Schwab Trading Activity Index edges up in October as clients become net buyers
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Galeanu Mihai
The Schwab trading Activity Index (“STAX”), a measure of retail investor stock positions and trading activity from Charles Schwab’s (SCHW) client accounts, rose slightly in October as clients shifted to net buying against a backdrop of a mixed earnings season.
The gauge advanced to 48.37 last month from 47.10 in September. The four-week period ended Oct. 25 ranked “moderate low” relative to historic averages.
“Earnings season has arrived once again, and the EPS ‘beat rate’ for companies that have reported thus far hovers around 79%, which is slightly better than expected, said Joe Mazzola, head strategist at Charles Schwab’s Trading & Derivatives arm.
All three major U.S. stock indices reached new record highs during the October STAX period, despite a notable rise in Treasury yields, as “economic data, for the most part, showed improvement throughout the period, and markets primarily reacted well to data.”
Schwab (SCHW) clients were net buyers of equities during the period, though they continued to rotate out of individual stocks and into exchange-traded funds, mutual funds and fixed-income securities, Mazzola noted, “suggesting the trend towards diversification and de-risking continues, though not to the same degree as the previous month.”
Popular names purchased by clients during the period included: Palantir Technologies (PLTR), Amazon (AMZN), Microsoft (MSFT), Advanced Micro Devices (AMD), and Meta Platforms (META).
Names net sold by clients featured Alibaba Group Holding (BABA), Walt Disney (DIS), Carnival (CCL), Bank of America (BAC), and SoFi Technologies (SOFI).