Key takeaways:

• Tesla sharp sell-off prompts buying activity across the Selfwealth community

• Leveraged ETFs continue to attract significant money flow

US shares faced a wave of selling pressure in December, with the traditional Santa Rally failing to materialise. The bulk of the selling was fuelled by projections from the Federal Reserve that suggest it still has some way to go in raising interest rates, despite easing the pace of said hikes.

Each of the three major indexes incurred large losses last month. The Dow Jones lost 4.2% across the course of the month, the S&P 500 declined 5.9%, and the Nasdaq Composite slumped 8.7%.

Once again, growth shares were the focal point for selling activity, with tech shares susceptible to angst about the interest rate outlook.

Here is a wrap of what the Selfwealth community traded last month.

US share trading activity

Despite share price woes tied to manufacturing issues amid the mass COVID outbreak in China, Apple (NASDAQ: AAPL) and Tesla (NASDAQ: TSLA) were two of the most actively traded stocks in December.

The tech duo ranked third and fourth respectively in terms of trades by value, and both were in the top two by overall trades for the month. Selfwealth members continue to back these major players given their high-profile status, and the fact that both stocks are significantly off their all-time highs. In the case of Tesla, it traded at its lowest level in more than two years.

Elsewhere, leveraged ETFs represent one of the prevailing trends across the community. A number of funds featured in the top 20 for December, including index ETFs like the ProShares UltraPro Short QQQ ETF (NYSE: SQQQ), ProShares UltraPro QQQ (NYSE: TQQQ), ProShares UltraPro Short Dow 30 ETF (NYSE: SDOW), and ProShares UltraPro S&P500 (NYSE: UPRO).At the same time, there was also a high level of trading activity in thematic ETFs that offer leverage. This included the Direxion Daily S&P Biotech Bear 3X Shares (NYSE: LABD), Bank of Montreal MicroSectors FANG Index 3X Inverse Leveraged ETN (NYSE: FNGD), Bank of Montreal MicroSectors FANG Index 3X Leveraged ETN (NYSE: FNGU), Direxion Daily Semiconductor Bull 3X Shares (NYSE: SOXL), and Direxion Daily 20+ Year Treasury Bull 3X Shares ETF (NYSE: TMF).

Since each of these ETFs involve the use of leverage, their presence among the most popular trades suggests a number of investors hold high-conviction views on the outlook of the market, or particular sectors. However, it also safe to say that these views are, for the most part, split down the middle, as the buy-to-sell ratio for money flow in these funds was relatively even.

Switching back to tech, Amazon (NASDAQ: AMZN) was one of the most popular trades last month. Based on money flow, it finished down in 18th spot among the most actively traded US stocks in the Selfwealth community. However, by trade numbers, the stock was the third most traded name for the month. Across both metrics, the buy-to-sell ratio was circa 90%, which suggests investors are overwhelmingly bullish about the company long-term prospects. Other names that made the list include bulk retailer Costco (NASDAQ: COST) and electric vehicle manufacturer Nio (NYSE: NIO), with both garnering attention following trading updates. Costco unveiled slowing sales growth as consumers battle a steep hike in interest rates, while Nio reported mixed results thanks to record deliveries that came at the expense of its margins and swelling losses.Top 20 stocks traded by valueCode SecurityBuy-sell Ratio1SQQQProShares UltraPro Short QQQ ETF50.0%2TQQQProShares UltraPro QQQ50.2%3AAPLApple51.2%4TSLATesla56.8%5GOOGLAlphabet52.5%6MSFTMicrosoft52.7%7BACBank of America51.1%8SDOWProShares UltraPro Short Dow 30 ETF49.5%9CCitibank51.9%10UPROProShares UltraPro S&P50048.8%11LABDDirexion Daily S&P Biotech Bear 3X Shares50.3%12FNGDBank of Montreal MicroSectors FANG Index 3X Inverse Leveraged ETN50.3%13SPXUProShares UltraPro Short S&P50042.6%14NIONio51.3%15COSTCostco99.4%16FNGUBank of Montreal MicroSectors FANG Index 3X Leveraged ETN50.8%17NVDANvidia42.5%18AMZNAmazon88.6%19SOXLDirexion Daily Semiconductor Bull 3X Shares43.7%20TMFDirexion Daily 20+ Year Treasury Bull 3X Shares ETF47.4%

Which US shares are the most held?

Tesla remains the most held stock in the Selfwealth community, but with its share price declining 36.7% throughout December, its advantage over second place Apple has shrunk considerably.  

However, providing further indication as to the extent of buying support in the electric vehicle pioneer, community holdings decreased by a more restrained level than the share price drop. In total, the value of TSLA holdings across the platform fell by 27.4%. The variance highlights the nature with which Selfwealth members were keen to buy the dip. 

Microsoft (NASDAQ: MSFT) is another name where, despite a 6% drop in the tech giant share price, Selfwealth members flocked to support the stock. In fact, it was one of just a handful of shares that recorded an increase in the value of all holdings across the community. The aggregate value of MSFT shares on the platform grew by 3.1% month-over-month, again signifying buying support.As far as other names that showed similar promise last month, Alibaba (NYSE: BABA), Meta Platforms (NASDAQ: META), and Berkshire Hathaway (NYSE: BRK.B) all managed to grow in value over the course of December.

In the case of Alibaba and Meta Platforms, both stocks managed to eke out small share price gains. That came about as investors look towards the potential upside for both stocks given recent developments. 

China reopening is being viewed by some investors as a positive for global e-commerce giant Alibaba. Meanwhile, Twitter share of controversy, which has scared advertisers, may be something that pushes companies to spend more with Meta-owned Facebook and Instagram.

Berkshire Hathaway declined 3% in December, but it is likely that Selfwealth members focused on the stock defensive qualities amid the market sell-off. The company offers exposure to utilities and insurance, two segments which tend to perform well as interest rates rise.   

US StockCompany1TSLATesla2AAPLApple3RYRoyal Bank of Canada4MSFTMicrosoft5GOOGLAlphabet6BRK.BBerkshire Hathaway7AMZNAmazon8BABAAlibaba9GMEGameStop10VOOVanguard 500 Index Fund ETF11METAMeta Platforms12NVDANvidia13ENBEnbridge14ARKKARK Innovation ETF15BCEBCE16AMDAdvanced Micro Devices17TQQQProShares UltraPro QQQ18PLTRPalantir19DISWalt Disney20TDToronto-Dominion Bank

That all for this Trade Trends report, stay tuned for the next edition this time next month!