Despite Historic Market Performance, IMX Remains Relatively Unchanged

As the S&P 500 and Dow Jones Industrial Average surpassed the 3,000 mark and 27,000 mark, respectively, TD Ameritrade’s Investor Movement Index barely budged. The IMX, a monthly review of investor behavior based on the portfolio activity of TD Ameritrade clients, decreased by 0.22% to 4.6.

Despite the slight dip, TD Ameritrade clients were overall net buyers in July, although they reduced their exposure to equity markets in favor of less-risky options like fixed-income products.

Fears of a coming economic downturn did worry investors, according to TD Ameritrade’s report, but they took solace in the Federal Reserve’s dovish tone. Although the 25 basis point cut may have been less than the market expected.

Even in the midst of an interest rate cut, the U.S. economy grew 2.1% in the second quarter, with consumer spending increasing 4.3% offsetting a decline in business investment, all of which contributed to client investing behavior.

Earnings Bring In Buyers

After announcing plans to acquire Allergan AGC for $63 billion and an earnings beat, AbbVie Inc. ABBV was net bought by TDA clients. Zoom Technologies Inc ZM expanded services to Australia and the United Kingdom and was also net bought, despite a major security breach among Apple Inc AAPL MacBook system users. TDA clients were also buyers in Walt Disney Co. DIS with the release of “Lion King” generating record ticket sales.

Cannabis companies Canopy Growth Corp. CGC and Aurora Cannabis Inc. ACB were also net bought after CannTrust Holdings Inc CTST was caught manufacturing cannabis in unlicensed rooms, which led investors to put their money toward more established names in the industry.

Big Tech Was Big Sold

Throughout July, clients sold notable tech securities. Amazon.com, Inc. AMZN was net sold after announcing the end of a quarterly profit streak due to higher shipping costs and slowing cloud-computing growth. Apple was another of the net sold FANG stocks following its stated intent to buy Intel INTC smartphone-modem chip business. Finally, TDA investors took profit in Facebook Inc. FB following strong Q2 earnings and a record-setting fine from the Federal Trade Commission for data privacy violations.

Other companies that were net sold included General Electric Co. GE following a good Q2 earnings performance and mounting analyst concerns that the grounding of Boeing Co. BA 737 Max aircraft could hurt GE’s bottom line. Square Inc. SQ was also net sold despite a Q2 earnings beat.