Charles Schwab survey sees ‘staggering’ influx of new merchants, finds best tech option at reopening

A wave of new entrants entered the market during the pandemic, with many feeling optimistic about US stocks in the second half of 2021, according to a new survey by Charles Schwab.

“We’ve seen a huge influx of new traders in the last year and a half,” Barry Metzger, Charles Schwab’s head of commerce and education, said Thursday during a media call about the company’s latest active trader pulse survey. . “It’s really amazing”.

Schwab’s semi-annual survey, which polled 500 US traders who conduct at least 36 stock transactions a year, found that information technology was the most popular choice when asked which three sectors will see the best performance as the market. economy reopens. Forty percent of merchants targeted technology
XLK,
+ 0.98%
,
with healthcare second at 31% and finances
XLF,
-0.74%

ranking third with 30%.

Newcomers and veteran traders spend more time researching before placing their bets, according to Metzger. Roughly two-thirds of traders reported spending at least 5 hours a week researching trades, the survey shows, with online news and commentary, research reports, and broadcast news cited as their top sources of decision aid.

Meme shares, meanwhile, remain popular with traders surveyed by Schwab.

“We saw that almost half of the traders got into the meme stock trend this year,” Metzger said. “We don’t see the meme frenzy going away anytime soon.”

Watch: Welcome to MemeMarkets, your guide to the world of ‘Stonks’

31% of surveyed merchants said they include meme shares in their business plans, while 27% said they participate in them “for fun” and 42% reported investing in meme shares both for fun and as part of your business plans.

Looking at their outlook for the US stock market for the next three months, 35% of traders described themselves as “bullish” and 45% as “neutral,” the survey shows.

That’s not too surprising given the stocks’ strong performance this year, according to Randy Frederick, managing director of trading and derivatives at Charles Schwab.

“One thing that we often find consistently is that most people’s perspective is going to reflect the more recent past,” Frederick said during the media call. “If we are in an uptrend, they tend to believe that the uptrend will continue.”

The S&P 500 Index
SPX,
+ 0.13%

has gained more than 17% this year, while the Dow Jones Industrial Average
DJIA,
-0.19%

returned 14% and the high-tech Nasdaq Composite
COMP,
+ 0.11%

it’s up nearly 13%, according to FactSet data.

Read: ‘Something Will Give’ in US Stock Market Amid ‘Uncomfortable Sentiment Signals’, Citi Warns

The top two concerns for traders were the COVID-19 pandemic and inflation, according to the Schwab survey.

“We’ve been on guard, so to speak, for so many things over the last year and a half,” said JJ Kinahan, chief market strategist for TD Ameritrade, during the press conference. “It always amazes me that we keep hitting new highs.”

Check: The S&P 500 Hasn’t Dipped By At Least 5% In Nearly 200 Sessions – Here’s What The Next Story Says

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