2023-04-24 12:34:04 ET
Retail investor participation is still very high relative to the last six years but only one sector is luring in more buyers than sellers.
"Retail participation is currently at 10.4% of the total market volume, and at 86th%-ile relative to the last 6 years," Morgan Stanley said. The buy/sell order imbalance "as negative at -0.8% (12th percentile relative to the last 5 years)."
Only Materials ( NYSEARCA: XLB ) saw a positive imbalance at +0.2% vs. a historical median of +0.4% .
Utilities ( XLU ) at -5.5% , Consumer Staples at -3.3% and Consumer Discretionary ( XLY ) at -0.8% were the most negative they've been in their history.
Among the other sectors, Energy ( XLE ) was -0.5% , Industrials ( XLI ) -1.1% , Healthcare ( XLV ) -1.9% , Financials flat, Info Tech ( XLK ) -0.4% , Communication Services ( XLC ) -1.3% and Real Estate ( XLRE ) at -0.4% .
Looking to the broader market, strategist Mike Wilson wrote that "our conclusion that liquidity has been the real driver of higher, more stable prices for the S&P 500 ( SP500 ) ( SPY ) is further supported by the fact that breadth in US equities has rarely been this weak relative to the price of the major index."
"We can see this relative weakness in indices like the Russell 2000 ( RTY ) ( IWM ) and regional banks ( KRE )," he said. "We are challenged to find a period in history during which these indices have underperformed to such a degree while a new bull market was beginning."
"Either the breadth and the relative performance of smalls caps and regional bank indices should improve or we should get the more tactical finishing bear market move lower we expect in the major averages."
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Retail stock investors are negative on all but one S&P 500 sector