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TD Ameritrade Index Reflects A Direct Response To The COVID-19 Pandemic

TD Ameritrade Index Reflects A Direct Response To The COVID-19 Pandemic

TD Ameritrade’s Investor Movement Index (IMX) — a monthly behavior-based index that indicates the attitude of retail investors — reached a “Low” ranking in March compared to historic averages, a direct effect of the COVID-19 global pandemic.

The IMX decreased to 4.16 in March, down 19.38% from the February score of 5.16. The index goes up when clients are net buyers and goes down when clients are net sellers.

“Not since the financial crisis of 2008 have we seen this kind of volatility in the markets,” said JJ Kinahan, chief market strategist at TD Ameritrade.

Historic Levels Of Volatility

The Dow Jones registered 12 days with a move greater than plus or minus 1,000 points, posting its worst day since October 1987, ending the 11-year bull market.

All three indexes decreased as markets entered a bear market. The S&P 500 was down 13.97%, Dow Jones Industrial Average was down 14.85% and the Nasdaq was down 16.19%.

Markets rebounded during the last week of the month due to the $2 trillion stimulus package passed by the Trump Administration. This caused the Dow to have its best week on a points basis since 1938.

What TD Ameritrade Clients Bought and Sold

During the month, TD Ameritrade clients were net buyers of equities, after being net sellers the month prior. Among the big-name companies that clients bought were Walt Disney Co (NYSE: DIS), Ford Motor Company (NYSE: F), Boeing Co (NYSE: BA), and Exxon Mobil Corporation (NYSE: XOM).

And among companies that retail investors sold this month were Activision Blizzard, Inc. (NASDAQ: ATVI), Paypal Holdings Inc (NASDAQ: PYPL), TENCENT HOLDING/ADR (OTCQX: TCEHY), Fitbit Inc (NYSE: FIT).

“Looking ahead, there’s a lot we don’t know, from the continued impact of the COVID-19 pandemic to the potential lift provided by the recently passed economic stimulus package,” said Kinahan.

Photo by Roberto Júnior on Unsplash


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Posted-In: TD Ameritrade Investor Movement IndexNews Economics Markets General

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