To The Moon

The final week of 2022 saw a sharp sell-off in US stocks. According to JP Morgan, retail investors sold a total of $3.1 billion of securities in the final week of last year. This was the third highest net sales week on record. Among individual stocks, retail investors sold off $Tesla (TSLA)$, with a net outflow of $881 million over the week, the largest single week of institutional outflows ever for the stock, as well as technology stocks such as $Nvidia (NVDA)$ and $Apple (AAPL)$.

According to JP Morgan strategists, in addition to bearish sentiment, year-end tax loss selling may have been a major factor and led to significant retail outflows in December this year. However, it is impossible to ignore the fact that retail investor sentiment towards Tesla stock has changed. According to Ape Wisdom, TSLA has been a popular topic on r/WallStreetBets for the past 24 hours, with overall popularity at 52%, mentions down 38% and likes down 50%.

Specifically, net retail sales for the week included $4.1 billion in net sales of individual stocks, $630 million in net purchases of U.S. equity ETFs and $400 million in net purchases of fixed income ETFs. ETF orders for the major US equity indices were below average.

However, demand for commodities ETFs was above average in the last week of last year.

On the individual stock front, the largest retail seller was Tesla, with net outflows of $881 million over the week. This is the largest single week of net retail outflows ever for the stock.

Apart from Tesla, shares of technology companies were also widely traded by retail investors. Among them, Nvidia was sold for $213 million, while Apple and AMD were sold for $184 million and $167 million respectively.

Retail investors traded options in the last week of last year with a notional value of $364 million sold for Delta and $1.7 billion bought for Gamma. They continued to trade heavily in 0-day options on the S&P 500, which led to a $2.1 billion increase in the Gamma imbalance. In addition, they also sold a net $94 million in QQQ, a well-known ETF, and a net $59 million in IWM.

From the perspective of institutional investors, the last week of trading last year was much quieter, but still saw net outflows. These were recorded in net outflows of US$8.7 billion, with the largest net outflows being in equity futures, totalling US$3.6 billion.

All three major US stock indices closed lower last year, with the Dow Jones Industrials down 8.78% for the year, the S&P 500 down 19.44% and the Nasdaq Composite the third worst annual performance in history, closing down 33.1%. The annual performance of US stocks was the worst year since the financial crisis.$Invesco QQQ Trust(QQQ)$ $iShares Russell 2000 ETF(IWM)$