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Reproduced from BCA Research using Bloomberg data; Table: Axios Visuals

A report from BCA Research published Monday finds Robinhood users are moving into speculative bets at an incredible rate, radically increasing holdings in three groups of stocks — airlines, cruise ships and mortgage REITs.

What's happening: "Retail investors have provided institutions with an opportunity to exit stocks in the three stressed groups," Doug Peta, BCA's chief U.S. investment strategist, writes in the note.

  • "Stocks from the groups we highlighted all face daunting current predicaments. They might deliver sizable returns if they can emerge mostly unscathed, but that is a big if."
  • "They have come to account for an outsized share of Robinhood customers’ holdings, especially relative to their market capitalizations."

By the numbers: The number of Robinhood accounts owning airlines, cruise ships and selected mortgage REITs has "exploded since late March," Peta says.

  • The number of Robinhood accounts holding six large- and mid-cap airlines has risen by 48 times its Feb. 19 level, with component holdings of United and Spirit increasing at 87 and 81 times, respectively.
  • The number of Robinhood accounts holding REITS like Invesco Mortgage Capital, MFA Financial and AG Mortgage Investment Trust — which BCA notes "all failed to meet margin calls from their repo lenders and have either suspended or cut dividends" — has risen 93-fold, on average, since the S&P 500 peaked in February.

By contrast, holdings of Apple and the iShares and Vanguard S&P 500 Index ETFs have only doubled since the February market peak.

Of note: The only thing all three groups have in common is that they have fallen significantly in price since the Feb. 19 high.

The big picture: Retail investors may be leading the charge, but the recent surges in many of the stocks BCA examined suggest that "algorithms, hedge-funds and other fast-money pools of capital may be amplifying the momentum that retail activity has set in motion."

Watch this space: Retail traders also could be making up for the lack of stock buybacks, Goldman Sachs strategists argue in a note to clients.

  • While they expect net corporate demand to plunge 80% to $100 billion this year as companies slow down buybacks and ramp up stock sales to increase cash holdings, the decline is being partly offset by a roughly $270 billion increase in demand from households.

Go deeper: Expect lawyers to take aim at Robinhood

Go deeper

S&P 500 on the brink of a correction

Expand chart
Data: FactSet, Chart: Axios Visuals

The S&P 500 hit its highest level ever earlier this month — but as September closes out, the index is teetering on the brink of correction territory.

Where it stands: As of Thursday’s close, the S&P 500 has sunk 9.3% below its record high. Slight gains on Thursday pushed it a bit further away from the 10% decline that would mark a correction — but investors say volatility could be here to stay.

45 million Americans under winter storm watches near New England

Computer model projection showing the winds moving around the powerful East Coast storm on Saturday Jan. 29, 2022. Image: https://earth.nullschool.net

Nearly 45 million Americans are under winter weather alerts and warnings from North Carolina to northeastern Maine, as a major winter storm threatens the region.

Why it matters: It is predicted to be the biggest blizzard since 2018 to strike the Northeast with more than 2 feet of snow possible in parts of eastern Massachusetts, according to the National Weather Service.

2 hours ago - World

Australian PM pledges $700M for climate change-threatened Great Barrier reef

A green sea turtle is flourishing among the corals at Lady Elliot island in Australia's Great Barrier Reef. Photo: Jonas Gratzer/LightRocket via Getty Images

Australian Prime Minister Scott Morrison announced Friday a AU$1 billion ($703 million) investment plan for the Great Barrier Reef.

Why it matters: The nine-year plan for projects including water quality improvement, reef conservation and supporting some 64,000 tourism jobs comes months ahead of this year's federal election. It has been criticized by scientists and environmental groups for failing to tackle climate change.