The Investor Movement Index®, or IMXSM, increased to a record high of 6.58 for the June 2017 period,
making this the fifth consecutive month that TD Ameritrade clients were net buyers overall. It was also the second month in a
row that TD Ameritrade clients increased their exposure to equity markets, which was driven by net buying combined with an
increase in volatility among stocks that are widely held.
Equity performance was mixed across major indexes during the month, with the S&P 500 (SPX) increasing 0.31% and the Nasdaq
(COMP) declining 1.1%. So far this year, the SPX is up over 8% and the COMP is up more than 14%.
Even with the tech sell-off, some of the biggest companies in the sector continue to be popular net buys among our clients. On
the net selling side, the stocks that clients exited were a little more varied. Below we’ll take a look at what might’ve been
driving trading activity in some of these stocks.
Net Buying in June
Tech mega-caps continued to be a popular in the June IMX period. For several months in a row, Apple Inc.
(NASDAQ: AAPL), Facebook Inc (NASDAQ:
FB), Amazon.com, Inc. (NASDAQ: AMZN) and Microsoft Corporation (NASDAQ: MSFT) have been net buys among TD Ameritrade clients. These
stocks had a large price drop on June 9 when the sustainability of the tech rally was called into question by prominent Wall Street
analysts.
Despite the selloff, AMZN and FB hit new all-time highs in subsequent weeks; at the end of the month, AAPL remained about 12.5%
below its all-time high of $156.65 in May and MSFT was down 5.4% from its all-time high of $72.89 it hit at the beginning of
June.
Beyond the mega-caps, semiconductor company Advanced Micro Devices, Inc. (NASDAQ: AMD) and commerce platform Shopify Inc (US) (NYSE: SHOP) were also net buys. Both stocks were volatile during June, with
SHOP trading in a range of $81.55 to $100.80 and AMD trading between $10.57 and $14.67.
Even though there’s been a growing number of comparisons between the tech sector’s rally and dot-com bubble, the rally appears
to be sustained by earnings growth. In the upcoming quarter, the information technology sector is expected to report year-over-year
earnings growth of 10.5%, according to FactSet.
In addition to the rotation into tech stocks, TD Ameritrade clients were net buyers of dividend payers AT&T
Inc. (NYSE: T), Ford Motor Company
(NYSE: F), and Verizon Communications Inc (NYSE:
VZ). Based on their prices at the end of June, each of these
stocks had a dividend yield above 5%. Two other popular net buys that have made the list for several months in a row were
Tesla Inc (NASDAQ: TSLA) and
Berkshire Hathaway Inc. (NYSE:BRK/B).
Net Selling in June
Citigroup Inc (NYSE: C) and Bank of
America Corp (NYSE: BAC) were up during the period and
made the net sellers list following news that was considered positive for the financial sector. Earlier in the month, House
Republicans passed a bill that could loosen some of the regulatory burden on the financial sector if it makes it through the
Senate. Towards the end of the month, bank stocks rallied again on news that the nation’s largest banks passed the Fed’s stress
test and had their capital plans approved.
In addition to the banks, American Airlines Group Inc (NASDAQ: AAL) was a net sell after it hit a new 52-week high and reported record year-to-date
traffic volume. The stock also spiked during the middle of the month when Qatar Airways disclosed its intention to acquire at least
a 10% stake in AAL through open-market purchases.
Like the net buys, there were several companies that have been net sells for several months in a row including: Arconic
Inc (NYSE: ARNC), Newell Brands Inc
(NYSE: NWL), and Bristol-Myers Squibb Co
(NYSE: BMY). Check out the video below for more information
about which stocks TD Ameritrade retail clients were buying and selling during the month, as well as a look back at trading
activity in the first half of the year.
Check back in August to see how TD Ameritrade retail clients positioned themselves in July as Q2 earnings season gets underway. And if you get a
chance, take a look at how the Earnings Analysis
tab* on the thinkorswim® platform might help you stay on top of earnings reports next quarter.
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