Small investors returned to the stock markets and stopped the fall


Earlier this week, a sharp fall unfolded in US stock markets, investors were again worried about rising coronavirus cases, and stock markets came under pressure virtually regardless of sector. Google searches for Dow Jones jumped significantly that day, and by that day’s close, the Dow had worked most of the fall and the next day produced the best performance of the past month.

This week’s lesson for everyone on Wall Street who believed day-to-day retail investors blew a retreat, Vanda Research said, poured about $ 2.2 billion into shares on Monday alone.

Even as the impact of stimulus checks issued in the U.S. dwindles and the era of staying at home culminates, the crowd of Reddit-fed, Robinhood-driven small investors remains a force to be reckoned with, partly due to their purchases to another historic peak by the end of the week, the S&P 500 stock index. According to Vanda Research, retail investors came in during Monday’s sell-off.

“The bull market after Covid continues to reward retail investors for taking on equity risk,” said Mike Bailey, research director at FBB Capital Partners. “I expect retail money to continue to flow to the stock markets.”

With its weekly move, the Dow Jones has risen for the fourth time in the past 5 weeks, 1.1 per cent a week, while the S&P 500 has been up 2 per cent.

According to a study by DataTrek Research, Google searches for the Dow are telltale signs ahead of the wave of retail purchases – a pattern that prevailed this week as well.

“Over the years, we’ve found that it’s the most commonly used U.S. search term for anything related to the stock market,” Nicholas Colas and Jessica Rabe wrote in an analysis. “The data show that retail investors have noticed the fall on Monday, and the correction was already a popular topic among them right after the opening on Tuesday.”

(Bloomberg)

Cover image: Michael Nagle / Bloomberg via Getty Images


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