U.S. Equities Selling Trends

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.

Client Activity

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.

Selling Breakdown

• Institutional and Hedge Fund Clients: Led the selling, reversing their buying trend from the previous week.
• Private Clients: Continued to be net sellers for the third week.

Corporate Buybacks

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 noted.

Sector Performance

Clients sold stocks across seven sectors:
– Technology: Experienced its first outflow in three weeks.
– Consumer Discretionary: Saw its first outflow in six weeks.
– Communication Services and Utilities: Received the largest inflows, with Communication Services maintaining the longest buying streak at 21 weeks.
– Energy Stocks: Faced continuous selling for five weeks.
– Industrials: Experienced outflows in six of the past seven weeks.

ETF Trends

Meanwhile, ETF inflows continued for the third consecutive week across all investment styles and market sizes except mid-caps. Unlike individual stocks, Technology ETFs attracted the most inflows, while Energy ETFs experienced the largest outflows.

Market Outlook

The U.S. stocks ended last week in the green, boosted by Federal Reserve Chair Jerome Powell’s comments suggesting that interest rate cuts are on the way.