TD Ameritrade’s Investor Movement Index (IMX) for Singapore fell by 4.14% in September to 4.17 from 4.35 in August.
The IMX is TD Ameritrade’s proprietary, behaviour-based index, aggregating main street investor positions and activity to measure what investors do and how they are positioned in the markets.
The total IMX for all TD Ameritrade clients in September was measured at 4.47, down from 4.82 in August.
“From the Fed’s commitment to taking a hawkish approach to fighting inflation, to big swings in currency values, to mixed US jobs data and crude oil taking a nosedive, retail traders understandably took a risk-off approach in September, leaning into fixed income and investing in names built on solid fundamentals,” explains Greg Baker, CEO of TD Ameritrade Singapore.
“After we saw virtually no change in TD Ameritrade Singapore clients’ exposure to the markets in August, given all the factors in play, they once again lowered exposure in September,” he adds.
Several macroeconomic catalysts drove increased market volatility in September as well, as the S&P 500 retreated 11.63% to a new year-to-date (ytd) low.
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Although jobs growth figures reported by the US Bureau of Labor Statistics at the beginning of the month were in line with street estimates, unemployment rates were noted to have upticked slightly as well.
Nevertheless, the US Federal Open Market Committee (FOMC) continued down its path of monetary tightening and increased the US Federal Funds Rate by another 75 basis points (bps).
Jerome Powell, chair of the Fed delivered a firm commentary on the Fed’s commitment to tackle inflation after the US consumer price index (CPI) showed a more persistent, and hotter than expected, core inflation rate.
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This led the CBOE Market Volatility Index (VIX) to push above 30, a threshold historically associated with high volatility, late in the period.
In addition, US treasury markets observed high volatility, with 10-year yields spiking to decade-high levels and crude oil falling sharply as demand concerns sent commodities spiralling down over 14% during the period.
Another catalyst was currency volatility, as the US dollar continued to climb particularly in contrast to European currencies. The Pound Sterling (GBP) briefly traded near parity with the US dollar after the Bank of England’s emergency intervention to relaunch its bond purchasing program. Additionally, the Euro (EUR) also struggled, spending much of the period below parity with the US dollar as soaring energy prices continued to rock the eurozone.
TD Ameritrade’s Singapore clients net sellers of equities in September
Unlike the overall TD Ameritrade client population, TD Ameritrade Singapore clients were net sellers of equities overall, reads a Oct 12 press release.
TD Ameritrade Singapore clients and the overall TD Ameritrade client population were observed to favour semiconductor giants Nvidia, Intel, and Advanced Micro Devices as the chips subsector underperformed the broad market as a whole. Other popular names bought by both populations include Apple, Microsoft and Amazon.
In September, TD Ameritrade’s Singapore clients net bought Palantir after the company announced new contracts with the US Army Research Laboratory and the US Department of Homeland Security.
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Both TD Ameritrade’s overall and Singapore client populations sold Netflix amid relative outperformance during the period with optimism around the company’s plans to launch an advertisement-supported version of its streaming service driving the stock price higher.
Additionally, while coffee giant Starbucks witnessed greater resilience during this period, considering the return of fall-inspired pumpkin flavoured beverages that effectively increased foot traffic to its retail stores, the stock was net sold by the TD Ameritrade’s Singapore clients.
Despite being net sellers of equities overall, TD Ameritrade Singapore clients were actually net buyers of seven of the S&P sectors: communication services, consumer staples, energy, financials, industrials, information technology and real estate.
Other popular names sold by both the global and Singapore client populations include Morgan Stanley and Alibaba Group Holdings.
