TD Ameritrade Investor Movement Index: IMX Score Increases as 2023 Begins

Clients were net sellers of equities in January, with the strongest selling interest in the Information Technology sector

The Investor Movement Index^® (IMX℠) increased to 4.31 in January, up from its score of 4.17 in December. The IMX is TD Ameritrade’s proprietary, behavior-based index, aggregating Main Street investor positions and activity to measure what investors actually were doing and how they were positioned in the markets.

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Caption: TD Ameritrade January 2023 Investor Movement Index (Graphic: TD Ameritrade)

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

“While there’s still a ways to go before the IMX score reaches the soaring heights it hit in 2020 and 2021, optimism among retail investors is beginning to creep back up as this year begins,” said Shawn Cruz, head trading strategist, TD Ameritrade. “With inflation moderating and volatility projections starting to wane, retail investors are continuing to net sell equities but are also on a whole increasing their market exposure, potentially signaling more appetite for exposure in the months to come.”

January started off with a sharp bounce after the U.S. Bureau of Labor Statistics’ monthly Employment Situation report continued to show an ever-resilient labor market; the unemployment rate stubbornly moved lower to 3.5%, but the report showed an uptick in the participation rate and a slowing pace of wage increases. In the days that followed, the market mostly crept higher until the morning of January 18th when the U.S. Census Bureau’s December Retail Sales data was released, shining light on a disappointing holiday season for retailers. This sent the market into a bit of a tailspin, pushing the S&P 500 down just over 1.5% to its worst finish in the January period. U.S. equities quickly steadied the ship, however, and continued on a “risk-on” course to close out the month, buoyed by optimism from corporate earnings releases from many of the market’s bellwether companies. The S&P 500 (SPX) charted its strongest period of performance since October ’22, finishing up just over 6%. All of this contributed to the CBOE Market Volatility Index (VIX) touching its lowest level since January 2022 before ending the period at 18.51, possibly indicating an increasing comfort with the uncertainties that have plagued the market for the better part of the last year. U.S. Treasury markets rallied alongside equity markets, leading to a decline in yields, and the U.S. Dollar Index continued its recent slide to finish at its lowest level since May 2022. Crude oil saw steep selling early in January but quickly recovered most of its early-month losses to finish down a modest 1.4% during the period.

TD Ameritrade clients were net sellers overall, but they did find individual names to buy during the period, including:

• Tesla Inc. (TSLA)
• Rivian Automotive Inc. (RIVN)
• Ford Motor Co. (F)
• Apple Inc. (AAPL)
• Intel Corp. (INTC)

Names sold during the period included:

• Meta Platforms Inc. (META)
• Boeing Co. (BA)
• American Airlines Group Inc. (AAL)
• Starbucks Corp. (SBUX)
• Netflix Inc. (NFLX)

Millennial Buys & Sells

TD Ameritrade millennial clients also increased exposure during the January IMX period, but like the overall TD Ameritrade client population, they were net sellers of equities.

Both TD Ameritrade millennial clients and the overall TD Ameritrade client population were net buyers of Tesla (TSLA) as the electric vehicle (EV) maker reported earnings and ended its recent run of weakness with a surge of over 44% during the period. This optimism spilled over to another EV maker, Rivian Automotive (RIVN), as both populations were net buyers of the company, seeing opportunity in its early January weakness. TD Ameritrade millennial clients took it one step further and also net bought Lucid Group (LCID) as takeover speculation late in January contributed to a massive run-up of over 88% during the period.

Both TD Ameritrade millennial clients and the overall TD Ameritrade client population were net sellers of American Airlines (AAL), seeing an opportunity to sell into strength as the company soared over 30% following an optimistic update to its guidance forecast early in the month and as it beat street estimates with its earnings on January 26th. TD Ameritrade millennial clients also reduced exposure in United Airlines (UAL) as the Chicago-based airliner also jumped nearly 30%, using the strength as an opportunity to sell.

Although TD Ameritrade millennial clients were net sellers of equities during the January period, they were net buyers of three of the S&P sectors: Health Care, Real Estate, and Utilities.

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 January 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.

About TD Ameritrade

TD Ameritrade provides investing services and education to self-directed investors and registered investment advisors. A leader in U.S. retail trading, we leverage the latest in cutting-edge technologies and one-on-one client care to help our clients stay on top of market trends. Learn more by visiting www.tdameritrade.com.

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