Retail traders bought $ 2.1 billion worth of shares in a single day last week – the most on record
- Retail traders bought $ 2.5 billion worth of shares last Friday, a daily record, Vanda Research said.
- Retail inflows came as the S&P 500 had a losing week.
- As retail investors flocked to value stocks, institutional investors pulled back.
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Retail traders bought $ 2.1 billion worth of stocks last Friday alone, a single-day record.
The size of retail purchases last Friday was high compared to the “relatively slight drop” of 1.3% the S&P suffered, Vanda Research senior strategist Ben Onatibia and analyst Giacomo Pierantoni said in a note Wednesday.
“Retail investors tend to buy more stocks on days when the S&P sells. Friday was no exception,” the researchers said.
Millennials are returning to the stock market amid “the recent recovery in portfolios and cryptocurrency rotation,” they said, noting that the group was responsible for the “wild moves in stocks even.”
Meme stocks recently returned to the limelight after retail traders led to a massive rally in AMC Entertainment’s stock price, starting last month. Since then, other meme classics like GameStop and BlackBerry have also been volatile, and new companies, like ContextLogic and Workhorse, and even a small Texas oil driller and biopharmaceutical company have joined the group of retailer favorites. .
While retail investment in equity markets has been significant, most of it has been counter to the flow of institutional investors, analysts said.
For example, last week retail investors flocked into value stocks, while institutional investors did the exact opposite, offloading their massive positions after the Federal Reserve meeting, which announced a schedule of accelerated price increases. interest rate in 2023.
Institutional investors have also focused on technology stocks, while retail demand for the sector has been “very disappointing,” the researchers said.
Retail investors have instead focused on sectors such as finance, materials and energy, which saw combined inflows of $ 1.7 billion in the past two weeks, Vanda said. Sectors such as games, cryptocurrencies, and cannabis stocks have also seen price changes alongside retail inflows.