Dow up; S&P 500, Nasdaq slip
Cons Disc leads S&P 500 sector gainers; Comm Srv off most
Euro STOXX 600 index down ~0.6%
Dollar slips; crude dips; gold down >1%; bitcoin up ~2.4%
US 10-Year Treasury yield edges down to ~4.28%
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RETAIL INVESTORS BET ON BROADER MARKET REBOUND AMID APRIL VOLATILITY
Donald Trump's tariff announcements in April saw financial markets at their most volatile in years and institutional investors grow increasingly bearish.
However, many retail investors took the opportunity to bet on a market comeback even as they avoided trying to pick individual winners, said Steve Quirk, chief brokerage officer at RobinHood.
Many of the retail trading platform's customers have moved into exchange traded funds that track the overall U.S. equity market, Quirk said, such as SPDR S&P 500 ETF Trust SPY.P or Invesco's fund tracking the Nasdaq 100 QQQ.P.
"The logic is that when the market's down 20% in a short period of time, (retail investors) have less confidence that they're going to pick the individual name that will rebound and more confidence that the overall market will rebound," Quirk added.
Similarly, Charles Schwab data showed its clients rotating towards broad-based ETFs, seen as less risky than trying to pick stock pick in turbulent markets.
A reluctance to pick individual names hasn't quite extended to the "Magnificent Seven" megacaps, however. Retail investors were happy to snap up those stocks at a discount in April as markets struggled to come to grips with erratic shifts in U.S. trade policy.
"Retail investors don't really have the same limitations (as) institutional investors ... and they have a holding period for as long as they want," said Bret Kenwell, etoro U.S. Investment Analyst.
"If they've learned anything going over the last five years, going back to COVID, stepping in when these markets are tough and volatile has been rewarding. I think they're banking on that same outcome coming to fruition with this."
April 7, when the S&P 500 hit its lowest for the month and the VIX touched an eight-month high - was eToro's highest U.S. trading volume day in over a year, Kenwell said. As per VettaFi data, the SPY ETF pulled in a banner $9.40 billion on April 7.
Charles Schwab clients were net buyers of stocks including Nvidia NVDA.O, Apple AAPL.O, Amazon AMZN.O and Tesla TSLA.O in the first few weeks of April, the brokerage said.
(Purvi Agarwal, Lisa Mattackal)
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WEDNESDAY'S EARLIER LIVE MARKETS POSTS:
MORTGAGE RATES EDGE COOLER, LOAN DEMAND LEAPS - CLICK HERE U.S. STOCKS RISE ON HOPES CHINA TRADE TENSIONS CALM - CLICK HERE
BENCHMARK TREASURY YIELD CRUISING ABOVE THE CLOUD CLICK HERE
CLIMBING THE WALL OF WORRY CLICK HERE
AUSTRIA, GREECE AND NORWAY LOOK PROMISING IF SMID DOWNTURN REVERSES - UBS CLICK HERE
WHEN DOES BIG OIL M&A TEND TO HAPPEN? CLICK HERE
STOXX SUBDUED ON MIXED EARNINGS CLICK HERE
EUROPE BEFORE THE BELL: FUTURES MIXED AS TRADE TALKS, CENBANKS IN FOCUS CLICK HERE
US, CHINA MOVE TOWARDS TRADE TALKS, BUT A DEAL SEEMS DISTANT CLICK HERE
MBA https://reut.rs/4d9kksT
Housing stocks https://reut.rs/4k5Ra01
(Terence Gabriel is a Reuters market analyst. The views expressed are his own)
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