U.S. retail investors kept buying stocks on Fed day -analysts

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 26, 2022. REUTERS/Brendan McDermid

NEW YORK/MILAN, Jan 27 (Reuters) – Retail investors bought a net of $1.66 billion in equities on Wednesday when a hawkish U.S. Federal Reserve outcome triggered wild gyrations on Wall Street, data from Vanda Research showed on Thursday.

That was the highest figure since a peak on Nov. 30, 2021, when retail investors bought a net of more than $2.2 billion, the report said.

According to Vanda, the top five biggest net purchases on Wednesday were Apple (AAPL.O), the Invesco QQQ exchange-traded fund (ETF) (QQQ.O), AMD (AMD.O), Nvidia (NVDA.O) and Microsoft (MSFT.O).

Retail investors were net buyers earlier in the week as well, after having been net sellers on Thursday and Friday of last week, according to JPMorgan analyst Peng Cheng.

On Monday, when the S&P 500 saw its biggest swing since March 26, 2020, recovering 4.3 percentage points from its session low to the market close, retail traders were net sellers up to 12:30 p.m., Cheng said in a client note from late Wednesday. read more

“However, retail traders turned aggressive buyers again Monday afternoon and bought +$1.3B between 12:30 – 4:00PM. On Tuesday, they continued to buy consistently throughout the day at a pace of $250MM per hour, until the buying flattened in the last hour of the trading day,” he said.

For the week starting last Wednesday until Tuesday, single stocks were sold, while ETFs were bought, with the most popular being S&P 500 trackers and gold ETFs, Peng said. A leveraged long ETF linked to Nasdaq stocks, ProShares UltraPro QQQ (TQQQ.O) was net sold by retail traders, while ProShares UltraPro Short QQQ (SQQQ.O), which shorts Nasdaq-linked stocks, was bought, he added.

In single stocks, retail investors were net sellers of Netflix , which posted disappointing quarterly financial results, as well as of stocks commonly seen to be popular retail names, such as Coinbase (COIN.O), Roblox (RBLX.N), and Peloton (PTON.O), he said.

Reporting by Danilo Masoni in Milan and John McCrank in New York; Editing by Saikat Chatterjee and Jonathan Oatis

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