Retail Investors Drive Stocks to a Pre-Christmas All-Time High
Meanwhile, the S&P 500 futures ticked downward 0.22% this morning, indicating some traders decided to lock in gains from yesterday’s close.
However, the peak was entirely predictable, given the U.S. Federal Reserve Chair Jerome Powell’s interest rate cut, which delivered a new dose of liquidity.
Consequently, the Nasdaq 100 futures were down 0.51% this morning, premarket, as traders picked winners and losers in the tech sector.
Retail Investors Fuel Market Rally
In addition, retail investors have been driving the market rally, buying into exchange-traded funds and individual tech stocks, according to JPMorgan.
Moreover, retail investors plowed $7.8 billion into stocks in the week up to Dec. 10, above the $6.3 billion weekly average.
Therefore, retail investors probably did very well in the markets this year, as they tended to buy the dips and invested in ETFs and gold.
Wall Street Wary of Retail Investors
However, some on Wall Street are starting to worry about the enthusiasm for risk assets among retail investors.
Meanwhile, the Bank for International Settlements published a paper arguing that retail traders now represent the “dumb money” in the market.
Consequently, Michael Hartnett and his colleagues at Bank of America see it as a sell signal, with their “Bull & Bear Indicator” standing at 7.8, just below the “extreme bullishness” level.
Market Snapshot
However, the markets remain optimistic, with the S&P 500 futures down 0.22% this morning, and the STOXX Europe 600 up 0.37% in early trading.
Therefore, the U.K.’s FTSE 100 was up 0.38% in early trading, and Japan’s Nikkei 225 was up 1.37%.
Meanwhile, China’s CSI 300 was up 0.63%, and India’s Nifty 50 was up 0.51%.
Consequently, Bitcoin went to $92K.
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