December's Investor Movement Index Ends 2019 On A HIgh Note

For the first time since the summer of 2017, TD Ameritrade’s Investor Movement Index (IMX) posted its third consecutive increase to hit a 14-month high of 5.55 through December.

Benzinga · 01/07/2020 17:42

For the first time since the summer of 2017, TD Ameritrade’s Investor Movement Index (IMX) posted its third consecutive increase to hit a 14-month high of 5.55 through December.

The most recent edition of the IMX—a monthly survey of account activity among TD Ameritrade clients—reveals investors were again net buyers of equity, helping the index to rise 7.35% from the previous month to reach its current 5.55 score.

In addition to new all-time highs among the major indexes and low volatility throughout the equity market, the increase is attributed to renewed economic optimism following a tentative partial trade agreement between the U.S. and China. While investors were active in trading individual stocks, the TDA found that many of their client accounts increased their exposure to broad market funds as well as fixed income assets.

Buyers Flock To Troubled Stocks

One of the more prevalent themes highlighted in the December report is TDA clients’ predilection for stocks that faced headwinds during the bullish month.

Among the stocks that traders prioritized in December was Marvell Technology Group (NASDAQ: MRVL), which kicked off the month with a disappointing quarterly earnings report. Joining Marvell in the earnings dog house was Home Depot Inc. (NYSE: HD), which also reported a revenue miss and lowered its 2019 outlook. Peloton Interactive, Inc. (NASDAQ: PTON) was also net bought during the month after the stock dipped to a recent low of $25.67 following a bearish note from short-seller Andrew Left.

Finally, TDA clients also swarmed to 2019’s poster child of a troubled stock: Boeing Co. (NYSE: BA). Although Wall Street showed some positive reaction to news that Boeing would part ways with former CEO Dennis Muilenburg, news that the company would halt production of its 737 MAX in January pushed the stock to a four-month low of $323.

All-time Highs Attract Buyers And Sellers

However, the bigger trend in the December IMX report was the sheer amount of stocks that were hitting new highs.

There was, of course, plenty of expected profit-taking during the month. Facebook, Inc. (NASDAQ: FB), Citigroup Inc. (NYSE: C) and Alibaba Group Holding, Inc. (NYSE: BABA) each surged to new peaks in December and investors were more than willing to reap the rewards following the tumultuous summer they all weathered.

However, others like The Walt Disney Company (NYSE: DIS), Bristol-Myers Squibb Co. (NYSE: BMY) and Microsoft Corporation (NASDAQ: MSFT), which all hit new 52-week highs in the month, were actually on most investors buy-list during the month.

Click here to read the full December report.