U.S. Stocks Have Advanced in Recent Weeks—Without the Help of Retail Investors

Since banking turmoil surfaced, retail investment flows have slid substantially

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U.S. stocks have climbed in recent weeks—no thanks to retail investors, who were largely absent from the market.

Since Silicon Valley Bank's failure on March 10 began to wreak havoc on the U.S. banking system, the S&P 500 Index has gained 8.6%. It fell 0.1% Friday, a day after closing at a year-to-date and nine-month high of 4,198.05.

The rally of the last two months has occurred despite reduced buying from retail investors. According to Vanda Research Ltd., average daily equity purchases from retail investors in that time dropped 27% below the average of the last two years.

Retail net purchases of stocks

Declining purchases of stocks within the financials sector, Vanda said, explains a significant part of the broader dip in retail interest. Yet they still have attracted more net inflows than any sector besides information technology.

Daily trading activity has increased more than 20% in 10 stocks or ETFs in that time. Tech stocks, led by Advanced Micro Devices, accounted for seven of those. The others: Charles Schwab, Bank of America and JPMorgan Chase.

Overall, average daily net inflows into the U.S. stock market have stayed near $900 million for all but one day in the past two weeks ended Thursday. Nevertheless, the S&P 500 increased 3.2% in that time.

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