Home Knightsbridge Insights The Retail Phenom in the US Stock Markets is Powerful

The Retail Phenom in the US Stock Markets is Powerful


#stocks #retail #traders #investors


Retail investors now account for roughly 10% of daily trading volume on the Russell 3000, the broadest US stocks index, as lockdown and extra savings triggered interest in stock markets, Morgan Stanley said Wednesday.

The retail frenzy from last Summer carried over into Y 2021 with the “meme stocks” like GameStop and AMC Entertainment spiked more than 1,000%, leaving professional traders at a loss and losing billions of dollars.

Morgan Stanley (NYSE:MS) says the phenom has prompted many questions from its clients about how to effectively estimate retail activity.

“We find that retail investors tend to prefer companies in sectors they are likely to be familiar with as consumers, such as consumer discretionary, communication services, and technology,” Morgan said in a note to clients.

Applying its methodologies, Morgan found that over the 5yr frame from July 2016 to June 2021, stocks with high retail participation continued to outperform stocks with low retail participation. And that these traders and investors have bifurcated quality preference, with greatest activity in high quality and junk names.

Meta Material, formerly Torchlight Energy, was the latest name to see huge speculative bets by small individual traders. Clover Health Investments and Koss Corp are other names making headlines on the back if the retail trading action,

Have a positive day, Keep the Faith!

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Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.