Day Trader Fever Ticking Back Up in Latest Show of Retail Pluck

They’re back. Or rather, they never went away.

In a market where stock indexes hit record highs almost every other day, a new report from JPMorgan Chase & Co. finds that do-it-yourself investors are jumping back in. Strategists including Peng Cheng studied recent equity and option transactions from retail investors and concluded these prominent players in the yearlong bull market are once again ratcheting up their wagers.

Net buying of stocks from this group averaged $565 million a day last week, ranking in the 92nd percentile of the one-year range. Meanwhile call buying has picked up from recent lows that had prompted speculation the retail army might be in retreat.

Day Trader Fever Ticking Back Up in Latest Show of Retail Pluck

The data is the latest testament to the resilient appetite among a group of investors whose influence has grown in the stock market during the pandemic age. In an E*Trade Financial survey released earlier this week, more individual investors believe the market is “fully or somewhat” in a bubble, and yet they don’t want to miss it.

“Retail flows and confidence, especially these days, are heavily momentum driven,” said Dan Suzuki, Richard Bernstein Advisors LLC’s deputy chief investment officer. “And momentum has been picking up again.”

Equity gains are gathering steam amid better-than-expected economic data and corporate earnings. The S&P 500 is poised for its fourth straight weekly advance, while the Nasdaq 100 on Thursday crossed the 14,000 milestone for the first time in history.

Day traders flocked to technology shares, with the Invesco QQQ Trust (ticker QQQ), an ETF tracking the Nasdaq 100, attracting $70 million last week, JPMorgan’s data show. The ProShares UltraPro QQQ ETF (TQQQ), one that pays investors three times the return of the tech-heavy benchmark, lured $160 million. Apple Inc., Nvidia Corp., Boeing Co. and United Airlines Holdings Inc. were among their most-favored stocks.

“Retail activity appears to be picking up again,” JPMorgan’s Cheng wrote in the note. “AAPL, NVDA and UAL are likely benefiting from a renewed interest in growth names and continued reopening theme,” he said, referring to the companies’ tickers.

Arthur Hogan, chief market strategist at National Securities Corp., said in a phone call that investor sentiment is being fueled by a combination of strong market performance, perceptions that the economic outlook is brighter and the sheer availability of cash. He added that these things are “colliding right now to get retail investors more involved in this marketplace.”

©2021 Bloomberg L.P.

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