(Bloomberg) – US stimulus controls could trigger a $ 170 billion wave of new retail inflows to the stock market, according to strategists at Deutsche Bank AG.
A survey of retail investors showed respondents planned to invest 37% of their stimulus cash directly in stocks, wrote a team including Parag Thatte in a note on Wednesday. With a potential $ 465 billion of planned direct stimulus, that adds up to $ 170 billion, they said.
“Retail sentiment remains positive across the board, regardless of age, income, or when the investor started trading,” the strategists wrote. “Retail investors say they expect to hold or increase their stock holdings even as the economy reopens.”
A combination of free commercial apps and direct government stimulus has helped fuel a boom in retail equity market share, especially from first-time investors. His influence has started to affect the markets, including the world of options, and trading volumes have exploded.
Democrats are rushing to pass President Joe Biden’s $ 1.9 trillion pandemic aid package without Republican support, a bill that includes checks for $ 1,400 for many Americans. Congress has already authorized two rounds of direct payments, first in March of last year and then in late December.
According to Deutsche, new investors are younger and more aggressive, and are much more likely to trade options frequently compared to more experienced traders. When faced with a hypothetical modest sell-off, the majority of respondents said they would increase their investments, according to the note, although in net terms they would make money if the sell-off exceeded 10%.
Meme Stock Mania Starts Again After GameStop Shares Triple
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