| | | IMX is flat this month at 5.64.
From imx.tdameritrade.com
Monthly summary
Investment exposure in TD Ameritrade client accounts was unchanged during the four-week period ending October 27, 2023, at 5.64. This continues to rank “moderately low” compared to historical averages.
TD Ameritrade clients were net buyers of equities in the October IMX period. Sector buying interest was most notable in Financials, Industrials, and Consumer Discretionary. Selling was strongest within the Information Technology, Energy, and Communication Services sectors.
U.S. equity markets remained under pressure during the October IMX period amidst increased geopolitical uncertainty and rising bond yields. On October 6, the U.S. Bureau of Labor Statistics released the Employment Situation Summary which showed nonfarm payrolls rose by 336,000 in September, widely exceeding street expectations, but the unemployment rate remained at 3.8%. Most of the job gains were in leisure and hospitality, government, and health care. On October 12 the Consumer Price Index (CPI) for September was released, showing prices increased by 3.7% over the past 12 months, in line with street expectations, but still above the Federal Reserve’s 2% target. Just as in the prior period, most of the increase was related to rising costs of fuel and shelter. Indexes related to food and other categories ticked higher by an average of 0.3%, while indexes for used cars and trucks and apparel decreased. A mixed start to the final quarterly earnings season of 2023 showed outsized volatility in a few mega cap tech names, but largely highlighted better-than-expected earnings as cost discipline remains a key theme for many companies.
During the October IMX period, the S&P 500 (SPX) decreased by nearly 4% and the CBOE Volatility Index (VIX) steadily rose to close at 21.27. Perhaps most notably, the 10-year U.S. Treasury yield reached 5% for the first time since 2007, but it was unable to sustain the level for long and retreated slightly to close out the period below 4.9%. The U.S. Dollar Index also continued its ascent closing near 106.50, just off year-to-date highs. December Crude oil futures ended the period near $85 a barrel, down over 5% during the period.
Trading
While investment exposure remained unchanged, TD Ameritrade clients found plenty of opportunities to buy and sell stocks. Clients rotated into mega cap technology, REITs (real estate investment trusts), and big box retailers, as well as stalwarts of large cap value. Realty Income Corp (O) was among their top buys as shares have been under pressure amid rising interest rates and underwhelming corporate earnings. TD Ameritrade clients also bought weakness in Tesla (TSLA) during the October IMX period, following the company’s first earnings miss in nearly 3 years. While Tesla has made improvements in vehicle production, it elected to slash prices, in efforts to increase demand, which has weighed on the company’s margins. Clients also appeared to “buy the dip” in Coca Cola (KO) as it tested a 1-year low near the end of the period. The company beat analyst estimates for both top line (revenue) and bottom line (earnings per share).
Additional popular names bought include Amazon (AMZN), Verizon (VZ), Bank of America (BAC), Nvidia (NVDA), and Rivian (RIVN).
Top names sold by TD Ameritrade clients included Meta Platforms (META), Roblox (RBLX), and Palantir (PLTR). Meta Platforms tested a 52-week high during the October IMX period, and TD Ameritrade clients used this as an opportunity to rotate out of the social media giant. The company beat analysts’ estimates as it continues to execute on a turnaround plan that focused on rather dramatic expense reduction measures and additional investments in their messaging apps aimed at corporate enterprises. TD Ameritrade clients sold Roblox, perhaps expressing some skepticism as it extended a bounce off a September bottom. The Roblox Platform targets a younger demographic of gamers and developers, allows creation and sharing of user-created games and other content, as well as other social interactions. The stock currently trades close to $32 per share with the average of analysts’ price targets at $37 per share. Finally, TD Ameritrade clients sold shares of PLTR as it rallied throughout the first half of the period after announcing a new contract with the Army for its AI capabilities.
Additional names sold include Apple (AAPL), Sea Ltd (SE), UnitedHealth Group (UNH), Qualcomm (QCOM), and Adobe (ADBE).
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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