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When the calendar flips to May, it can get people thinking about the Kentucky Derby, basketball playoffs, and the Indy 500. This year, none of those hallowed spring events will happen on time, a sad reminder of the pandemic's impact.For investors, there's a little solace knowing that stocks rebounded nicely in April after a historically awful March. While there's no clear sense of when things might get back to normal--particularly as to when the economy might start humming again--some political leaders say we're at the "end of the beginning," in the words of Winston Churchill.The rebound so far reflects a few things, including huge injections of fiscal and monetary stimulus, as well as the market's tendency to look way ahead. For instance, some analysts say participants are already starting to write off the entire 2020 earnings year as a lost cause and focusing on what many expect could be better 2021 results.In May, earnings remain the focus, with tons of major companies due to report. May also is the first month where investors will see data reflecting Q2, which many economists think could show the worst economic cratering since the Great Depression.The human toll of the pandemic remains top of mind as the new month begins, and so does the less-dire-but-still-important concerns about the virus' impact on businesses large and small. How much can the economy open in May? That's a question many hope to get answers to as the month marches on.Many states have already extended "stay at home" orders to late May while others start to stir. Hopes for reopenings in Europe, as well as some U.S. states, gave markets a more positive spin in the last week of April. The pace of reopenings over the next few weeks could play a big part in shaping market progress or lack thereof in the month ahead.Historic Job Losses Expected to Cast a Pall With so much up in the air, let's talk about some things investors can actually hang their hats on, knowing for a fact they'll happen in the new month. For instance, April payrolls data will come out bright and early on Friday, May 8. However, "bright" is likely the wrong word to use anywhere near this report.The March jobs report was bad, but April looks like it might be atrocious. The 701,000 jobs lost in March were probably just the start of the horror movie for U.S. workers, reflecting only the very early days of the economic shutdown.April saw new jobless claims average around 5 million--per week. If all of those show up on the monthly report, job losses in April could reach records. It's not unrealistic to assume the number will be well into the millions. Just a year ago, the economy was humming along creating approximately 200,000 jobs a month. Those days are over, for now.The headline number might get a lot of attention, with job losses likely concentrated in the services sectors. Another line to check in the report is the labor force participation rate. That fell 0.7 percentage points to 62.7% in March, and it's likely to fall more in April.Something to keep in mind about May's data, whether it's payrolls or other numbers, is that data tend to be backward looking. The stock market seems to have taken into consideration a lot of the bad economic news, and the data seem to be reflected in defensive assets like Treasuries, gold, and volatility. If that trend continues in May, we could see stocks shake off the news while bonds and volatility remain elevated.For Clues on Path Ahead, Look To Yields, Small-Caps May looks like it's going to start with 10-year Treasury yields near the all-time lows posted in March. If yields begin to show signs of life, or volatility begins to ease in May, that might be a good benchmark of improved market sentiment.Also, remember to keep an eye on the small-cap Russell 2000 Index (RUT), which history shows can better reflect investors' outlook for the domestic economy. The RUT has been trailing larger-cap indices since the crisis began but outpaced its bigger cousins toward the end of April (see chart below). If RUT gets a lift in May, that would arguably be a very good sign, but it's burdened by having many regional banks in the mix. These banks are particularly vulnerable to the pain of small businesses across the country right now. FIGURE 1: POTHOLES AND RUTS. Pretty much the entire market felt the pain when the coronavirus rattled the world economy in February and March. When markets bounced, however, the small-cap Russell 2000 Index (RUT--candlestick) underperformed the broader S&P 500 Index (SPX--purple line). Data sources: FTSE Russell Indexes, S&P Dow Jones Indices. Chart source: The thinkorswim® platform from TD Ameritrade. For illustrative purposes only. Past performance does not guarantee future results.Mark Your Calendar Here are a few data and events to watch for in April. Economic Events May 1 ISM Manufacturing May 8 U.S. Jobs Report May 12 Consumer Price Index May 13 Producer Price Index May 15 Michigan Sentiment- Prelim May 15 Retail Sales May 19 Housing Starts May 21 Existing Home Sales May 26 New Home Sales May 26 Consumer Confidence May 28 Durable Goods May 29 Michigan Sentiment - Final Build Your Investment Know-How Join us at one of our upcoming webcasts.Webcasts May 1, 4:30 p.m. ET Trading a Smaller Account May 4, 11:00 a.m. ET Getting Started with Technical Analysis May 5, 11:00 a.m. ET Using Options as a Stock Investor May 6, 5:00 p.m. ET Trader Q & A May 7, 12:30 p.m. ET Leveraging Capital with Futures TD Ameritrade Network Mon-Fri, 8 a.m.-9 a.m. (ET) Futures Mon-Fri, 9 a.m.-11 a.m. (ET) Morning Trade Live Mon-Fri, 11 a.m.-12 p.m. (ET) Fast Market Mon-Fri, 12 p.m.-12:30 p.m. (ET) Your First Trade Mon-Fri, 12:30 p.m.-1 p.m. (ET) Virtual Trade Mon-Fri, 1 p.m.-2 p.m. (ET) The Watch List Mon-Fri, 2:30 p.m.-3 p.m. (ET) Mid-Day Movers w/Lichtenstein Mon-Fri, 3 p.m.-5 p.m. (ET) Market On Close TD Ameritrade Network is brought to you by TD Ameritrade Media Productions Company. TD Ameritrade Media Productions Company and TD Ameritrade, Inc. are separate but affiliated subsidiaries of TD Ameritrade Holding Corporation. TD Ameritrade Media Productions Company is not a financial adviser, registered investment advisor, or broker-dealer. You can count on seeing robins outside in May, and you can also count on more earnings. The one thing you can say about Q1 earnings as of late April is that they've been about as bad as people had expected. So far, average S&P 500 earnings are down nearly 15% from a year ago.Checking Earnings for Signals of Resilience There's been some resilience from a few sectors, including Healthcare and Information Technology, but most companies are pulling guidance amid the uncertainty.Semiconductors have been a bright spot so far, seeding some hope that demand for high-tech products like phones and electric cars could potentially come out on the other side without too much damage. That remains to be seen, but Intel Corporation (NASDAQ: INTC), Micron Technologies, Inc. (NASDAQ: MU), and Texas Instruments Incorporated (NASDAQ: TXN) were among the reporting chipmakers that drew some market applause in April. The key chipmaker report to watch in May is Nvidia Corporation (NASDAQ: NVDA), which has big exposure to the gaming business that seems to be doing well with everyone staying home.Weakness in Energy earnings and worries about defaults and bankruptcies in the oil patch have Financials playing defense. The big bank earnings in mid-April showed financial firms taking a cautious approach by putting lots of money aside for future protection against loan defaults. It's hard to have a rally without Financials participating, and for the most part this sector didn't share in the April wealth. Continued weakness in bank stocks could be a big challenge to building on April's market gains.Other key earnings to watch in May include what might be a train wreck in much of the retail sector, but possibly some good news from the big-box retailers and grocery stores. The pandemic could sharpen the growing demarcation between traditional retailers that haven't done such a good job going online, and ones like Target Corporation (NYSE: TGT) and Walmart, Inc. (NYSE: WMT) who have done a good job.On the other hand, investors might not be ready to reward stores for their online sales if "same-store sales," the more traditional metric, don't live up to expectations.TGT found that out the hard way in late April when its shares slipped after it updated investors about recent results. The company said online sales were booming, but same-store sales rose less than expected.Meanwhile, more Communication Services firms prepare to report in May, and that sector's been a relatively calm one in the storm. Results from Netflix, Inc. (NASDAQ: NFLX) and Snap, Inc. (NYSE: SNAP) were both solid. Stay tuned for earnings from game makers Activision Blizzard, Inc. (NASDAQ: ATVI) and Take-Two Software, Inc. (NASDAQ: TTWO) in May.There's no Fed meeting in May because it will have just concluded one at the end of April. Rates aren't likely to go anywhere from near zero, but May could bring other government and Fed action. If stay-at-home orders continue throughout the month across parts of the country, as it looks like they might, Congress could be under pressure to produce more fiscal help for people and businesses affected by the pandemic. You can't rule out another direct injection of assistance, like the $1,200 checks many taxpayers received or will receive soon.Crude was a huge story in April, falling below zero at one point as stockpiles threatened to overflow around the world but especially in U.S. oil country. The front-month June crude futures contract expires May 19, and if there's still a storage problem, it wouldn't be surprising to see more fireworks in the crude market then. Weak crude gave the stock market a hiccup for a few days in April. As of late April, crude was back below $14 a barrel in the U.S., which is historically low.The crude situation remains dicey at best, and for retail investors it comes down to two things: Risk and reward. By trading the crude market now, you might get a small reward, but risk is off the charts. There's nothing wrong with futures trading or markets in general, but arguably this isn't the time or place for inexperienced investors to try their luck with crude.Other things to keep an eye on in May include housing, which is getting pounded during the crisis. Sentiment readings also could be worth a look as the month continues. Consumer spending is two-thirds of the economy, and if sentiment starts to really fall out of bed as May continues, it could point to a longer, slower recovery when this all finally ends.Inclusion of specific security names in this commentary does not constitute a recommendation from TD Ameritrade to buy, sell, or hold.TD Ameritrade and all third parties mentioned are separate and unaffiliated companies, and are not responsible for each other's policies or services.See more from Benzinga * Apple Earnings Ahead: Rough Quarter, iPhone Expectations And Getting Back To Business * Earnings Feast: Bring a Plate With Healthcare and Caterpillar in Morning, GOOGL And AMD Later * Microsoft Q3 Earnings Preview: Eyeing Cloud, Home, And Business Solutions(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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NEW YORK, NY / ACCESSWIRE / May 19, 2020 / Juan Monteverde , founder and managing partner at Monteverde & Associates PC , a national securities firm headquartered at the Empire State Building in New York ...
Key Takeaways * The early focus remains on reopenings, worries about new Asian virus cases * Crude gets a lift from Saudi plan to cut production further * Consumer prices dropped 0.8% in April, in line with analysts' expectations(Tuesday Market Open) Without many directions from overseas markets or new developments, U.S. stocks look like they'll continue taking the path of least resistance Tuesday. Lately, that's been higher, and pre-market trading pointed to more gains.Fresh catalysts are hard to find, which means we could see things drift up as reopenings seem to be going fairly well. This morning's U.S. inflation data and testimony to Congress on COVID-19 from Dr. Anthony Fauci are the main agenda items. Consumer prices for April came in this morning at a negative 0.8%, in line with analysts' expectations.It's kind of like deja vu all over again, as the pace of reopenings and worries about new cases in Asia dominate the news cycle today. Kind of similar to yesterday, when stocks ended up trading both sides of the ledger before closing mixed. Reopenings seem to be going fairly well so far, but it's obviously a small sample size. As long as that continues to be positive, it's possible investors will continue to buy stocks. However, if cases start to increase, look for signs of people selling.Crude prices jumped 5% this morning, possibly getting some assistance from Saudi Arabia and some neighboring countries saying they'll cut production even further. With crude now above $25 a barrel and the Cboe Volatility Index (VIX) rapidly moving below 30 so far this week, it looks like crude and VIX might catch each other. Who would have thought that a month ago when VIX was way above 50 and crude was heading down to ultimately below-zero on the day of the May contract closing.Monday's flat S&P 500 (SPX) close felt kind of bittersweet. While the SPX did recover from losses at the open, the finish near 2930 came after a failure to hold session highs above 2940. The SPX continues to struggle with what might be technical resistance in the 2940-2950 region, and some analysts think a close above 2950 is needed to help squeeze some of the shorts and give the index a quick boost.It could be tough for the SPX to develop that kind of momentum if the Financial sector continues to lag and if the market can't find fresh positive catalysts. With earnings in a lull and data not really too exciting this week, maybe stocks could find themselves in a holding pattern. That looked like the case for many sectors on Monday, with one huge exception.Couch Potatoes Ruling the Roost Stuck at home? So is the stock market, and that's not necessarily a bad thing for investors who positioned themselves to ride this particular wave.The tide continued to roar Monday for so-called "stay at home" companies of all sorts, from cyber-security to semiconductors to gaming to big tech to data centers. This helped keep the Nasdaq (NASDAQ: QQQ) on top of the major indices as it continues to benefit from all the tech stocks that call it home.Some of the leaders Monday included Nvidia Corporation (NASDAQ: NVDA), Activision Blizzard Inc (NASDAQ: ATVI), Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), Zoom Video Communications Inc (NASDAQ: ZM), and Netflix Inc (NASDAQ: NFLX) as the COMP rose about 0.8% for its sixth-straight positive close. AAPL is getting back near its all-time highs, and NVDA posted a new all-time high Monday.Basically, if you can use it to work or get other things done from home, it was up to start the week. What's getting left behind again are the sectors that do better when people are out and about, like Materials, Financials, and Industrials. All those sectors fell 1% or more Monday as the market basically bifurcated.It was a bit of a conundrum seeing Financials flop Monday despite a nice rise in bond yields. The 10-year Treasury yield climbed above 0.7% and is now about 10 basis points above last week's lows ahead of a large auction this week. The track of the 10-year remains a pattern to watch for potential insight into investors' economic hopes. The yield hasn't gone above 0.75% since April 13, so that could be a psychological resistance level. Could a push through that send a positive message through to the bank stocks? It's anyone's guess.Materials and Industrials haven't gotten much of a bid recently as hopes for some sort of U.S. infrastructure passage have faded. Worries that there might not be more fiscal help from Congress could be weighing on this sector. DuPont de Nemours Inc (NYSE: DD) and Caterpillar Inc (NYSE: CAT) were among the big names not having a good Monday. In the bank sector, JP Morgan Chase Co (NYSE: JPM) continues to have trouble getting much traction above $90 a share, an area it's been circling around for weeks.Tomorrow brings producer prices for April. The consensus is for a 0.5% decline in the headline number, according to research firm Briefing.com. However, analysts expect just a 0.2% decline in core prices, which strip out volatile energy and food. Big drops in energy prices might skew the data, though it's worth noting that wherever deflation is coming from, it's not a constructive thing for the economy.Not Getting a Leg Up We're kind of in an earnings dry spell before the big retailers start reporting. Still, one company that opened the books early this week and could be thought of as a sign of the times was medical device maker Zimmer Biomet Holdings Inc (NYSE: ZBH).We've seen a lot of headlines about how the Health Care sector has suffered from a lack of elective procedures like knee replacements as hospital resources get strapped by the pandemic, and ZBH executives offered more evidence. They talked about a deferral of procedures that they expect to continue in Q2, and have withdrawn guidance. Shares of ZBH were down Monday, but have rebounded very nicely from the March lows and are about halfway back to early 2020 highs.Though ZBH didn't seem to please investors with its results, it and other medical device firms like Stryker Corporation (NYSE: SYK) and Medtronic PLC (NYSE: MDT) could be decent barometers in coming weeks and months for a sense of whether hospitals are starting to emerge from the worst of the pandemic.Other earnings are on the calendar later this week, including Cisco Systems Inc (NASDAQ: CSCO) tomorrow afternoon and word from a couple of cruise lines on Thursday. Obviously that industry has been devastated, so hearing from executives could provide some clues about how and whether they expect any recovery. One positive is that millennials still seem interested in taking cruises once they start again, though the question is how older customers might feel.View more earnings on QQQEarnings pick up next week as some of the big-box stores head to the register. That includes Target Corporation (NYSE: TGT) and Walmart Inc (NYSE: WMT).Also on the calendar tomorrow morning: A speech from Fed Chairman Jerome Powell. That could be a chance to hear what else the Fed might have up its sleeve to help the economy recover. The title is "Current Economic Issues," which leaves the subject matter pretty wide open, so be ready for any potential market reaction. CHART OF THE DAY: PULLING UP THE SOX: Though you could argue there's no direct relationship between the two, the recent trend toward lower volatility (VIX--candlestick) happens to correspond with a long upswing in the semiconductors (SOX--purple line). Less volatile times do sometimes encourage investors to put their money into traditionally higher-beta stocks like the ones in SOX. Data Sources: Cboe, Philadelphia Stock Exchange. Chart Source: The thinkorswim® platform from TD Ameritrade. For illustrative purposes only. Past performance does not guarantee future results.VIX in the Mix: During a volatile period nearly a decade ago, The Wall Street Journal ran a cute headline: "No Quick VIX For IPOs." It was true then and true today. When VIX is historically high, few initial public offerings (IPOs) tend to happen. Why not? Partly out of general economic concerns, which tend to rise along with VIX, and also because a choppy market can make it tough to figure out how to price things. That's a huge challenge for anyone planning an IPO, and rough for the big banks that rely partly on IPOs for their revenue.Only 35 companies went public in Q1, according to FactSet. That's down 15% from Q1 2019 and off 35% from Q4 2019. Now comes word that online used-car seller Vroom Inc. has filed confidentially for an IPO it hopes to stage in June, MarketWatch reported.One IPO isn't a trend, but if you start to see more of them hatch, that could be an indication of growing confidence that the most volatile times might be behind us. One positive is seeing the VIX fall well below 30 yesterday as the trend continues lower for that metric.No Guidance? Maybe No Problem: The improved spirits these last few weeks ironically correspond with an earnings season that's seen more and more companies either pull previous guidance, decline to provide new guidance or both. You might be wondering how investors could be rewarding companies that do this, but if you think a bit deeper, it kind of makes sense. Investors seem willing to forgive some uncertainty when there's so much up in the air surrounding the economy as a whole.On the other hand, when companies do put guidance in these confusing times, people can often get skeptical. When a company says, "We don't know, we're leaving it to you to try and decide," people often tend to be a little more optimistic. When companies put hard numbers to it, you have an opportunity as an investor to say, 'There's no way I believe in those numbers.' And so the takeaway some people get is that the company can't possibly beat those, and that tends to generate less enthusiasm.End of May Could Mark an Inflection Point: A big test of the market's optimism looms at the end of this month when a growing list of U.S. states prepare to reopen. At that point, we might find out that things can't just return to normal the way some investors seem to expect. It goes back to the "middle seat" test we referred to a few weeks ago. When things open up, how long will it take for people to feel comfortable sitting in a middle seat on a plane, attending a festival, or going to a ballgame? It could be a long time until planes and stadiums are even close to being back where they were, even assuming virus cases start to drop.Also, if businesses open, it probably won't be all at once. They'll likely be having a few people at a time to start and not the full crew. A big worry for the market is that there's an assumption things can pick up right away, but it's going to take a while for us to get going again. That could set things up for weakness in late May or mid-June. That's the next real test for the market. Optimism meeting reality is what's likely going to happen there.Good Trading,JJ@TDAJJKinahanHelpful Educational Content and Programming Check out all of our upcoming Webcasts or watch any of our hundreds of archived videos, covering everything from market commentary to portfolio planning basics to trading strategies for active investors. You can also deepen your investing know-how with our free online immersive courses. No matter your experience level, there's something for everybody. Looking to stay on top of the markets? Check out the TD Ameritrade Network, live programming which brings you market news and helps you hone your trading knowledge. And for the day's hottest happenings, delivered right to your inbox, you can now subscribe to the daily Market Minute newsletter here. TD Ameritrade Network is brought to you by TD Ameritrade Media Productions Company. TD Ameritrade Media Productions Company and TD Ameritrade, Inc. are separate but affiliated subsidiaries of TD Ameritrade Holding Corporation. TD Ameritrade Media Productions Company is not a financial adviser, registered investment advisor, or broker-dealer.This week's economic calendar. Source: Briefing.com"TD Ameritrade® commentary for educational purposes only. Member SIPC."See more from Benzinga * Cruise Line Earnings Later This Week Could Provide Insight On Brutal Quarter For Industry * Along With Dramatic Jobs Data, Investors Scrutinize Recent Earnings From Uber, Square * GM, Disney, Beyond Meat Results In Focus, With GM And BYND Getting Early Lift(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Interactive Brokers’ new mutual fund platform is a surprising departure from the industry’s focus on ETFs. But investors tired of paying high fees to buy funds from low-cost fund providers like Vanguard and Dodge & Cox now have a cheaper alternative.
(Bloomberg) -- Forget buy-and hold. Stuck at home and dreaming of a killing, bored retail traders are branching out into all manner of Wall Street exotica.Darting in and out of stock options, dabbling in complicated exchange-traded funds, devouring trading how-to books by the dozen -- all have become tools in the self-directed portfolio playbook. Locked down and socially distant with lots of time and (apparently) money to spare, they’re leveraging zero-percent brokerage fees in new and surprising ways.Big shock: Wall Street says it will end badly.“Obviously you’re exposing yourself, depending on how you’re doing it, to catastrophic loss,” said Brian Nick, chief investment strategist at Nuveen. “If you get a lot of investors in either individual securities, companies or investment strategies that they may not have experience with, it could lead to unhappy investors down the road.”Whatever the advisability, individual investors have been a rising force in the $6 trillion stock rebound. Contrary to old-school theories that mom and pop bail at times of market crisis, they piled in this year, lured by free trading and, probably, boredom, with casinos closed and sports betting halted. Besides fretting about its prudence, analysts worry the dynamic is delaying the type of retail-investor washout that many consider necessary to end a serious bear market.The fingerprints of tiny investors are all over the options market. Trades consisting of just one contract now account for 13% of total volume, according to Goldman Sachs Group Inc. analysts led by John Marshall. That supports a view that “individual investor active trading is playing an increased role in market volatility.” In some popular stocks, like Chipotle Mexican Grill Inc. and Alphabet Inc., small options trades account for nearly a third of total volume.Many of the trades are quick ones. Chris Murphy, Susquehanna International Group’s co-head of derivatives strategy, calls the phenomenon “message board trading,” one-day round trips where an investor both opens and closes the position in the same session. Such activity is exploding, especially in stocks like Apple Inc., Stitch Fix Inc. and TripAdvisor Inc.TD Ameritrade Holding Corp. has seen client engagement soar, with requests flooding in for new investing strategies. Visits to the brokerage’s “Education Center” hit an all-time high in April, up 280% from the year prior, with clients downloading explanatory videos and online courses. The most popular classes included stock fundamentals and options trading. Clients gravitated to content showing how to buy and sell stocks using mobile apps, and also on covered calls -- a type of options strategy.“People are still trying to learn to do this better,” said JJ Kinahan, the chief market strategist at TD Ameritrade. “People are just saying, ‘OK, retail is going in and being crazy.’ Well, I think the fact is retail is trading more because they have more time. People actually have time to do so, and that’s why they are more interested.”Driver-Turned-TraderThat’s been true for Ameer Umarov, a cab driver in Arizona with an interest in math and a passion for video games. Months ago, when he realized the coronavirus was growing into a global health crisis, he reactivated his Amazon.com account to make some purchases. Not for masks or hand sanitizer -- for books on stock trading. Two a week, at one point.When equities started surging in late March, Umarov stayed away, scared by the volatility. He was ready to act by the first week of April. He bought shares of Boeing Co., a bad decision that set him back more than $4,000. But a stake in Halliburton Co. brought him $9,800, after he sold shares on the day of a 16% rally late last month. A few other purchases -- Goldman Sachs and Micron Technology Inc., among them -- yielded mixed results. All told, Umarov is down some $400 since he began.“It’s a gamble, but a highly intellectual gamble,” he said by phone. “It’s about knowledge and risk, but especially for guys like me, it’s all about sheer luck.”This month, he stopped buying books and instead signed up for a virtual trading boot-camp. He paid $4,100 for two days of 8 a.m. to 4 p.m. classes, where he learned about concepts like support, resistance, and trading on gaps. To Umarov, the course is a long-term investment, and he’s decided eventually he wants to make trading his full-time job.“I have no idea how it’s going to go,” he said. “But it will be stupid not to try.”Arbitrage ChatroomChris Camillo isn’t your typical retail trader. He starting investing when he was 13 years old. Now 45 in Dallas, he’s turned the original hobby into a full-time job, he says, and created quite the community -- aided by claims of mammoth gains in his TD Ameritrade portfolio. All the while, he was hosting live shows on YouTube, each episode drawing as many as 6,000 viewers, where he explains his method -- what he calls “social arb” trading.On Tuesday he created a chatroom through the site Discord to develop a hub for conversation. It already has over 500 members -- many of them younger.“And, hey, it took a pandemic, but it was already happening before this with Wall Street Bets and cryptocurrency,” Camillo said by phone. “Now they’re wanting to go one layer deeper. OK I did that, I did crypto, OK now I own Tesla, I get it. But there has to be more to investing than just Tesla.”Short on money? Next month Charles Schwab Corp. will allow investors to buy fractions of shares through a mechanism called “slices.” Retail trading platforms Robinhood and Social Finance, popular with investors in their 20s, have launched similar products in the past two years. While many cheer the convenience, some fear it will awaken animal spirits among young investors that aren’t ready for it.“It’s good to get people involved in investing earlier in an efficient way that meets their asset scale,” said Benn Eifert, chief investment officer of QVR Advisors. “From my perspective, the difference is, are you channeling them into the gameification of day trading, into over-confidence, into getting involved in things you don’t understand, or are you channeling that into long-term planning and asset allocation?”The number of investors at Robinhood currently holding the U.S. Oil Fund, the biggest exchange-traded fund invested in oil, stands at 171,000, 20 times the number of users that held the fund in early March, according to website Robintrack, which uses Robinhood’s data to show trends in positioning but isn’t affiliated with it. The popularity of the fund only increased after negative oil prices captivated and confused traders.This past week, FINRA -- a government-authorized non-profit that oversees broker-dealers -- issued a notice on oil-linked exchange-traded products, saying they provide exposure to the oil market through product structures that some investors may not understand. The non-profit called for the ETPs to have a “fair and accurate” communication with the public.“There is a long, documented history of retail investors chasing a handful of story stocks and then getting burned,” said James Pillow, managing director at Moors & Cabot Inc. “We humans love a good narrative. I cannot imagine this time around ending any different.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The Investor Movement Index® (IMXSM) decreased to 3.90 in April, down 6.25 percent from its March score of 4.16. 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.
After two positive quarters in a row, will the third time also be a charm for Tesla, Inc. (NASDAQ: TSLA)?As a whole, analysts see that as unlikely, as the consensus estimate is for the company to post a loss of $0.36 per share when it reports after the close on Wednesday, April 29. But the nature of surprises means you never know when they'll happen--like TSLA's shocker of a Q3 2019 earnings report that showed per-share earnings of $1.86 when market watchers were expecting a loss of $0.42. Last quarter's EPS beat expectations and marked the first time the company reported two consecutive quarters in the black. But that was before COVID-19 forced the company to shut down manufacturing in China and California. With the hit to production coupled with the general economic distress that may cause people to buy fewer cars, it remains to be seen whether TSLA can hit its previous guidance of more than 500,000 vehicles delivered this year. Investors will probably be looking for whether the electric car maker revises that figure in light of COVID-19. Like many other earnings reports this season, when investors tune in to TSLA's results this week, they may be more interested in what management might say about its outlook for the second quarter and beyond than they are in the past quarter's results. If social sentiment is a guide, data from LikeFolio show that purchase intent mentions on TSLA's Model 3 are down 37% versus the year-ago quarter (see figure 1 below). FIGURE 1: DWINDLING INTENT? In Q1 2020, social mentions of Tesla's Model 3 fell 37% versus the same quarter a year ago. Data source: LikeFolio. TD Ameritrade and LikeFolio are separate and unaffiliated companies. Social and consumer sentiment data should not be used alone when making investment decisions. Please consult other sources of information before making an independent investment decision. TD Ameritrade does not guarantee nor is it responsible for the completeness or accuracy of the data provided by LikeFolio.Of course, numbers from the first three months of the year are important too, but it was only toward the tail end of the Q1 that COVID-19 really began to affect the company's production. And in Tesla's case, it has already told investors that it produced more than 102,000 vehicles--and delivered more than 88,000--saying it was the company's best-ever Q1 performance. It said its factory in Shanghai continued to achieve record production levels. In March, TSLA began to deliver its Model Y compact sport utility vehicle.TSLA Manufacturing Plants: Flipping the On/Off Switches March was also the month when the company mostly shut down its manufacturing plant in California, joining other automakers in halting production amid social distancing orders designed to slow the spread of COVID-19 in the United States. But TSLA was also able to reopen its Shanghai factory. Following that reopening, in February, the company reportedly saw registrations jump more than 400% month-on-month in March even as overall auto sales in China fell.At its California plant, TSLA has reportedly asked some staff to return to work in late April, according to media reports. While that news is controversial because of local stay-at-home orders that are still in place, some analysts say the news could be a positive indicator for TSLA shares, as it shows continued demand for electric vehicles during the pandemic. In addition to more details about TSLA's California reopening and delivery outlook, investors are also likely to want to hear more about the company's outlook for the China market and how it sees demand progressing for its new Model Y.Competitive Questions One question is whether TSLA has been able to do better than its competitors amid the pandemic. It could be a case of everybody's sales being down, but TSLA's being down less than everybody else's during the second quarter.That's a question that will probably be on the minds of investors as they try to glean clues to the company's performance--as well as that of the wider auto industry and economy--from any forward-looking comments Tesla's management might give this week beyond just production and deliveries, when it opens its books.View more earnings on TSLAOne potential advantage TSLA might have when reopening its California plant is that it has a more singular focus than other automakers: It only does electric vehicles. That means it may have an easier time restarting production than more traditional manufacturers.And beyond COVID-19, Tesla batteries may offer it a cost edge over competitors looking to take market share in the electric vehicle space. For example, Cairn Energy Research Advisors has reportedly estimated that Tesla's cost per kWh for battery packs is significantly lower than General Motors Company (NYSE: GM), BMW's (OTCMKTS: BMWYY) and Porsche (OTCMKTS:POAHY). And for what it's worth, last year Tesla CEO Elon Musk promised the company would soon have a million-mile battery. In December 2019 the company did file a patent on a new, reportedly stronger lithium ion battery. Tesla Earnings and Options Activity Like many other stocks, TSLA shares sold off hard from mid-February to mid-March amid a broad repricing of equities as investors worried about the economic fallout from the global pandemic. But TSLA has since recovered part of those losses along with the rest of the market. That being said, TSLA shares have had an interesting six months--even before the pandemic hit--from $300 a share, up to the mid $900s, back down to the $300s, and touching $800 on April 27 (see figure 2 below). FIGURE 2: AUTOMOTIVE WHIPLASH. The meteoric rise in shares of Tesla (TSLA--candlestick) in late 2019/early 2020--what many called a bubble at the time--turned around abruptly along with the broader market S&P 500 Index (SPX--purple line) in the coronavirus selloff in March. Since then, TSLA has mounted quite a comeback. Data Sources: NASDAQ, S&P Dow Jones Indices. Chart source: The thinkorswim® platform from TD Ameritrade. For illustrative purposes only.In March, TD Ameritrade clients were net buyers of the stock, according to the Investor Movement Index (IMX), 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.This week, TSLA is expected to report an adjusted loss of $0.36 per share, according to third-party consensus analyst estimates. Revenue is projected at $5.9 billion, up about 30% from a year ago.The options market has priced in an expected share price move of 8.9% in either direction around the earnings release, according to the Market Maker Move™ indicator on the thinkorswim® platform. Looking at the May 1 options expiration, put activity has been scattered, with no particular volume concentrations. Calls have seen more concentration--specifically at the 900 and 1000 strikes. Note: Call options represent the right, but not the obligation, to buy the underlying security at a predetermined price over a set period of time. Put options represent the right, but not the obligation, to sell the underlying security at a predetermined price over a set period of time.TD Ameritrade® commentary for educational purposes only. Member SIPC. Options involve risks and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options.See more from Benzinga * Earnings Feast: Bring a Plate With Healthcare and Caterpillar in Morning, GOOGL And AMD Later * CocaCola, IBM Earnings Under Scrutiny As Both Multinationals Withdraw Guidance, Netflix Later * Bank Earnings, Crude Weigh On The Market, But Signs On Pandemic Front Encourage(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
TD Ameritrade Named One of Fortune’s 2020 Best Workplaces
TD Ameritrade is bringing its award-winning thinkorswim® trading platform to your web browser with thinkorswim Web, a new addition to the thinkorswim suite of platforms. Retail traders can now access thinkorswim equity and derivative trading from any modern internet browser on a new streamlined platform.
TD Ameritrade (AMTD) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.
This will benefit the industry behemoths like Charles Schwab (NYSE: SCHW). The asset manager and brokerage firm has been active on the M&A front and made one of the biggest acquisitions in the space last year, purchasing one of its main brokerage competitors, TD Ameritrade (NASDAQ: AMTD), for $26 billion. Schwab is down about 25% year to date but has outperformed the financial sector.
Exposure to equity markets decreased in TD Ameritrade client accounts for the third month in a row during the April period. The IMX moved lower by 6.25%, or 0.26, from the previous period to reach 3.90.TD Ameritrade clients were net buyers overall for the second month in a row. They were also net buyers of equities, but as volatility among widely held names decreased during the period, the IMX score moved lower. Buying was particularly heavy in the Industrials and Consumer Discretionary sectors. The Cboe Volatility Index, or VIX, which measures volatility of the S&P 500 Index, remained elevated compared to historical levels, but decreased over 45% during the period.The COVID-19 pandemic continued to influence equity markets during the April IMX period, with investors looking for any positive sign that lockdowns were effective. Equity markets rebounded after large losses in March. During the period, the S&P 500 increased 11.6%, with the Dow Jones Industrial Average up 9.9%. The Nasdaq Composite posted the best gains, increasing 15.1%. Volatility was still prevalent, with the S&P 500 moving in excess of +/-1% during 16 of the 19 market days during the period. Early in the month, the Dow industrials posted a daily gain of 1,600 points as investors looked to early signs that stay-at-home orders in the U.S. and Europe may be helping slow the coronavirus pandemic. Unemployment claims reached historic levels as the pandemic stifled economic activity, pushing the total to over 20 million during a one-month period. Oil prices headed lower as demand weakened and entered negative territory. Congressional leaders and the White House reached another stimulus deal, this time for nearly $480 billion in aid for small businesses, hospitals, and additional testing for the coronavirus.Trading Equities were net bought in TD Ameritrade client accounts for the second month in a row on weakness. Airline companies Delta Air Lines, Inc. (NYSE: DAL), American Airlines Group Inc (NASDAQ: AAL), and United Airlines Holdings Inc (NASDAQ: UAL) were all net bought, as each stock traded lower during the period. Each company is set to receive billions of dollars in aid from the U.S. government in the form of payroll support and low-interest loans as the companies suffer from the COVID-19 pandemic. Cruise line operators Carnival Corp (NYSE: CCL) and Royal Caribbean Cruises Ltd (NYSE: RCL) were also net bought. CCL was lower during the period, while RCL was flat, with each company working on plans to reduce operating expenses and capital expenditures in response to lower revenue. Boeing Co (NYSE: BA) was net bought for the second month in a row, with the stock lower by 20% during the period, as the company announced plans to walk away from its proposed $4.2 billion combination with Embraer SA's commercial-aircraft business. Big banks Bank of America Corp (NYSE: BAC) and Wells Fargo & Co (NYSE: WFC) were both net bought. Each stock is significantly lower since the beginning of the year, as both grapple with slowing economic growth and a lower interest rate environment after the Federal Reserve slashed interest rates to 0% last month. Exxon Mobile Corporation (NYSE: XOM) was net bought for the second month in a row. The stock rebounded during the period after crude futures extended their rebound and Treasury Secretary Steven Mnuchin flagged plans to help the troubled sector. Microsoft Corporation (NASDAQ: MSFT) participated in the Tech sector rally, with the stock up over 16%, and was a net buy.Additional popular names bought include Ford Motor Company (NYSE: F), Walt Disney Co (NYSE: DIS), General Electric Company (NYSE: GE), and AT&T Inc. (NYSE: T).TD Ameritrade clients were net sellers of Otis Worldwide Corp (NYSE: OTIS) during the period. The company is one of the five global leaders in elevators and the only elevator pure play in the U.S. stock market, and received an analyst upgrade during the period. Westinghouse Air Brake Technologies Corp (NYSE: WAB), which announced a partnership with Tronix3D to provide much needed personal protective equipment (PPE) for Excela Health, a health system provider of advanced medical care in Pennsylvania, was net sold. Chinese internet companies IQIYI Inc (NASDAQ: IQ) and TENCENT HOLDING/ADR (OTCQX: TCEHY) were both net sold during the period. TCEHY introduced one of its top online games to new markets, from Russia to the Middle East, at a time the Covid-19 pandemic is fueling an unprecedented global gaming boom. IQ introduced a new interactive section on the international version of the iQIYI App for a hit show, and was net sold. Carrier Global Corp (NYSE: CARR), a provider of heating, ventilating, and air conditioning (HVAC), refrigeration, fire, security, and building automation technologies worldwide, received an analyst upgrade and traded higher during the period, and was net sold.Additional names sold include Glu Mobile Inc. (NASDAQ: GLUU) and Corteva Inc (NYSE: CTVA).Inclusion of specific security names in this commentary does not constitute a recommendation from TD Ameritrade to buy, sell, or hold.Historical Overview TD Ameritrade's Investor Movement Index (IMX) has generally correlated with the S&P 500 as clients react to equity price movements, but the index has gone through uncorrelated periods. Beginning in January 2010, when TD Ameritrade started tracking the IMX, the index rose with equity markets until April 2010, when it peaked at 5.40.In May 2010 investors experienced the "Flash Crash" and the IMX began a sharp downward trend. The IMX didn't reach 5.00 again until the S&P 500 was well above April 2010 levels. The index eventually peaked at 5.56 in June 2011. This peak was immediately followed by a plunge in equity markets, and in the IMX, as the media was dominated by the U.S. debt ceiling debate, S&P downgrade of U.S. debt, and European debt concerns. The S&P 500 began to recover in the fall of 2011, but the IMX continued to decline until it reached a new low at the time in January 2012.As the S&P 500 began to sustain an upward trend in early 2012, the IMX started to rise. In 2013, as economic conditions improved and the S&P 500 climbed to record levels, the IMX rose to the high end of its historical range, finishing 2013 at 5.62, and continued to rise in 2014 amid geopolitical tensions related to Ukraine and the Middle East, until seeing slight declines in October and November.By the middle of 2015, the IMX had seen increases, as equity market volatility had reduced to near historical levels while the market continued its upward trend. As 2015 ended its third quarter, volatility had returned to markets, as global economic concerns and speculation around the timing and trajectory of Federal Reserve rate increases seemed to rattle overall equity markets. This uncertainty continued to play a role in the equity markets through the fourth quarter of 2015 and into early 2016. The volatility accompanying this uncertainty abated in the second quarter of 2016 and remained low until late in the third quarter. Just as it had in 2015, the IMX saw increases mid-year during the period of lower volatility. The IMX continued to climb into the fourth quarter reaching 5.83 in October 2016, its highest point in two years. A brief spike in volatility during November, timed around the U.S. presidential election, coincided with a slight pull back in the IMX, which then ended 2016 at the high end of its historical range.The IMX started 2017 with an upward trend and reaching an all-time high in March, before pausing in April as lower volatility lead to a decrease in the IMX. The momentum resumed in May, with the IMX breaching 7.0 for the first time ever in July of 2017. The IMX took another brief pause in September, before following markets higher and breaching 8.0 for the first time ever in November and ending 2017 at an all-time high. Volatility returned to the markets in early 2018, and the IMX decreased for four consecutive months to start the year. The IMX then rebounded in the spring of 2018 and continued higher during the summer on the back of better-than-expected earnings and increasing equity markets. The IMX headed higher during the fall of 2018 as economic growth increased before heading lower in late 2018 as the Nasdaq Composite entered a bear market to end the year.Geopolitical issues were in the headlines during early 2019 as the U.S. and China traded tariffs. The IMX rebounded along with equity markets in the spring of 2019 on optimism of a trade deal with China and the unemployment rate nearing a 49-year low. The IMX remained range-bound during the summer of 2019 as trade-related policy concerns led to investors favoring less-risky assets, including fixed-income products. Heading into the fall of 2019, the IMX began to rebound and ended the year at the highest levels in over a year as trade war fears diminished and economic data began to improve globally. In early 2020, the bull market ended as markets pulled back due to the COVID-19 pandemic, with markets experiencing volatility not seen since the financial crisis of 2008.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.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.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.See more from Benzinga * Bitcoin Halving: What This Rare Event Could Mean for Futures Prices * Investor Movement Index Summary: March 2020 * Circuit Breakers: Learn the Basics of These Market-Wide Pauses(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
TD Ameritrade (NASDAQ: AMTD) announced Wednesday the launch of thinkorswim Web, a browser-based version of its award-winning trading platform.Thinkorswim had previously only been available via download, and the web version is the latest iteration of the software that TD Ameritrade acquired from ThinkorSwim Group in 2009. It marks the company's first browser-based platform since they discontinued Trade Architect last year. The web version of thinkorswim will include most of the same functionality as the download version, and will also be available to the company's clients in Hong Kong and Singapore."Today a lot of the capabilities that exist on a download can't be supported on a web-based version," Steve Quirk, executive vice president of Trading and Education at TD Ameritrade, told Benzinga. "However in a few years they probably will be. So we wanted to have this version out there for when that time comes."'Engagement Has Popped Everywhere'Though Quirk said thinkorswim Web has been in the works for about a year and a half, the timing of the launch is serendipitous. Client activity has surged in the wake of the economic crisis caused by the coronavirus, with the company announcing a record number of new accounts last quarter."Last month we did 3 million trades a day. Six months ago we were doing about 1 million," said Quirk. "Let's go back nine months ago. If we got 1 million trades a day we'd say 'Oh my gosh.' We get 1 million trades a day on mobile some days now. The engagement has popped everywhere."Quirk attributed the increase to a combination of free trading, historic volatility, and people having more time on their hands."Our educational content is getting 3-4x the number of views, and the courses that they're accessing would indicate we have people that are newer to the market," he said.In a press release, the TD Ameritrade cited a commissioned Harris Poll which found that 60% of traders said they need access to their trading accounts 24 hours a day, seven days a week. Quirk said the goal is to meet clients where they are, whether it's in a browser, on your phone, through your smart speaker, or through your car."We just want you to have a similar experience no matter where you are or when it is."On Nov. 26, Charles Schwab (NASDAQ: SCHW) announced its plan to acquire TD Ameritrade for $26 billion. The deal is expected to close in the second half of the year.See more from Benzinga * This New Tool Will Tell You Whether Or Not An Options Spread Is A Good Deal * Oil Volatility Has Driven Demand In The Only 3X US Oil Exchange Traded Products * Watch Benzinga CEO's 'Crazy' XpresSpa Stock Pick Play Out In Real-Time: Video(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Robinhood Markets Inc said on Monday it has raised $280 million in a funding round that valued the online brokerage at $8.3 billion as it benefits from new signups amid increased market volatility and stay-at-home orders due to the coronavirus. The company, which introduced millennials to equities, options and crypto trading, said the latest round was led by existing investor Sequoia Capital. Fintech startups have been attracting a flood of investments since last year and the pandemic is accelerating the trend as more customers look to pay without contact and use banking services without stepping into branches.
Charles Schwab and TD Ameritrade have similar features and product offerings for investors and traders at all levels.
TD Ameritrade's Investor Movement Index (IMX) -- a monthly behavior-based index that indicates the attitude of retail investors -- reached a "Low" ranking in April compared to historic averages. The IMX decreased to 3.90 in April, down 6.25% from its March score of 4.16. Clients were net buyers of stocks in April, but their overall market exposure--measured by trading activity and volatility exposure--went down because of lower beta stocks. In other words, TD Ameritrade clients bought less volatile stocks in April as the market was rebounding off its March lows. "Although our clients lowered exposure overall, the stocks they did buy reflected where they believe consumer demand will return, although many of them may not be short term plays," said JJ Kinahan, chief market strategist at TD Ameritrade.Equity Markets Rebound The April IMX period experienced a rebound after significant losses in March. The S&P 500 increased 11.6%, the Dow Jones Industrial Average was up 9.9%, and the Nasdaq Composite was up 15.1%.The Dow industrials posted a daily gain of 1,600 points early in the month, as investors observed the benefits the stay-at-home order had in both the U.S. and Europe on slowing down infection rates. Those gains came in spite of over 20 million new unemployment claims filed, causing unemployment to reach historic levels.What TD Ameritrade Clients Bought And Sold For the second month in a row, TD Ameritrade clients were net buyers overall. Among the big-name companies that clients bought were: Delta Air Lines, Inc. (NYSE: DAL), Carnival Corp (NYSE: CCL), Boeing Co (NYSE: BA), and Bank of America Corp (NYSE: BAC).And among companies that retail investors sold this month were: Otis Worldwide Corp (NYSE: OTIS), Westinghouse Air Brake Technologies Corp (NYSE: WAB), TENCENT HOLDING (OTC: TCEHY), and Carrier Global Corp (NYSE: CARR)."In April, clients increasingly took the long view with heavy buys in the Consumer Discretionary and Industrial sectors," said Kinahan.Photo by Aditya Vyas on UnsplashSee more from Benzinga * Taking A System Approach To Day Trading With ProTrader Mike * Discussing The Cannabis Market And Changing Regulations With CannGoods * Investing In Cannabis: Achieving Full Scale Production With Morenci Cannabis Park(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
SAN DIEGO, May 07, 2020 -- Shareholder rights law firm Johnson Fistel, LLP has launched an investigation into whether the board members of TD Ameritrade Holding Corporation.