Schwab Trading Activity Index™: Score Moves Fractionally Higher in May, Remaining at Moderate-Low Levels

Rhea-AI Summary

The Schwab Trading Activity Index™ (STAX) rose slightly to 49.05 in May from 48.87 in April, indicating a 'moderate low' activity level. Schwab's clients were net buyers, focusing on technology stocks, especially AI-related chipmakers and e-commerce companies. The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite reached new highs, while the Cboe Volatility Index fell significantly. Despite economic headwinds like a brief rise in the 10-year treasury yield and mixed job reports, U.S. equity markets showed resilience. Notable purchases included NVIDIA (NVDA), AMD (AMD), Tesla (TSLA), Amazon (AMZN), and Microsoft (MSFT). Clients sold stocks such as Apple (AAPL), Alibaba (BABA), Bank of America (BAC), Snap (SNAP), and Exxon Mobil (XOM).

Positive

• STAX increased slightly to 49.05 in May from 48.87 in April.
• Clients were net buyers, increasing exposure to technology and AI-related stocks.
• S&P 500, Dow Jones Industrial Average, and Nasdaq Composite reached new all-time highs in May.
• Cboe Volatility Index dropped from 15.03 to 12.92, indicating reduced market volatility.
• Notable stocks bought included high-performing tech companies like NVIDIA, AMD, and Tesla.

Negative

• STAX remains at a 'moderate low' level historically.
• Nonfarm payrolls increased by only 175,000 in April, below the 243,000 estimate.
• Initial jobless claims were slightly higher than expected at 219,000.
• Consumer Price Index rose 0.3% in April, with a 12-month increase of 3.4%.
• Producer Price Index saw a 12-month rise of 2.2%, reflecting ongoing inflation pressures.
• June Crude Oil Futures declined by nearly 7%, ending at $76.99 per barrel.

Schwab clients were net buyers during the May period, decreasing exposure in the Communication Services, Consumer Discretionary and Financial sectors

WESTLAKE, Texas--(BUSINESS WIRE)-- The Schwab Trading Activity Index™ (STAX) increased to 49.05 in May, up slightly from its score of 48.87 in April. The only index of its kind, the STAX is a proprietary, behavior-based index that analyzes retail investor stock positions and trading activity from Schwab’s millions of client accounts to illuminate what investors were actually doing and how they were positioned in the markets each month.

Schwab Trading Activity Index May 2024 (Graphic: Charles Schwab)

The reading for the five-week period ending May 31, 2024, ranks “moderate low” compared to historic averages.

“As they were in April, Schwab clients were net buyers of equities during the May STAX period as they increased exposure to technology-related names, especially those related to Artificial Intelligence (AI) chip makers and the e-commerce and media companies that rely on them,” said Joe Mazzola, Head Trading & Derivatives Strategist at Charles Schwab. “Despite a significant amount of buzz, we didn’t see any of the so-called ‘meme stocks’ rising to the top of the most bought or sold names in May, although we did note that interest in those names was significantly greater among Schwab’s younger clients than it was across the general client population.”

U.S. equity markets rebounded from the volatile price swings that characterized the April period. Despite headwinds from key inflation measures and a brief spike above 4.60% in the 10-yr treasury yield, the S&P 500, the Dow Jones Industrial Average, and the Nasdaq Composite each notched new all-time highs in May. The Cboe Volatility Index (VIX) reversed direction from the April period, plummeting during the May STAX period from 15.03 to 12.92 - near historic lows. On May third, the U.S. Bureau of Labor and Statistics’ Employment Situation Summary showed nonfarm payrolls increased by 175,000 in April, well shy of the consensus 243,000 estimate, and later in the month on May 30, initial jobless claims came in at 219,000, slightly higher than the 218,000 expected. The unemployment rate was little changed at 3.9%. The Consumer Price Index (CPI) rose as anticipated by 0.3% for the month of April, bringing the 12-month increase to 3.4% before seasonal adjustment. The Producer Price index (PPI) came in at 0.5%, corresponding to a 12-month rise of 2.2%. U.S. Retail Sales was unchanged.

On May 31, Core Personal Consumption Expenditures (PCE) were reported at 2.8% versus expectations of 2.7%. The S&P 500 rose 3.48%, the Nasdaq Composite rose sharply by 5.07%, and the Dow Jones Industrial Average rose 1.7% during the May STAX period. The 10-year Treasury yield fell by 3.32% to close the period at 4.514, but not without a great deal of volatility during the period. The U.S. Dollar Index fell by 0.75%, closing the period at 104.67, and June Crude Oil Futures declined by nearly 7% to close the May STAX period at $76.99 per barrel.

Popular names bought by Schwab clients during the period included:

• NVIDIA Corp. (NVDA)
• Advanced Micro Devices Inc. (AMD)
• Tesla Inc. (TSLA)
• Amazon.com Inc. (AMZN)
• Microsoft Corp. (MSFT)

Names net sold by Schwab clients during the period included:

• Apple Inc. (AAPL)
• Alibaba Group Holding Ltd. (BABA)
• Bank of America Corp. (BAC)
• Snap Inc. (SNAP)
• Exxon Mobil Corp. (XOM)

About the STAX

The STAX value is calculated based on a complex proprietary formula. Each month, Schwab pulls a sample from its client base of millions of funded accounts, which includes accounts that completed a trade in the past month. The holdings and positions of this statistically significant sample are evaluated to calculate individual scores, and the median of those scores represents the monthly STAX.

For more information on the Schwab Trading Activity Index, please visit www.schwab.com/investment-research/stax. Additionally, Schwab clients can chart the STAX using the symbol $STAX in either the thinkorswim^® or thinkorswim mobile platforms.

Investing involves risk, including loss of principal. Past performance is no guarantee of future results.

Content intended for educational/informational purposes only. Not investment advice, or a recommendation of any security, strategy, or account type.

Historical data should not be used alone when making investment decisions. Please consult other sources of information and consider your individual financial position and goals before making an independent investment decision.

The STAX is not a tradable index. The STAX should not be used as an indicator or predictor of future client trading volume or financial performance for Schwab. STAX data includes that from accounts of TD Ameritrade, Inc. clients which have not yet transferred to Charles Schwab & Co., Inc., as part of our planned integration.

TD Ameritrade, Inc., member FINRA/SIPC, a subsidiary of The Charles Schwab Corporation.

About Charles Schwab

At Charles Schwab, we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients’ goals with passion and integrity.

More information is available at aboutschwab.com. Follow us on X, Facebook, YouTube, and LinkedIn.

0624-6NHE

View source version on businesswire.com: https://www.businesswire.com/news/home/20240610213186/en/

Margaret Farrell

Director, Corporate Communications

(203) 434-2240

margaret.farrell@schwab.com

Source: The Charles Schwab Corporation

FAQ

What is the Schwab Trading Activity Index™ (STAX) score for May 2024?

The STAX score for May 2024 is 49.05, up slightly from 48.87 in April.

What sectors did Schwab clients decrease exposure to in May 2024?

Schwab clients decreased exposure in the Communication Services, Consumer Discretionary, and Financial sectors.

Which stocks were most bought by Schwab clients in May 2024?

Popular stocks bought by Schwab clients in May 2024 included NVIDIA (NVDA), AMD (AMD), Tesla (TSLA), Amazon (AMZN), and Microsoft (MSFT).

Which stocks were most sold by Schwab clients in May 2024?

Stocks most sold by Schwab clients in May 2024 included Apple (AAPL), Alibaba (BABA), Bank of America (BAC), Snap (SNAP), and Exxon Mobil (XOM).

How did U.S. equity markets perform in May 2024?

The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite each reached new all-time highs in May 2024.

What was the performance of the Cboe Volatility Index in May 2024?

The Cboe Volatility Index dropped from 15.03 to 12.92, nearing historic lows in May 2024.

What were the U.S. economic indicators in May 2024?

Key indicators included a nonfarm payroll increase of 175,000, a slight rise in jobless claims to 219,000, and a Consumer Price Index increase of 0.3% for April, with a 12-month rise of 3.4%.

What was the performance of crude oil futures in May 2024?

June Crude Oil Futures declined by nearly 7%, closing the May 2024 period at $76.99 per barrel.