Bank of America said its clients have been buying the recent dip in stocks.
Specifically, clients last week turned net buyers for the first time in five weeks, with inflows totaling $5.8 billion. BofA strategists said this marks the tenth biggest inflow since 2008.
According to a report published Tuesday, the bank’s clients turned net buyers of single stocks and equity exchange-traded funds (ETFs), with larger inflows directed towards individual stocks.
All market cap sizes—large, mid, and small—experienced inflows, continuing a three-week streak for large caps and a two-week streak for mid and small caps.
Institutional clients were net buyers for the first time in five weeks, while hedge funds and private clients were net sellers.
Meanwhile, buybacks among corporate clients remained robust, BofA notes, with activity accelerating last week. These buybacks “continue to track above typical seasonal levels as a % of S&P 500 market cap for the last 22 straight weeks.”
Looking ahead, the strategists cautioned that client flows tend to weaken during the fall months, and they "also expect continued equity volatility heading into the US election."
In terms of sector inflows, Technology and Communication Services stocks led the way last week, reflecting a broader year-to-date trend.
Communication Services continues to enjoy the longest buying streak, now at 19 weeks, while Technology saw inflows for the first time in four weeks.
Overall, seven out of the 11 sectors experienced inflows, with Financials witnessing its largest buying activity since April, second only to the TMT sectors.
In contrast, clients sold off Energy, Staples, Real Estate, and Utilities stocks. Notably, Energy stocks have been sold for three consecutive weeks, while Industrials, which had faced four weeks of selling, recorded its biggest inflows since March.
In the ETF market, tech funds attracted the largest inflows, while healthcare ETFs saw the most significant selling.