Despite a 1.4% gain in the S&P 500, clients of Bank of America Securities were net sellers of U.S. equities last week, offloading $4.6 billion after two weeks of inflows.
According to a Tuesday report, clients mainly sold individual stocks while buying equity exchange-traded funds (ETFs). Large and mid-cap stocks experienced outflows, whereas small caps attracted inflows for the fourth consecutive week.
Institutional and hedge fund clients led the selling, reversing their buying trend from the previous week, while private clients continued to be net sellers for the third week.
Meanwhile, corporate client buybacks slowed down, falling below seasonal levels as a percentage of the S&P 500 market cap for the first time in 24 weeks. Year-to-date, buybacks as a percentage of market cap “are still on pace for a record year in our data history,” BofA said.
Clients sold stocks across seven sectors, with Technology seeing its first outflow in three weeks and Consumer Discretionary experiencing its first outflow in six weeks. On the other hand, Communication Services and Utilities received the largest inflows, with Communication Services maintaining the longest buying streak at 21 weeks.
Energy stocks have faced continuous selling for five weeks, and Industrials have seen outflows in six of the past seven weeks.
Meanwhile, ETF inflows continued for the third consecutive week across all investment styles and all market sizes except mid-caps. Unlike individual stocks, Technology ETFs attracted the most inflows, while Energy ETFs experienced the largest outflows.
The U.S. stocks ended last week in the green, boosted by Federal Reserve Chair Jerome Powell’s comments which suggested that interest rate cuts are on the way.
