Tesla revenue dented by softer demand as Musk warns of "rough quarters" ahead
Investing.com -- Last week, clients were net sellers of U.S. equities for the first time in three weeks, even as the S&P 500 rallied to new record highs.
The $1.3 billion in outflows marked the largest weekly equity selling since mid-April. While clients sold individual stocks, they continued to buy exchange-traded funds (ETFs).
In terms of market cap, large and small caps saw inflows, but mid caps experienced outflows.
All major client groups participated in the selling. Institutions led the move, extending their selling streak to seven of the past eight weeks.
Hedge funds also reduced exposure for the second consecutive week, and retail investors were net sellers for the first time in six weeks—only the second time in the past 29 weeks.
Meanwhile, corporate buyback activity remained strong and exceeded typical seasonal patterns for a fourth straight week.
Selling was concentrated in eight sectors, particularly Industrials and Real Estate, both of which have now recorded four consecutive weeks of outflows.
Utilities extended their streak to six weeks, weighed down by uncertainty tied to the reconciliation bill moving through Congress. Despite being one of the top-performing sectors year-to-date, Utilities saw the largest net selling among all sectors in the first half of the year.
Tech stocks attracted the most inflows for the third week in a row, with Financials and Consumer Discretionary also seeing buying interest.
"Clients were bigger net sellers of defensive sectors than cyclical sectors in aggregate after two weeks of flows skewing in favor of defensives,” BofA strategist Jill Carey Hall said in a note.
ETF flows rebounded strongly, marking their biggest inflow since mid-April. Investors added to Blend, Value, and Growth ETFs after two weeks of net selling in Growth. Financials led the inflows, helped by better-than-expected bank stress test results.
In contrast, Energy ETFs saw the sharpest outflows in ten weeks. The move followed a ceasefire between Iran and Israel and a 13% drop in WTI crude prices, reversing gains from the previous two weeks.