the former on a 52-week after revealing a better than expected Q1 report while the latter found a year-high from a tightening crude market.

Valeant Pharmaceuticals (NYSE: VRX) and Frontier Communications Corp. (NASDAQ: FTR) were also net sold by TDA clients.


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Posted-In: IMX Investor Movement Index TD AmeritradeNews Markets General Best of Benzinga