Investor Movement Index Summary: April 2019

Exposure to equity markets decreased among TD Ameritrade clients during the April IMX period. The IMX decreased by 0.86%, down 0.04 from the previous period, to 4.61.

TD Ameritrade clients were net buyers overall during the period, but favored less risky assets. Clients were net sellers of equities, and favored buying of products with reduced risk, including fixed income. This rotation out of equities and into fixed income pushed the IMX to a score of 4.61. Volatility of the S&P 500 was once again light, with only one trading day moving in excess of +/-1% during the period. The Cboe Volatility Index, or VIX, which measures volatility of the S&P 500, spent the period below 15.

Equity markets moved higher during the April period. The S&P 500 increased by 3.7%, while the Nasdaq Composite Index was up 5.4%, with each ending the period at all-time closing highs. Blue chips also moved higher, with the Dow Jones Industrial Average up 2.4%. Markets moved higher after better-than-expected GDP growth was reported in the first quarter, with the economy expanding at 3.2%. Higher exports and inventory purchases offset lower consumer and business demand. Job gains bounced back during the period, with U.S. payrolls growing by 196,000 and the unemployment rate remaining at 3.8%, just above the 49-year low of 3.7%. Earnings season kicked off, with many companies reporting better-than-expected earnings, but overall the S&P 500 is on pace for the first year-over-year decline in earnings since 2016.

Trading

Although TD Ameritrade clients were net sellers of equities, they found some names to purchase during the period. With the IPO market in focus, ride-hailing service company LYFT Inc LYFT was a net buy after the stock traded below its IPO price during the period. CVS Health Corp CVS and Walgreens Boots Alliance Inc WBA were both net buys as both reached 52-week lows. CVS announced a partnership with Smile Direct, but received multiple analyst price cuts. WBA announced it was raising its minimum age to purchase tobacco to 21 in reaction to the FDA's demands for the retailer to do more in curbing underage smoking. Walt Disney Co DIS was net bought after announcing a new streaming service, Disney Plus, and reaching an all-time high. NIO Inc-ADR NIO and Tesla Inc TSLA were both net buys again, with both stocks trading lower during the period. NIO was lower after Volkswagen announced increased competition in China, while TSLA missed on earnings and stated it may need to raise additional capital.

Additional popular names bought include Aurora Cannabis Inc ACB, Canopy Growth Corp CGC, and AT&T Inc T.

TD Ameritrade clients appeared to sell some equities on strength during the period. Facebook, Inc. FB was up nearly 15% during the period following multiple analyst upgrades, and was net sold. Amazon Inc. AMZN beat on earnings and announced a move toward one-day shipping for Amazon Prime members, and was net sold after increasing nearly 10% during the period. Big banks Bank of America Corp. BAC and Citigroup C were both net sold after each company beat on earnings and moved higher during the period. Twitter Inc. TWTR gapped higher during the period to the highest point since last July after the company reported upbeat earnings, and was also net sold. Alibaba Group Holding Ltd BABA was net sold during the period as Amazon announced it will shut down its domestic marketplace business in China.

Additional names sold include Wabtec Corporation WAB, MU, and General Electric Company GE.

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