Bloomberg
Markets
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Retail Army Bets Record $1.5 Billion on Single Stocks in a
Week, JPMorgan Says
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Group’s inflow into single stocks is biggest ever, JPM
says
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Nasdaq 100’s gap above 200-day moving average getting
extreme
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By
Elena Popina
June 21, 2023 at 7:59 PM EDT Updated onJune 22, 2023 at 9:43
AM EDT
If the momentum in US stocks is getting extended, retail investors —
whose risk-on appetite just hit a new high — don’t want to hear about
it.
Undeterred by a rally that had already pushed the S&P 500 up 14% this
year, non-professional investors bought $1.5 billion of single stocks
in the week ending Tuesday, an all-time high, according to data
compiled JPMorgan Chase & Co. strategist Peng Cheng. Flows including
exchange-traded funds and individual stocks topped $4.4 billion, the
data show.
Most of the inflow into single stocks went into just three names —
Tesla Inc., Apple Inc. and Nvidia Corp. — in a bet that a
record-shattering run in the tech-related shares is poised to
continue. The three stocks alone have accounted for 43% of the S&P
500’s gains this year, based on data compiled by Bloomberg.
![](Bloomberg%2020230621%20chart%20x40.png)
Source: JPMorgan Chase & Co. |
Retail traders, the market’s most-avid dip buyers in the post-Covid
rally, are now catching up to this year’s rip in tech-related megacaps
that took many investors more broadly by surprise. How timely the
retail crowd’s foray into these high-flyers is is anyone’s question.
Nvidia is down 1.2% at 9:42 a.m. on Thursday, while Tesla is trading
1.6% lower.
The growing appetite for stock exposure among amateur traders comes as
their professional colleagues were recently forced to abandon their
cautious stance and hop on the buying binge. At Bank of
America Corp., clients put $4.5 billion into US stocks last week, the
most since October, with hedge funds and institutions leading the
inflows. At Goldman Sachs Group Inc., gross leverage among clients is
sitting at a five-year high.
Rising animal spirits among retail investors is showing signs of
extreme sentiment in all things tech and AI. A 36% rally in the Nasdaq
100 Index this year pushed the gauge to trade 24% above its 200-day
moving average earlier this week, a gap seen less than 4% of the time
ever, data compiled by Bloomberg show.
The last time the reading was this high was in late August 2020, which
preceded a 13% drop over the next month. When the reading was this
high for a handful of sessions in September 2009, the Nasdaq 100
proceeded unscathed. Before 2009, the Nasdaq 100 was this disconnected
from its long-term moving average in early April 2000, when the
dot-com boom was starting to go bust.
(Updates
with Thursday equity moves in fourth paragraph.)
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