Schwab Trading Index hits 4-Year High in June as Retail Investors Buy the Dip | LeapRate
Charles Schwab’s proprietary retail investor sentiment gauge hit its highest level in four years in June, as clients continued to buy market dips despite major indices closing the month with minor losses.
The firm revealed on Monday that the Schwab Trading Activity Index (STAX) rose to 59.12 in June, up 7.33% from 55.08 in May, with net buys outpacing net sells by more than two-to-one across Schwab’s millions of client accounts.
After retreating in the first week, the index rose every subsequent week of the month.
Joe Mazzola, Head Trading and Derivatives Strategist at Charles Schwab, said: “Though major market averages retreated slightly from recent all-time highs in June, closing the month with minor losses, there was no ‘June swoon’ to be found among Schwab clients.”
The heaviest buying is said to have coincided with mid-month market pullbacks during the weeks ended 12 and 19 June.
Information Technology led the net-buy list for the second consecutive month, followed by Communication Services and Consumer Discretionary. Financials, Health Care and Consumer Staples were the most net-sold sectors.
The month was also marked by a shifting Federal Reserve outlook, with the probability of a rate hike later this year rising from 50% at the end of May to nearly 83% by the end of June following Fed Chair Kevin Warsh’s debut.
The most popular stocks bought by Schwab clients included Space Exploration Technologies, Nvidia, Micron Technology, Microsoft and Amazon.
Net-sold names included Berkshire Hathaway, UnitedHealth Group and Snowflake. Generation X remained the most bullish age group, hitting a two-year high, while Generation Z showed the most risk aversion.
