Bank of America (NYSE:BAC) equity & quant strategist Jill Carey Hall said today that the firms flows show the continuation of the most recent trends in the stock market.
Overall, clients were small net sellers of US equities, led by hedge funds, which continued to sell equities for the fourth consecutive week. On the other hand, institutional and retail clients resumed buying equities with retail leading the way again.
"Our retail client flows have been a positive - not contrary - indicator of subsequent near-term S&P 500 returns, and actually a slightly better signal than hedge fund flows," Carey Hall said in a client note.
Clients were selling stocks in 7 of the 11 sectors with Consumer Discretionary and Financials suffering the most with the selling of the former the largest since Aug. 2020 and the third-largest in our weekly data history since 2008.
"We have been cautious on labor-intensive Consumer Discretionary stocks as wages have continued to rise - and the sector currently ranks worst in our tactical S&P 500 sector ranks and has been deteriorating in rank in our small cap sector ranks."
On the other hand, Industrials and Materials saw the biggest inflows, while clients were also buying Real Estate and Staples equities.
When it comes to buybacks, last week's activity was the lowest in the past 11 months "suggesting a tepid read on broader S&P 500 buybacks in 1Q."
By Senad Karaahmetovic