Investing.com -- Clients of Bank of America Securities net bought $3.2 billion of US equities last week, representing the third consecutive week of inflows which accelerated to their highest level since September.
According to the bank’s Tuesday report, the buying activity spanned stocks, exchange-traded funds (ETFs), and companies of all sizes—large, mid, and small caps.
Institutional and hedge fund clients were net buyers for the third straight week and the first time in two weeks, respectively. In contrast, retail investors turned into net sellers after being net buyers the previous week.
Clients purchased stocks in nine of the 11 sectors, with Communication Services seeing the largest inflows since September. Technology, Financials—recording their biggest inflows since August—and Consumer Discretionary also attracted strong interest.
On the other hand, Real Estate and Health Care stocks were sold, with Health Care experiencing its first outflows in five weeks and being the only sector with ETF outflows.
All major client groups—institutions, hedge funds, and retail investors—added to ETFs. Institutional clients were the only group to also buy individual stocks.
“Clients bought ETFs across all sectors but Health Care, led by Tech (biggest inflows since Sept.), Industrials (biggest inflows since July), and Financials,” BofA strategists noted.
Meanwhile, corporate buybacks picked up momentum, continuing to run above seasonal norms as a percentage of S&P 500 market capitalization. Year-to-date, corporate buybacks as a share of market cap are on track to set new historical records.
US equities started this week positively, with major indexes closing higher on Monday and the small-cap Russell 2000 hitting a record high, driven by lower bond yields after the announcement of Scott Bessent as the next US Treasury secretary.
President-elect Donald Trump’s long-awaited nomination of Bessent late on Friday alleviated some fiscal concerns. Analysts believe that Bessent could take steps to curb government borrowing while adhering to Trump’s fiscal and trade policy priorities, including tariffs.
The announcement also helped ease market fears over the impact of new tariffs, which had contributed to rising bond yields before the election.
Treasury yields fell sharply on Monday, with the 30-year bond leading the declines, providing additional support to equities. The Russell 2000 climbed to an intraday record of 2,466.49, surpassing a high set three years ago.