S&P 500 futures fell 0.22% this morning, an indicator that some traders decided to lock in gains overnight from yesterday’s close, when the index hit a record high of 6,901. this Peaks are completely predictableThat comes as Federal Reserve Chairman Jerome Powell provided a fresh dose of liquidity as expected by cutting interest rates by 0.25% on Wednesday.
Nasdaq This morning, 100 futures fell 0.51% in pre-market trading as traders picked winners and losers in the technology sector. Oracle Another 1% was lost overnight. After reporting earnings, it fell more than 9% in the past five trading days. the following Anticipation and capital expenditures more than expect. In comparison, Alphabet (GOOG) rose 0.26% in overnight trading.
The bigger picture is that the S&P 500 is up 17.33% year to date.
The trigger for this change was the 175 basis points of interest rate cuts announced by Powell since last year. But the market is also driven by retail investors (individuals, not financial institutions) who buy exchange-traded funds and individual technology stocks, said JPMorgan’s Arun Jain and colleagues.
Retail investors poured $7.8 billion into stocks in the week ended Dec. 10, above the weekly average of $6.3 billion. “Retail investors continue to favor ETFs (+$6.3B) over single stocks (+$1.5B),” they wrote in a note by wealth.
“2025 will be a record year for retail traders in terms of traffic (about 1.9x the 5-year average), 53% above last year’s levels and 14% above the previous peak during the 2021 retail frenzy,” they said.
The J.P. Morgan team says retail investors are likely to do well in the market this year as they tend to buy dips – the market low in April was up 38% from yesterday – they buy ETFs and they also buy gold (up 65% so far this year).
Retail transaction volume has doubled since 2010 According to the Financial Timesindividual investors are now more active than mutual funds and hedge funds.
Retail investors are so enthusiastic about risky assets that some on Wall Street are starting to worry. The Bank for International Settlements – a kind of central bank – recently published a paper arguing that retail traders now represent the “dumb money” in the market.
“Despite the gradual retreat of institutional investors, retail investors have continued to pour money into U.S. equity funds,” the bank wrote. “Demand for precious metals is likely to highlight market participants seeking at least some exposure to safe assets as conditions worsen. But part of the price spike can also be traced to investors seeking price appreciation as they seek to capitalize on the momentum, consistent with increased risk-taking.”
Michael Hartnett and colleagues Bank of America Consider this a sell signal. Their Bull vs Bear Indicator – a measure of “investor fear and greed” based on technical market data such as money flows – is currently at 7.8, just below “extremely bullish” levels, suggesting now may be a good time to cash out:
Here’s a snapshot of the market ahead of the opening bell in New York this morning:
- S&P 500 Index Futures It was down 0.22% this morning. It closed up 0.21% on the previous trading day and hit a new high of 6,901 points.
- Stoxx Europe 600 Index It rose 0.37% in early trading.
- British FTSE 100 It rose 0.38% in early trading.
- Japanese Nikkei 225 Index up 1.37%.
- Chinese CSI 300 up 0.63%.
- South Korea Korea Composite Index up 1.38%.
- Indian nifty 50 up 0.51%.
- Bitcoin rose to $92,000.