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US single-stock shopping for by retail buyers are hitting new data, with the Magnificent Seven accounting for greater than 70 per cent of web purchases, in accordance with JPMorgan knowledge.
Whereas ETF inflows have been “minimal” on Tuesday, single-stock buys exceeded sells by $3.2bn, the dealer discovered. That’s about $1bn greater than the second-biggest every day influx on report, in March 2020.
Per the dealer’s newest Retail Radar from JPMorgan’s Emma Wu and staff:
Retail merchants are on observe to interrupt all data. Their every day influx exceeded $2B twice final week – a stage reached solely 9 instances (as of final Friday) up to now 3 years with 5 instances occurring this yr after the Inauguration. The momentum continued this Monday regardless of excessive uncertainty of tariffs, as their shopping for circulation reached $2B by 1:30pm, ending the day with +$3B. They began sturdy on Tuesday, breaking the $2B and $3B thresholds inside the first 1.5hrs and by 1pm, respectively, which have been ~+7.8 sigma above the 1M common for that point of the day, and ending the day with +$4B web imbalance:
JPMorgan’s retail sentiment rating — an AI-powered content material crawler — is as euphoric because it has ever been, on Tuesday transferring a full level greater than memestonk mania in 2021:
The retailers are accounting for 20 and 30 per cent of whole market quantity this yr, which versus historical past is pretty excessive:
You’ll be shocked to be taught: additionally on Tuesday, Institutional buyers net-sold $4bn of equities sand purchased $8bn of choices delta:
What does all this imply for the market? Wu writes:
We discover market typically outperforms following excessive retail shopping for and underperforms after excessive retail promoting in short-term. This indicator turned significantly evident since 2020, and much more pronounced since mid-2023.
By “short-term”, she means two weeks, so the great vibes can’t be trusted to carry for Nvidia’s outcomes on Feb 26.
It’s price noting additionally that earnings season for the Mag7 has been blended up to now . . .
… which continues a longer term trend of ever-decreasing surprises . . .
… and for the year-to-date, the common retail punter have been underperforming the S&P 500. Simply as they did in 2024, 2022, 2021, 2019, 2018, 2016 and 2015:
Nonetheless, somebody have to be having enjoyable. That’s the primary factor.
