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Investor Movement Index (IMX) for March 2017

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April 10, 2017
Retail stock market analysis for investors.

Even with markets close to all-time highs, the bulls keep beating back the bears as retail investors continued buying equities. Retail traders tracked by TD Ameritrade were net buyers of stocks in March, according to the Investor Movement Index®, or the IMXSM. The March reading hit a record high of 6.22, up 1.13% from 6.15 in February. This is the third consecutive month the index increased as TD Ameritrade clients remained net buyers.

At the beginning of March, the Dow Jones Industrial Average (DJI) topped 21,000 and the S&P 500 (SPX) broke the 2,400 mark for the first time ever. After the strong start, markets pulled back towards the end of the month and the SPX and DJI ended the period with slight losses. Our clients appeared to see the market dip as an opportunity to increase their exposure to equities.

There were several big events over the course of last month. The market rally stalled as the repeal and replacement of the Affordable Care Act failed, raising concerns about the ability of the new administration to enact other legislation like tax reform and deregulation. The Federal Reserve raised its benchmark rate and comments from Fed governors and Fed Chair Janet Yellen hinted at two to three more hikes this year depending on economic growth. These events likely impacted buying and selling as clients rotated in and out of positions.

Some highlights from the March IMX, Advanced Micro Devices Inc. (AMD) and Nvidia Corp. (NVDA) were net buys. The two companies’ products are widely used in computing, gaming and other tech products. Target Corp. (TGT) was a net buy in the period as its price declined following a negative earnings surprise early in the month. Berkshire Hathaway Inc. (BRK/B) and Bank of America (BAC) were net buys, both stocks sold off during the period. Bank of America was a net buy possibly by clients looking to capture future Fed interest rate increases.

There were some familiar names that made the net seller list in March. After reaching a 52-week high last month, Arconic Inc. (ARNC) and Walt Disney Co. (DIS) made the net sellers list. Both of these stocks hit their 52-week highs and it appears that clients took the opportunity to lower their exposure. Caterpillar Inc. (CAT) had news reports questioning overseas tax practices and with that scrutiny we observed clients reducing exposure to that firm.

If you want to learn more about which stocks retail traders were buying and selling during the month, check out the video below for my take on the March IMX reading.

Q1 earnings season is just getting started and the new Earnings Analysis tab* on the thinkorswim® platform by TD Ameritrade can help you stay on top of it all. Check back in May to find out which stocks traders favor in next month’s IMX report.    

John
@JohnHart_TDA