By Senad Karaahmetovic
The strategists at Bank of America said the firm's clients continued to buy U.S. equities last week when the S&P 500 reversed post-CPI gains to close 2.1% lower on the week.
BofA clients were buying stocks for the sixth consecutive week, driven by strong inflows in ETFs (the biggest week of ETF inflows since 2017). The buying activity was led by institutional clients and followed by hedge funds.
Private clients were selling last week with the strategists noting they are typically big sellers in December amid tax loss selling by individual investors before returning to buying in January. As far as year-to-date (YTD) flows are concerned, private clients were the biggest net buyers of equities.
Institutional clients were also buying after two years of selling while Hedge funds were the sole net sellers, marking their biggest outflows from equities on record (BofA tracks flows since 2008).
"Clients sold stocks in seven of the 11 sectors, led by Tech and Health Care (first sales of Tech in six weeks). Stocks in the Consumer sectors saw the biggest inflows. YTD flows: Tech & Communication Services inflows are 2x as large as cumulative inflows into the rest of the market. Industrials saw the biggest outflows," the strategists added.
As far as ETF YTD flows are concerned, Energy ETFs are the biggest beneficiaries while Health Care and Industrials saw outflows.