Schwab clients were net buyers of equities
overall, but on a dollar basis they continued to rotate out of
individual equities and into ETFs, mutual funds, and fixed income
securities
The Schwab Trading Activity Index™ (STAX) increased to 48.37 in
October, up from its score of 47.10 in September. The only index of
its kind, the STAX is a proprietary, behavior-based index that
analyzes retail investor stock positions and trading activity from
Schwab’s millions of client accounts to illuminate what investors
were actually doing and how they were positioned in the markets
each month.
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Schwab Trading Activity Index October
2024 (Graphic: Charles Schwab)
The reading for the four-week period ending October 25, 2024,
ranks “moderate low” compared to historic averages.
“Earnings season has arrived once again, and the EPS ‘beat rate’
for companies that have reported thus far hovers around 79%, which
is slightly better than expected,” said Joe Mazzola, Head Trading
& Derivatives Strategist at Charles Schwab. “Analysts had
lowered S&P 500 earnings estimates for Q3, expecting
year-over-year growth of 4.2%, so while the beat rate is notable,
the bar was also lower. At the top line, companies’ revenue beat
rate appears softer than expected, tracking just above 59%. This
points to cost cutting and margin expansion as the current primary
drivers to earnings growth this quarter. Leadership rotation has
helped the indices preserve bullish trends, but clients continue to
de-risk at the single-stock level, as they rebalance equity
portfolios as well as rotate into fixed income.”
In October, Schwab clients sold strength in some banking and
fintech companies and reduced exposure to select companies that
operate in retail, travel, and hospitality. Schwab clients remained
very interested in the prospects of Artificial Intelligence (AI)
and were net buyers in this space. However, a notable callout is
that Nvidia (NVDA), synonymous with AI, didn’t finish the month as
a net top five buy for the first time since November 2023, even
though it was one of the most actively traded stocks. Activity in
NVDA, on both the buy and sell side, was so evenly matched that on
a net basis it evened out.
More clients were net buyers of equities than net sellers during
the October STAX period; however, clients continued to rotate out
of individual equities and into ETFs, mutual funds, and fixed
income securities, suggesting the trend towards diversification and
de-risking continues, though not to the same degree as the previous
month.
All three major U.S. stock indices made new 52-week and
all-time-highs during the October STAX period, which was notable
considering the backdrop of rapidly ascending interest rates. The
10-year yield finished the STAX period 40-basis points higher.
Improving economic data and a better-than-expected start to the
earnings season perhaps played a part in bolstering market
confidence. Overall, leadership rotation has helped the indices to
preserve bullish trends. On a sector basis, clients were net buyers
of Health Care, Utilities, and Consumer Discretionary. Selling was
most pronounced in Information Technology, Financials, and
Energy.
Economic data, for the most part, showed improvement throughout
the period, and markets primarily reacted well to data. The U.S.
Bureau of Labor and Statistics released its Employment Situation
Summary on October 4, which showed non-farm payrolls increasing by
254,000, beating expectations by more than 100,000. The
unemployment rate fell slightly to 4.1%. The S&P 500 traded up
by more than 50 points following the data release. On October 10,
the Consumer Price Index (CPI) came in better than expected at 2.4%
for the trailing 12 months and the Producer Price Index (PPI) was
unchanged and in-line with expectations. The S&P 500 traded 12
points lower the day of the data release but rose by 35 points the
following day. Final second quarter Gross Domestic Product (GDP)
was in-line at 3%; the primary drivers were increased consumer and
federal government spending, as well as exports.
The CBOE Volatility Index® (VIX) moved higher in October and
closed the period up 19.87%. The 10-year Treasury yield closed at
4.23%. The U.S. Dollar Index also rose, closing 3.82% higher at
104.26. Front month WTI Crude Oil futures rose sharply in the first
half of the period, moderated in the second half, and closed up
5.28%.
Popular names bought by Schwab clients during the period
included:
- Palantir Technologies Inc. (PLTR)
- Amazon.com Inc. (AMZN)
- Microsoft Corp. (MSFT)
- Advanced Micro Devices Inc. (AMD)
- Meta Platforms Inc. (META)
Names net sold by Schwab clients during the period included:
- Alibaba Group Holding Ltd. (BABA)
- Walt Disney Co. (DIS)
- Carnival Corp. (CCL)
- Bank of America Corp. (BAC)
- SoFi Technologies Inc. (SOFI)
About the STAX
The STAX value is calculated based on a complex proprietary
formula. Each month, Schwab pulls a sample from its client base of
millions of funded accounts, which includes 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 STAX.
For more information on the Schwab Trading Activity Index,
please visit www.schwab.com/investment-research/stax. Additionally,
Schwab clients can chart the STAX using the symbol $STAX in either
the thinkorswim® or thinkorswim Mobile platforms.
Investing involves risk, including loss of principal. Past
performance is no guarantee of future results. Content intended for
educational/informational purposes only. Not investment advice, or
a recommendation of any security, strategy, or account type.
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 STAX is not a tradable index. The STAX should not be used as
an indicator or predictor of future client trading volume or
financial performance for Schwab.
About Charles Schwab
At Charles Schwab, we believe in the power of investing to help
individuals create a better tomorrow. We have a history of
challenging the status quo in our industry, innovating in ways that
benefit investors and the advisors and employers who serve them,
and championing our clients’ goals with passion and integrity.
More information is available at aboutschwab.com. Follow us on
X, Facebook, YouTube, and LinkedIn.
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At the Company Margaret Farrell
Director, Corporate Communications (203) 434-2240
margaret.farrell@schwab.com
Charles Schwab (NYSE:SCHW)
Gráfica de Acción Histórica
De Oct 2024 a Nov 2024
Charles Schwab (NYSE:SCHW)
Gráfica de Acción Histórica
De Nov 2023 a Nov 2024
