Clients were net buyers of equities during the October IMX period, with buying interest strongest in the Financial, Industrial, and Consumer Discretionary sectors

The Investor Movement Index^® (IMX^SM) came in at 5.64 in October, flat with September and still below a 52-week high of 5.70 in August. The IMX is TD Ameritrade’s proprietary, behavior-based index, aggregating Main Street investor positions and activity to measure what investors were doing during the period and how they were positioned in the markets.

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The reading for the four-week period ending October 27, 2023 ranks “moderate low” compared to historic averages.

“While October’s IMX score of 5.64 ranks on the low end historically, it’s up significantly from this time last year at 4.25,” said Joe Mazzola, Director of Trading and Education at Charles Schwab. “October was a tough month for markets, but clients were able to find opportunities in individual names and remained net buyers of equities particularly in the Financial, Industrial, and Consumer Discretionary sectors.”

US equity markets remained under pressure during the October IMX period amidst increased geopolitical uncertainty and rising bond yields. On October 6, the US Bureau of Labor and Statistics released the Employment Situation Summary, which showed nonfarm payrolls rose by 336,000 in September, widely exceeding street expectations, but the unemployment rate remained at 3.8%. On October 12 the Consumer Price Index (CPI) for September was released showing prices increased by 3.7% over the past 12 months, in line with street expectations, but still above the Federal Reserve’s 2% target. Just as in the prior period, most of the increase was related to rising costs of fuel and shelter. Indexes related to food and other categories ticked higher by an average of 0.3%, while indexes for used cars and trucks and apparel decreased. Lastly, a mixed start to the final quarterly earnings season of 2023 showed outsized volatility in a few mega cap tech names, but largely highlighted better than expected earnings as cost discipline remains a key theme for many companies.

During the October IMX period, the S&P 500 (SPX) decreased by nearly 4% and the CBOE Volatility Index (VIX) steadily rose to close at 21.27. Perhaps most notably, the 10-year US Treasury yield reached 5% for the first time since 2007, but it was unable to sustain that level for long as it retreated slightly to close out the period below 4.9%. The US Dollar Index also continued its ascent closing near 106.50 just off year-to-date highs. December crude oil futures ended the period near $85 a barrel down over 5% during the period.

TD Ameritrade clients were net buyers of equities overall during the period. Popular names bought included:

• Realty Income Corp (O)
• Tesla (TSLA)
• Coca Cola (KO)
• NVIDIA Corp. (NVDA)
• Rivian (RIVN)

Names net sold during the period included:

• Meta Platforms (META)
• Roblox (RBLX)
• Palantir (PLTR)
• Apple (AAPL)
• UnitedHealth Group (UNH)

Millennial Buys & Sells

Investment exposure in TD Ameritrade’s Millennial client population decreased by 1.38% to 5.78 during the four-week period ending October 27, 2023, though like the general client population, Millennial clients remained net buyers of equities.

Clients rotated into mega cap technology and big box retailers, as well as large cap value. Realty Income Corp (O) was among Millennial clients’ top buys as shares have been under pressure amid rising interest rates and underwhelming corporate earnings. Millennial clients also bought weakness in Tesla (TSLA) during the October IMX period, following the company’s first earnings miss in nearly three years. While Tesla has made improvements in vehicle production, the company elected to slash prices in efforts to increase demand, which has weighed on its margins. Millennial clients also appeared to “buy the dip” in Coca Cola (KO) as it tested a one-year low near the end of the period. The company beat analyst estimates for both top line (revenue) and bottom line (earnings per share).

Top names sold by TD Ameritrade Millennial clients include Meta Platforms (META), Roblox (RBLX) and Palantir (PLTR). Meta Platforms tested a 52-week high during the October IMX period, and Millennial clients used this as an opportunity to rotate out of the social media giant. The company reported a beat of analysts’ estimates as it continues to execute a turnaround plan focused on expense reduction measures and additional investments in messaging apps aimed at corporate enterprises. Millennial clients sold Roblox, which targets a younger demographic of gamers and developers, perhaps expressing some skepticism as it extended a bounce off a September bottom. The stock currently trades close to $32 per share with an average analyst price target of $37 per share. Finally, TD Ameritrade Millennial clients sold shares of Palantir (PLTR) as it rallied throughout the first half of the period after announcing a new contract with the Army for its AI capabilities.

Looking at S&P 500 sectors, TD Ameritrade Millennial clients bought most heavily in Consumer Discretionary, Financials, and Industrials; they were net sellers of Information Technology, Energy, and Communication Services.

About the IMX

The IMX value is calculated based on a complex proprietary formula. Each month, TD Ameritrade pulls a sample from its client base of funded accounts, which includes all accounts that completed a trade in the past month. The holdings and positions of this statistically significant sample are evaluated to calculate individual scores, and the median of those scores represents the monthly IMX.

For more information on the Investor Movement Index, including historical IMX data going back to January 2010, to view the full report from October 2023, or to sign up for future IMX news alerts, please visit www.tdameritrade.com/IMX. Additionally, TD Ameritrade clients can chart the IMX using the symbol $IMX in either the thinkorswim^® or thinkorswim Mobile platforms.

Inclusion of specific security names in this commentary does not constitute a recommendation from TD Ameritrade to buy, sell, or hold. All investments involve risk including the possible loss of principal. Please consider all risks and objectives before investing.

Past performance of a security, strategy, or index is no guarantee of future results or investment success. Historical data should not be used alone when making investment decisions. Please consult other sources of information and consider your individual financial position and goals before making an independent investment decision.

The IMX is not a tradable index. The IMX should not be used as an indicator or predictor of future client trading volume or financial performance for TD Ameritrade. IMX data includes that from accounts of TD Ameritrade clients which recently transferred to our affiliate, Charles Schwab & Co., Inc., as part of our planned integration.

Investments in REITs and other real estate securities are subject to the same risks as direct investments in real estate, including loss of principal. The real estate industry is particularly sensitive to economic downturns. Be sure to consider your own financial situation, perform thorough research and consult with a qualified tax professional before making any investment decisions concerning REITs.

About TD Ameritrade

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