June's IMX Shows Traders Dropping Equity For The First Time Since 2016

Traders reduced exposure to equities markets in June according to TD Ameritrade’s Investor Movement Index. The monthly review of investor behavior posted a slight decrease to 4.61 from its May score of 4.93.

Of particular note this month is that TD Ameritrade clients were net sellers of equity for the first time since November 2016. This despite drastically less volatility in the equity market compared to May.

This is in part thanks to warming relations in U.S.-China trade talks and persistent hopes for an incoming interest rate cut. That hope was further bolstered by low jobs numbers from May, although other economic trends like high consumer confidence run counter to trader’s combined fear/hope of an emergent economic slowdown.

Sellers Ring The Register

Clients of TD Ameritrade were net sellers of Apple Inc. AAPL, which finished the month up more than 14% despite Design Chief Jony Ive’s announced departure to launch his own creative firm. General Electric Company GE was also net sold on a strong month after reporting record amounts of orders in its aviation unit.

Other net sellers for June included Target Corp. TGT, which announced same-delivery for 65,000 products and increased its dividend, as well as Cypress Semiconductor Corp. CY, which announced it would be acquired by German semiconductor manufacturer Infineon for nearly $10.1 billion.

Finally, Netflix Inc. NFLX also saw heavy selling from TDA clients over the course of the month, as many of the platform’s most popular licensed programs, including “The Office” and “Friends,” began to disappear from the platform as their rights holders, Comcast Corporation CMCSA and the AT&T Inc. T-owned WarnerMedia gear up for their own streaming and distribution plans.

Buyers Turn On, Tune In and Drop Clout

Although clients were overall net sellers, some big names remained popular buys throughout June. Tesla Inc. TSLA traded higher after better-than-expected second quarter delivery numbers and reports the company was developing its own battery cells. Beyond Meat BYND was also net-bought on the announcement of a new “meatier” product intended to look and taste more like a traditional burger.

Benefitting from renewed trade negotiations, Alibaba Group Holding BABA was net-bought. The company also launched an English language portal on its Tmail retail site.

Cannabis stocks also saw a good deal of investor attention in June, as the industry encountered some volatility that traders saw as a buying opportunity. Canopy Growth Co. CGC saw an upswing in buying after a disappointing second-quarter earnings report, although Canopy CEO Bruce Linton projected higher margins. TDA investors also flocked to Aurora Cannabis Inc ACB, which received an extremely bullish recommendation from an Analyst with Cowen.

Finally, Walt Disney Co. DIS was a net buy as the media company has dominated the summer box office with popular franchise releases like “Toy Story 4,” which generated $118 million on its opening weekend.