Retail investors show signs of fatigue after last year’s trading frenzy – report

People walk near the New York Stock Exchange (NYSE) in Manhattan, New York City, US, August 9, 2021. REUTERS/Andrew Kelly

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(Reuters) – Retail investors were less enthusiastic about buying U.S. stocks on a dip on Tuesday, Fanda Research analysts said in a weekly note, the latest sign of potential fatigue after last year’s tech-backed trading frenzy.

Individual investors bought $1.6 billion in stocks on Tuesday when US stocks sold sharply after weak results from Goldman Sachs (GS.N) and higher US bond yields.

By contrast, they bought nearly $2 billion on Sept. 28 when the S&P 500 fell 2%.

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“Retail investors bought a lot less than they normally would,” Ben Onatibbia and Giacomo Pirantoni of Fanda said of Tuesday’s session.

“This could be the first sign that retail burnout or give-up has begun, at least in the tech space.”

Vanda’s research note comes as enthusiasm about so-called “meme stocks” appears to wane, after a year of GameStop Corp (GME.N) frenzy when retail investors coordinated online message boards to buy into the heavily-sold stocks.

Friday’s report showed that young investors are losing interest in these “meme stocks,” as Gen Z’s interest shifts to companies in areas such as electric cars and the “metaverse.” Read more

A large share of Tuesday’s buying was concentrated in ProShares UltraPro QQQ (TQQQ.O), a leveraged ETF targeting triple the one-day return on the Nasdaq 100 Index (.NDX), helping cushion the blow from the sector’s massive institutional sell-off. , Vanda analysts said.

Even Microsoft Corp (MSFT.O)’s massive $68.7 billion purchase of “Call of Duty” maker Activision Blizzard (ATVI.O), the largest game industry deal in history, failed to cheer retail investors. Read more

The research house said retail investors were net sellers of Activision on a day when its shares jumped 26%.

Buying at favorite retailers, including Tesla Inc (TSLA.O), Apple Inc (AAPL.O), Advanced Micro Devices Inc (AMD.O) and Nvidia Corp (NVDA.O), also waned, amid tech sell-offs that began last month, according to Vanda Research.

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Additional reporting by Medha Singh in Bengaluru; Edited by Somiadb Chakrabarti

Our Standards: Thomson Reuters Trust Principles.

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