BofA warns Fed risks policy mistake with early rate cuts
Investing.com -- Bank of America Securities said its clients pulled $6.9 billion from U.S. equities last week, marking the largest weekly outflows since August 2023 and the sixth-largest on record since 2008.
The outflows came despite the S&P 500 rising 1.7% and reaching fresh highs. Selling was concentrated in single stocks, while exchange-traded funds (ETFs) saw modest inflows.
Institutional clients led the selling and have now reduced exposure in eight of the past nine weeks. Hedge funds were also net sellers for a third straight week.
In contrast, private clients returned to buying after a brief pause and have been net buyers in 28 of the past 30 weeks.
Corporate buybacks also slowed, hitting their lowest weekly level since October 2023. After running above typical seasonal trends in recent weeks, buybacks are expected to pick up again over the next six weeks as earnings season unfolds.
BofA said clients sold equities across all 11 sectors—something not seen since November 2022.
“The last time selling was that broad-based, subsequent four-week S&P 500 (+8%) were in the 97th percentile of history (in our data since 2008),” strategists Jill Carey Hall and Tyson Dennis-Sharma noted.
The largest outflows last week were seen in Communication Services, Technology, and Industrials, all sectors that had attracted significant inflows earlier in the year.
Utilities saw the biggest sector-specific selling in the first half of 2025 and continued to face pressure, logging a seventh consecutive week of outflows.
In ETFs, investor preference shifted further toward Value over Growth. Clients bought Blend and Value ETFs for a fifth week, while Growth ETFs saw net selling for the fifth time in seven weeks.
Sector-wise, the heaviest ETF buying occurred in Energy and Real Estate, while Technology and Financials faced the biggest outflows.
Clients also added to ETFs across all size segments, even as they sold individual stocks broadly, BofA revealed.