Everyone knows retail investors dived back into the market as stocks rebounded. Now, evidence is starting to build that their buying has become a key driver of the beaten-down shares that are dominating the rally.

Companies that have been soaring are in many cases the same firms that have seen skyrocketing interest at brokerages popular with individual investors. Turnover is surging: average daily volume for these stocks has occasionally been 30 times what it was in 2019.

Maybe small-time investors are just having a great run of stock-picking, but market watchers are being forced to ask to what degree retail interest has become a self-fulfilling prophesy in many parts of the market. Rallies in companies they’re drawn to are a big part of the broadening gains that on Monday erased the S&P 500’s loss for 2020.

“Some of these names where it’s just pure momentum, they have an outsize impact on the trade,” said John Ham, associate adviser at New England Investment and Retirement Group. “You see much more of an impact on airlines and cruise ships and low-dollar amount names.”

Fascinated with industries that fell most in the coronavirus crash -- airlines, cruise operators, auto sellers -- and egged on by Twitter impresarios and in chat rooms, tiny day traders are betting big on the recovery. And their trading has been at the very least prescient. Lured by zero trading fees, a historic selloff and probably boredom while stuck at home, the group often viewed as “dumb money” opened record new trading accounts in the first quarter. While Wall Street icons denounced the rally, retail traders kept on buying -- a decision that’s paid off as the S&P 500 jumped more than 40%.

Their favorites list includes Norwegian Cruise Line Holdings Ltd., American Airlines Group Inc., United Airlines Holdings Inc., and Carnival Corp. The 10 Russell 3000 stocks that have seen their popularity rise the most over the last month on the Robinhood investing app, according to website Robintrack, are up an average of 93% since early May -- nine times the S&P 500’s return.

Conversely, six of the S&P 500’s 10 best performing stocks over the last month appear on a list of companies that have seen the biggest pickup in interest among users of Robinhood. On the surface of one particularly baffling phenomenon -- firms whose shares are surging despite having filed for bankruptcy -- the fingerprints of retail investors are everywhere.

Turnover in day-trader stocks has spiked, with average daily volume across the 10 companies roughly 20 times higher than what it was in 2019, data compiled by Bloomberg show.

American Airlines, for example, has seen an average 101 million shares change hands each day over the last month -- 23 times what was normal last year. The airline has 423 million shares outstanding, of which 417 million float -- meaning those that are available to the public. Loosely put, that means every American Airlines share publicly available is traded every four days. (Since it’s likely that many of these shares are held for longer periods by institutions, a smaller -- but still sizable -- pool of the company’s stock is trading even more frequently.)

Norwegian Cruise Lines, up more than 100% in the last month, has seen its average daily volume balloon to 73 million -- 37 times the 2019 norm. With 254 million shares in the firm’s equity float, hypothetically every share could be traded in less than four days.

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