Schwab Trading Activity Index™: Score Ascends to Moderate Levels in March

Schwab clients were net buyers in March, with the most pronounced buying within the Information Technology, Health Care, and Consumer Staples sectors

The Schwab Trading Activity Index™ (STAX) increased to 51.65 in March, up from its score of 47.65 in February. The only index of its kind, the STAX is a proprietary, behavior-based index that analyzes retail investor stock positions and trading activity from Schwab’s millions of client accounts to illuminate what investors were actually doing and how they were positioned in the markets each month.

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Schwab Trading Activity Index March 2024 (Graphic: Charles Schwab)

The reading for the four-week period ending March 28, 2024 ranks “moderate” compared to historic averages and marks the highest reading since May 2022.

“In the face of undeniably mixed macroeconomic data, the markets soared this month, and the STAX score continued its rise in step,” said Joe Mazzola, Director of Trading and Education at Charles Schwab. “Despite the market highs, however, Schwab clients remain in the moderate range of market exposure as measured by the STAX. They net bought equities in March, but we continue to see that retail investors are engaging in strategic, thoughtful buying. There’s palpable enthusiasm when it comes to names related to technology, for example, but clients also found areas to moderate and trim exposure.”

U.S. equity markets continued to rally and reached new all-time highs during the March STAX period despite key data pushing back against the narrative that Fed rate cuts could begin as early as May. On February 29, initial jobless claims came in at 215,000, slightly higher than expected, and the U.S. Bureau of Labor and Statistics’ Employment Situation Summary released on March 8 showed that nonfarm payrolls increased by 275,000 in February - significantly better than expected. However, the unemployment rate increased to 3.9%, higher than the anticipated 3.7%. The Consumer Price Index (CPI) rose, as anticipated, by 0.4% for the month of February, bringing the 12-month increase to 3.2% before seasonal adjustment, while the Producer Price index (PPI) came in much higher than expected at 0.6% vs expectations of 0.3%. U.S. Retail Sales for February increased 0.6% from the previous month, slower than an expected increase of 0.8%.

On March 20, U.S. Federal Reserve Chairman Jerome Powell indicated that despite recent readings, inflation is gradually decreasing, although confidence as to the timing of achieving the target rate may be understandably shaky. This was reflected in the month’s Consumer Confidence reading, which dipped below expectations and February’s reading in at 104.7. But traders seemed to move past any lingering worries over recession or a meaningful stock market pullback as they drove both the Nasdaq® and S&P 500® to soaring new heights. Meanwhile, the CBOE Volatility Index (VIX) declined from 13.75 to 13.01, low by historical measures, as the 10-year Treasury yield exhibited a bit of its own volatility trading within a 30-basis point range before settling basically unchanged. The U.S. Dollar Index, too, was barely changed, closing at 104.55. May Crude Oil Futures, however, rose sharply by 8.7% and closed the March STAX period at $83.17.

Popular names bought by Schwab clients during the period included:

• NVIDIA Corp. (NVDA)
• Tesla Inc. (TSLA)
• Apple Inc. (AAPL)
• Advanced Micro Devices Inc. (AMD)
• Palo Alto Networks Inc. (PANW)

Names net sold by Schwab clients during the period included:

• Coinbase Global Inc. (COIN)
• Walt Disney Co. (DIS)
• PayPal Holdings Inc. (PYPL)
• Block Inc. (SQ)
• Netflix Inc. (NFLX)

About the STAX

The STAX value is calculated based on a complex proprietary formula. Each month, Schwab pulls a sample from its client base of millions of funded accounts, which includes accounts that completed a trade in the past month. The holdings and positions of this statistically significant sample are evaluated to calculate individual scores, and the median of those scores represents the monthly STAX.

For more information on the Schwab Trading Activity Index, please visit www.schwab.com/investment-research/stax. Additionally, Schwab clients can chart the STAX using the symbol $STAX in either the thinkorswim^® or thinkorswim Mobile platforms.

Investing involves risk, including loss of principal. Past performance is no guarantee of future results.

Content intended for educational/informational purposes only. Not investment advice, or a recommendation of any security, strategy, or account type.

Historical data should not be used alone when making investment decisions. Please consult other sources of information and consider your individual financial position and goals before making an independent investment decision.

The STAX is not a tradable index. The STAX should not be used as an indicator or predictor of future client trading volume or financial performance for Schwab. STAX data includes that from accounts of TD Ameritrade, Inc. clients which have not yet transferred to Charles Schwab & Co., Inc., as part of our planned integration.

TD Ameritrade, Inc., member FINRA/SIPC, a subsidiary of The Charles Schwab Corporation.

About Charles Schwab

At Charles Schwab, we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients’ goals with passion and integrity.

More information is available at aboutschwab.com. Follow us on X, Facebook, YouTube, and LinkedIn.

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