- SERIX® sentiment for the three main US indices rebounded slightly after intensely bearish November
- European investors responded to signs of optimism for US Economy in December
- 123.6 million securitised derivatives were traded on Spectrum last month
Spectrum Markets (“Spectrum”), the pan-European trading venue for securities, has published its SERIX® sentiment data for European retail investors for December, revealing signs of a cautious recovery in sentiment towards US indices after America saw economic boost.
December SERIX® sentiment towards the three major US indices improved noticeably following November’s sharp dip, though fell short of bullish territory. S&P 500 increased from 89 to 95, NASDAQ 100 grew from 93 to 98 and the DOW 30 marginally increased to 96 from 95.
The SERIX® value indicates retail investor sentiment, with a number above 100 marking bullish sentiment, and a number below 100 indicating bearish sentiment. (See below for more information on the methodology).
Market opinion
European retail investor sentiment towards key US indices, as reflected in the associated SERIX® values, showed modest improvement against a backdrop of growing optimism for the US economy.
The growth in confidence followed a rare drop in US inflation after 3.5 years, which led to increased spending, subsequently boosting financial market expectations. The Federal Reserve's indication to cut interest rates for the first time since 2020 likely contributed further to this positive shift in sentiment.
The improvements in the US economy were most notably driven by a service sector boost, with retail also seeing a turnaround, as December data from the US Department of Commerce showed retail sales surpassed expectations. Several economists raised their growth projections for the fourth quarter in response.
“European retail investors displayed extreme bearish sentiment in November across the three major US indices, with the SERIX® for S&P 500, NASDAQ 100 and DOW 30 reaching lows not seen since the summer of 2021. Although still leaning bearish overall, there appeared to be softening of this point of view in December, with less investor pessimism reflected in our SERIX® data as the year concluded,” says Michael Hall, Head of Distribution at Spectrum Markets.
“Despite a more encouraging economic outlook, and a strengthening of the underlying market indices, our data suggests some caution remained among European investors as far as the US was concerned, though the recent easing of financial conditions seems to have prompted a notable shift in retail investors’ trading behaviour,” adds Hall.
Spectrum’s December data
In December 2023, 123.6 million securitised derivatives were traded on Spectrum, with 34.6% of trades taking place outside of traditional hours (i.e., between 17:30 and 9:00 CET).
83.8% of the traded derivatives were on indices, 9.7% on currency pairs, 3.7% on commodities, 2.6% on equities and 0.2% on cryptocurrencies, with the top three traded underlying markets being DAX 40 (28.2%), NASDAQ 100 (23.6%) and S&P 500 (17.4%).
Looking at the SERIX® data for the top three underlying markets, the DAX 40 remained bearish at 97, the NASDAQ 100 increased slightly to 98, similarly with the S&P 500 which saw an increase to a consistently bearish 95.
Calculating SERIX® data
The Spectrum European Retail Investor Index (SERIX®), uses the exchange’s pan-European trading data to shed light on investor sentiment towards current development in financial markets.
The index is calculated on a monthly basis by analysing retail investor trades placed and subtracting the proportion of bearish trades from the proportion of bullish trades, to give a single figure (rebased at 100) that indicates the strength and direction of sentiment:
SERIX® = (% bullish trades - % bearish trades) + 100
Trades where long instruments are bought and trades where short instruments are sold are both considered bullish trades, while trades where long instruments are sold and trades where short instruments are bought are considered bearish trades. Trades that are matched by retail clients are disregarded. (For a detailed methodology and examples, please visit this link).
About Spectrum Markets
Spectrum Markets is a pan-European trading venue for securities aimed at financial institutions and their retail investors. Headquartered in Frankfurt am Main, Germany, and with presence across Europe, Spectrum Markets was designed for transparency, integration and openness while enabling unparalleled access to the markets beyond traditional trading hours with 24/5 on-venue trading for the first time in Europe.
Since launch in August 2019, securities listed on Spectrum Markets have been made available for retail trading in Germany, Italy, France, Spain, Sweden, Norway, the Netherlands, Ireland, Finland, and Cyprus.
Acting as a MiFID II regulated trading venue authorised and supervised by BaFin, Spectrum Markets uses a uniquely open architecture, allowing intermediaries and product providers to offer to retail investors a unique trading experience with increased choice, control and stability.
Being an MTF (Multilateral Trading Facility), Spectrum Markets provides access to innovative products designed to give European retail traders flexibility and control over their trades. This includes Turbo24, the world’s first 24-hour turbo warrant.
Through the pan-European ISIN, 24/5 trading services, intraday issuance and a fully proprietary venue, Spectrum Markets enables a guaranteed baseline level of liquidity over a range of products, is able to swiftly and safely match a significant number of orders, and to process messages with a low latency.
Spectrum Markets publishes SERIX® – the Spectrum European Retail Investor Index – a pan-European client sentiment that informs as to whether retail investors have speculated on a bullish or bearish view on a specific underlying. SERIX® is a measure based on trades made by retail investors across Europe which can be used to compare how sentiment has changed (in terms of directionality or strength of sentiment) over time on a monthly basis.
Spectrum Markets is a wholly owned subsidiary of IG Group (LSEG: IGG).
Further information can be found at spectrum-markets.com
Media contact
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E-Mail: vasiliki@liminalcomms.com
Disclaimer
All information contained herein is for information purpose only and addresses exclusively Members of Spectrum Markets and persons interested in becoming a Member of Spectrum Markets. Nothing herein constitutes an offer to sell or a solicitation of an offer to purchase any securitised derivatives listed on Spectrum Markets or any product described herein. Spectrum Markets does not provide financial services, such as investment advice or investment brokering. Prospective retail investors can trade such products only with their brokers. The information herein does not constitute investment advice or an investment recommendation. Any information provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it.
