As the S&P 500 gained 2.9% in April, a report from TD Ameritrade shows that its clients were net buyers of equities in April, including Tesla and some defensive stocks.
TD Ameritrade's Investor Movement Index, which is an aggregate of investors' positions and activities, increased to 4.74 in April from March's 4.57. While still low based on historic levels, the index (which goes back to January 2010) shows the brokerage's clients risking more in stocks last month.
According to the brokerage's Managing Director of Investor Education, Lorraine Gavican-Kerr, "TD Ameritrade clients are feeling cautiously optimistic when it comes to the many unknowns the market currently faces." Those unknowns include the debt ceiling and a persistently strong labor market as inflation ticks down.
Investors heavily bought Tesla, Realty Income, Medical Properties Trust and Verizon Communications but sold Facebook parent Meta Platforms, Apple, Microsoft, Advanced Micro Devices and Intel.
Investors sold Meta into strength after its strong rally this year. Shares gained nearly 100% for the year through April 27, when the stock gapped up after earnings. The stock does come with a set of sound technical ratings but investors clearly sold on views that it is due for some pullback after its marathon run.
Investors also were net sellers of other Big Tech names. Apple had gained 30% by of the end of April and investors likely sold ahead of second-quarter earnings on May 4. Apple beat earnings but saw a 2.5% decline in sales from the previous year.
Intel and Microsoft were also stocks investors exited. The chip giant's shares rose after earnings beat views, but are back in a test of the 50-day line. Intel rallied 17% in the first four months of the year. Investors likely also locked in a good part of Microsoft's gain of 28% during the same period.
TD Ameritrade Clients Bought Tesla
Investors bought Tesla as it rallied 33% in the first four months of 2023. Tesla missed revenue views April 19 and earnings declined. Margins fell as the EV giant cut prices to spur demand. Nonetheless, analyst Dan Ives at Wedbush kept an outperform rating with a price target of 215. Shares have been trading in a narrow range after earnings and remain below the 50-day moving average.
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