https://finance.yahoo.com/news/money-losing-retail-crowd-keeps-093000952.html(Bloomberg) -- In a stock market battered by trade turmoil and growing fears of an economic slowdown, retail investors are doubling down, undeterred as their losses mount.
Individual traders pumped more than $12 billion into US equities in the week ending March 19, retail-trading data from JPMorgan Chase & Co. showed. The pace of buying was significantly higher than the group’s 12-month average, according to Emma Wu, a global equity derivatives strategist at the bank.
Market watchers keep a close eye on retail traders as they are often the last to cut their exposure to stocks, so the latest bout of aggressive buying from mom-and-pop investors may suggest that equities haven’t found the bottom yet.
The recent behavior of individual investors is characteristic of a “down” year in the stock market, Wu said. It was also seen in 2022, she noted. That’s when the equity benchmark sank 19%, the only down year of the past six. “This is a hallmark of their ‘buy-the-dip’ mentality,” Wu said.
Comments
From my deleted thread:
This appears to contradict another posted article documenting flows out of U.S. stocks. The difference may lie in the type of investor. Perhaps large / institutional investors have been fleeing while small retail investors remain resilient or double-down?
Personally, I haven’t lost any money this year. Off to one of my better starts. I don’t own much tech or have much exposed to U.S. large cap.
They make it sound like individual investors should just go to cash and sit the market out right now....
Sentiment has been shifting and now we see how the markets digest a trade war.
Retail money is supposedly the "stupid" $$$, but Institutions aren't necessarily "smart" money, IMHO.
What I’d like to know is how much of this buying is passive flow into 401-Ks or other retirement accounts? Is there any data on the percentage of so called “retail investors” still working vs the percent who are retired? A guess would be that a much higher percentage are working and dollar averaging in. However, in terms of actual wealth controlled, retirees may well have the upper hand.
Although I earlier posted the article, it does sound like 90% hype and 10% substance. Shamefully short on details.
From JD_co - ”Thus far, Tech has pulled back after a tremendous run-up.”
Yes. We can thank TSLA for a good part of the market damage. It has lost 50% of its value since mid December.
yep, sentiment indicator is the marginal discretionary, not the auto-indexer flow.
however, relative to auto flows, it would be very interesting to suss out retirement plans trading out of their u.s. indexes.
Yes. The headline is very slanted. How does BB know these retail investors are “losing” money?
Except for the past 2 months they’ve done very well in the S&P or momentum chasing. Two months is a terribly short period to measure investing success.
IMHO - The tide is yet to go out …
BTW at bottom of Article they do not mention that Ives said Muskrat should get out of the Government and go back to running the company, as he has caused this crash
TESLA stock is in a freefall. Its sales are plunging around the world. Even its most avid Wall Street bulls are turning cautious. But one group is buying the electric-vehicle maker’s shares like never before: CEO Elon Musk’s fans.
The company has long had an ardent fan base of individual investors who hang on Musk’s every word on X, the social-media platform he owns. They analyze Tesla in great detail in online forums and largely function as a hype crew for the stock.
But their current level of enthusiasm is staggeringly high, even by recent historical standards. Individual investors have been net buyers of Tesla shares for 13 straight sessions through Thursday, pumping $8 billion into the stock, retail trading data from JPMorgan Chase’s global equity derivatives strategist Emma Wu shows. That’s the biggest inflow over any buying streak since 2015, which is as far back as the data goes.
What makes the buying notable is Tesla’s share price has sunk 17% over this time, wiping out more than $155 billion from its market value.
“Tesla made some rookie to mid-stage public market investors extremely wealthy, a lot of people became millionaires because of this stock,” said Nicholas Colas, co-founder at DataTrek Research. “People don’t forget that. And they will come back to a stock again and again if they feel it has been beaten up.”
Tesla shares have been on a steep slide since mid-December when it touched an all-time high fueled by optimism from Donald Trump’s election victory. But that euphoria vanished, with the stock retreating more than 50% from its Dec. 17 record, making it the second-biggest decliner in the S&P 500 Index this year. The rout has been so brutal that on Thursday, Musk sought to reassure Tesla employees during an all-hands meeting.
What’s become clear is what Wall Street thought would be a boon for the company — Musk’s prominent role in the Trump administration as the head of the Department of Government Efficiency — has instead become an albatross. His growing political presence and involvement with controversies in Europe have triggered a backlash against the company and its leader, with the cars increasingly seen as political symbols. Protesters have thrown Molotov cocktails at Tesla showrooms and vandalized charging stations.
Sales of the Tesla’s cars have sunk in key European markets, such as France and Germany, as well as in China and Australia. Global numbers won’t be available until the company reports its first-quarter delivery figures early next month, but analysts across Wall Street have been aggressively cutting their estimates for sales and profits, citing the bleak data from around the globe.
On Thursday, Morgan Stanley analyst and longtime Tesla bull Adam Jonas lowered his price target on the stock and reduced his sales expectations for the company, citing growing competition, an aging vehicle lineup and a “buyers’ strike from negative brand sentiment.” However, he kept his buy-equivalent rating on the shares, saying the weak near-term expectations are “not particularly narrative changing” for a company whose future depends on robotics and artificial intelligence.
Wedbush analyst Daniel Ives on Friday lauded Musk’s efforts for “hand-holding” employees and investors at a key time, and said that if the CEO continued to lead on his vision, the stock will be on a growth path where 90% of its valuation will be led by autonomous-driving technology and robotics. This bullishness explains at least some of retail traders’ continuing enthusiasm for the shares.
“These kind of investors don’t care about valuations at all,” Colas said. “They just believe in the future of the company and Elon Musk’s abilities.”
Short snippet: ”In an apparent bid to reverse that trend, President Donald Trump publicly praised the car company and committed to buying a vehicle during an event with Musk that saw Tesla cars parked on the White House lawn like at a dealer’s showroom.”
The Cybertruck has MAJOR issues
Nothing that a little glue won't fix...
But other than that, there's just been a couple of minor problems...
And a few excerpts from a report by "Wired":
So there's been a few glitches. What do you want for only $61k (or $99.9k for the high end model)? Give the guy a break- he's been very busy with other important stuff that no voters asked him to do.
Note: Text emphasis added in the AP report.