The Investor Movement Index increased to 4.55 in June, up 4.6 percent from its May score of 4.35. The IMX is TD Ameritrade proprietary, behavior-based index, aggregating Main Street investor positions and activity to measure what investors actually were doing and how they were positioned in the markets.
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“In June, optimism waxed and waned as state economies took steps to reopen and spikes in cases of COVID-19 rippled across the country, contributing to continued volatility in the markets”
The reading for the four-week period ending June 30, 2020, ranks “Moderate Low” compared to historic averages.
“In June, optimism waxed and waned as state economies took steps to reopen and spikes in cases of COVID-19 rippled across the country, contributing to continued volatility in the markets,” said JJ Kinahan, chief market strategist at TD Ameritrade. “Through their buys in the travel and hospitality sectors, our clients showed confidence in the uptick in economic activity to take advantage of the ripple effect they see coming to these sectors.”
Equity markets were mixed during the period. The S&P 500 and Dow Jones Industrial Average both declined, moving lower by 1.16 percent and 1.45 percent, respectively. The Nasdaq Composite registered a gain, moving higher by 2.82 percent. During the period, the S&P 500 traded above 3,200 for the first time since February, and the Nasdaq Composite topped 10,000 for the first time ever. During the middle of the period, the Dow fell more than 1,800 points, its worst day since March, over worries about spikes in U.S. coronavirus infections. Later, an uptick in economic activity in China and the U.S. suggested the initial stages of recovery from the pandemic. But stocks sold off as infection rates increased near the end of the period, with some regions pausing reopening plans. The Federal Reserve ordered banks to cap dividend payments and halt stock buybacks on worries that a prolonged economic downturn could saddle them with hundreds of billions of dollars in losses on soured loans, but did indicate the largest U.S. banks are likely strong enough to survive the crisis.
TD Ameritrade clients used the volatility during the June period to increase exposure to equity markets. Clients were net buyers overall, and net buyers of equities, with large buying among the Consumer Discretionary, Industrials, and Financials sectors. Some of the popular names that clients bought during the period included:
- Boeing Inc. (BA)
- Norwegian Cruise Line (NCLH)
- The Walt Disney Company (DIS)
- Slack Technologies Inc. (WORK)
- AT&T Inc. (T)
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