TD Ameritrade's IMX for May

Discussion in 'Stock Market Today' started by Gray Wolf, Jun 6, 2016.

  1. Gray Wolf

    Gray Wolf Well-Known Member

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    Investor Movement Index Summary:



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    Nicole Sherrod explains factors behind movement in this month's IMX.
    The IMX recorded its largest ever single-month increase in May, growing 0.46 to 4.87.

    TD Ameritrade clients were net buyers of equities in May which helped to increase the IMX. Because the IMX measures portfolio volatility relative to overall market volatility, rising volatility of some of the more widely held positions paired with relatively stable market conditions further increased the IMX. Net buying in some of those same widely held names whose relative volatility rose also had a compounding effect on the IMX score, resulting in the largest increase in the score since reporting began.

    The major equity market indices each ended May above where they began, but only after slight declines during the month. The S&P 500 and Russell 2000 were both up over 1.5% for the month, while the NASDAQ Composite increased more than 3%. The Dow Jones Industrial Average saw the smallest increase, closing just a half a percent higher than where it began in May. The release of the minutes from the Federal Reserve Board meeting in April seemed to cause some mixed reactions mid-month. The equities market reacted in see-saw fashion and Treasury prices fell after the minutes seemed to indicate the Fed may be more open to raising their key rate than was previously thought. Fed futures markets seemed to change their expectations as well, with the CME's FedWatch tool showing a nearly 25% probability of a rate increase in June – up from less than 6% a month ago.

    Trading

    Well-known names that have seen recent price pressure were popular net buys in TD Ameritrade client accounts in May. Apple Inc. (AAPL) was a net buy for the period as the stock trended downward until mid-month following an unfavorable earnings announcement late last month. Netflix.com Inc. (NFLX) was a buy for TD Ameritrade clients during the period and also saw pressure until mid-month. Each company’s share price rebounded toward the end of the period. Starbucks Corp. (SBUX) saw some downward pressure in May and found more clients buying than selling. Facebook Inc. (FB), which has traded to new highs this year but was largely range bound during the month, was a net buy as well.

    Additional popular names bought included Twitter Inc. (TWTR), Gilead Sciences Inc. (GILD), and Valeant Pharmaceuticals Intl. (VRX).

    The May IMX period saw net selling in oil producers ExxonMobil Corp. (XOM) and Halliburton Company (HAL) as their prices continued to rally from year-to-date lows set at the beginning of the year. The companies were net buys during the end of 2015 and in the beginning of 2016 as the price of crude oil slumped below $40 a barrel. In the financial sector Bank of America Corp. (BAC) was net sold as its shares appeared to find a level of support during the month. Digital payments company PayPal Holdings Inc. (PYPL) was also net sold in May.

    Additional popular names sold included Alibaba Group Holding Ltd. (BABA) and Chevron Corp. (CVX).

    Inclusion of specific security names in this commentary does not constitute a recommendation from TD Ameritrade to buy, sell, or hold.
     

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