Top stocks investors bought and sold in March

JJ Kinahan, TD Ameritrade chief market strategist, joins Yahoo Finance live to discuss TD’s latest Investor Movement Index (IMX) which showed big-name volatility pushed the score higher in March, as well as the biggest names that were bought and sold.

Video Transcript

JULIE HYMAN: JJ, it's good to see you.

JJ KINAHAN: Hey, Julie.

JULIE HYMAN: As you've been alluding to, there has been some chatter that retail traders are kind of pulling back from the market a little bit. We're not seeing the same volume that we were seeing at the beginning of the year when people were spending that tier of stimulus checks. Maybe the latest ones either haven't hit everyone yet, or people aren't spending the money in the market like they were. What are you guys seeing?

JJ KINAHAN: Well, I think, you know, as you see overall volume waning a little bit, Julie, not particularly surprising on a couple of things. Number one, the time of year. A lot of people have spring break. And although this is probably the strangest time we've ever seen in terms of spring breaks, I see-- like, you know, I live in Chicago. O'Hare Airport reporting two Sundays ago they had a day that was almost back to pre-COVID levels.

So I think what you're seeing is it's a break for people from school, maybe from work. So a lot of people are using this time to travel maybe more so than in the past or just get away from their screens for a while. So, again, I think a little bit of this may be cyclical overall in terms of what's going on there. You're seeing volume in the entire market down a little bit over the last couple of weeks.

Also, you know, as some of the stocks get going again, we're near all-time highs. I think that will get people back. But I'm really not too worried about it overall. Because as I said, I think a lot of it is people just want a break, just like you guys have been working, I'm sure, much more hours in terms of where you were before COVID, how you've been working from home.

Because let's face it, it's 7:30, 8 o'clock at night. A lot of times, you're like, you know what? Why don't I go up and finish that thing that I started working on a week ago or a few days ago? So the amount of hours you're in front of a screen has increased dramatically. And I just think people are taking a little bit of a break overall with spring breaks and with their kids being away from the screens also.

BRIAN SOZZI: JJ, when these retail investors, when they do come back into the market after their, I guess, their brief pause, what are they buying?

JJ KINAHAN: Well, Brian, you know, one of the things we've seen in the last two months, it's really amazing, these sort of old standbys. Apple, again, you know, our IMX comes out today. It will show that Apple was once again for the three months in a row being bought. Some of the chip makers being bought, Brian. You know, you're seeing an AMD and an Nvidia being purchased. So I think that you'll continue to see. And as you guys have on the screen right now, Square was one of the other ones that was purchased.

And I think one of the really interesting ones, a name that we just haven't seen in a long time, Walmart. Walmart in March at a six-month low. And with that, our clients came in and purchased Walmart-- not a name you normally see being really something that's sexy, if you will, among retail traders. But that stock last month, really, our clients came for it in a big way when they saw it selling off.

So I think what you'll continue to see, Brian, is as we hit new highs on a lot of stocks, that you'll see those tend to be sold. And ones that have been underperforming or just had a little bit of recent weakness will continue to be bought. And again, Apple, Microsoft tend to be favorites among our clients, really, no matter what the market conditions.

MYLES UDLAND: You know, and JJ, a couple names that are in the basket of names that were lightened up on during the last month, Wells and Citi. And that really gets to the value trade that we've seen play out in the market. And it's really been durable, I think more durable perhaps than some would have expected, going back to November. Just in conversations that you guys are having with clients right now, is there skepticism over how much further this kind of value rotation, really being led by financials and energy, can continue within the market and what kind of dynamics that sets us up for as we get into the second half of the year?

JJ KINAHAN: Well, I think one of the things you're seeing, particularly with the financial [INAUDIBLE], Myles, one of the questions a lot of our clients have is, OK, you know, we've had this nice run on interest rates. It's been amazing. You guys report on it every single day, the amazing 10-year rate move we've had since the beginning of the year. And I think what's happening for a lot of our clients is they hear what the Fed is saying. They see what's going on in the market.

If I look back at last fall, a lot of our clients were buyers of the financials. And I think we're at a point now where they're saying, OK, can rates really get above 1.8 or even up to 2%? So they're taking off some of that risk, taking some profit, having a little bit of a wait and see on the financials to see if we can actually continue on this amazing rate move since the beginning of the year.

I know people look at it and say, 1.7, how exciting is it? But as you guys report all the time, to move more than 90 basis points in a quarter is absolutely amazing, particularly on this percentage move. And I think many of our clients are seeing the conflicting reports coming from the Fed from what they're seeing from the market, and with that, just want to take a step back.

JULIE HYMAN: They also took a step back, JJ, from GameStop. And I wanted to particularly bring up GameStop as well because the company filed this morning to sell up to 3 and 1/2 million shares. They also announced the preliminary sales for the first nine weeks of their fiscal year were up 11% But that doesn't seem to be helping. And the stock is down. JJ, when you look at retail investors' relationship with GameStop and you look at the more recent declines, you know, is GameStop unbalance and that whole parable, if you will, is that unbalance good or bad for the trading business?

JJ KINAHAN: I think anything that heightens people's interest in trading and in their investments is a good thing overall, Julie. Now, is it a bad thing when people go in, just like any other investment, anything you do in life, without understanding, and you just go in and say, I'm going to buy this stock and not know anything about it? That's going to be bad. If you get lucky, good for you. But to go in and make an investment and not understand your risk is a bad thing.

I think a lot has been made about how terrible GameStop and all these other stocks have been for the market. There are two sides to that coin. The good side to this coin-- and we've seen this play out now since COVID began in so many more people are interested in the market, are interested in their investments. And I, along with a lot of my competitors and colleagues for five years, were like, how do we get younger people more interested in the market? Well, they came in, and they came in a big number right away.

So now, the challenge we have-- and hopefully, people are getting the message-- is, please, take time to understand exactly what you're doing. Glad you're interested. Now please understand the risks that you're taking in doing so. And if you do both-- not to say people can't lose money because, of course, that's risk and reward, but let's put the probabilities of reward in your favor overall.