Weekly Market Overview

Net Selling of U.S. Equities

BofA Securities clients were net sellers of U.S. equities in the final week of August, recording $8.0 billion in outflows. This marks the largest weekly exodus since late 2020 amidst economic uncertainty.

This trend of net selling continued for a second consecutive week, impacting both single stocks and exchange-traded funds (ETFs). According to BofA’s analysis, this affected large, mid, and small-cap stocks.

Client Groups

BofA noted that “All major client groups (ex-corporates) were net sellers for a second week in a row.” The selling was primarily led by institutional and hedge fund clients, while private clients noted their longest recent selling streak at four weeks.

Sector Performance

The tech sector experienced the largest outflows since May, particularly following the post-Nvidia earnings sell-off. The healthcare sector also recorded significant outflows, marking its biggest drop since early July.

Conversely, the communication services sector was the only one to experience inflows, maintaining a buying streak that has lasted 22 weeks.

Ongoing Trends in Energy and Industrials

Energy and industrial sectors faced continued outflows. Energy stocks saw a six-week selling streak while industrials had outflows in seven out of the last eight weeks.

Corporate Buybacks and ETFs

Corporate client buybacks have slowed for the second consecutive week, dipping below seasonal levels as a percentage of the S&P 500 market cap for the second time in 25 weeks. However, buybacks year-to-date showcase a trajectory towards a record year according to BofA’s data.

ETFs also observed their first outflows since June, occurring across seven out of eleven sectors. Materials ETFs noted the highest outflows, but Consumer Discretionary ETFs attracted the most inflows.

In terms of ETF size and style, clients sold off Blend ETFs while continuing to purchase Growth and Value ETFs for the fourth and twenty-fourth consecutive weeks, respectively. Notably, Broad Market and Large/Mid Cap ETFs faced outflows, whereas Small Cap ETFs saw purchases for the third consecutive week.