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BofA analysts said in a research note Tuesday that last week represented the second week in a row that its clients were net sellers of U.S. equities.
“Institutional & hedge fund clients were both net sellers for a second straight week, while private clients were small net buyers for the second consecutive week,” they told investors.
The analysts also revealed it was a “rare week of tech selling,” with BofA clients selling stocks in seven of the 11 sectors, led by Tech, which had the biggest outflows since September and the first outflow this year. Industrials, which alongside financials has the longest recent selling streaks (last five weeks), were also sold.
“Materials saw the biggest inflows, and together with Tech & Discretionary has seen the most consistent inflows YTD (all but one week this year),” wrote analysts. “But momentum could continue: 4wk avg. Materials flows as a % of mkt. cap are more than one standard deviation above avg., but this has not historically been a contrary signal for the sector.”
Analysts concluded that despite strong flow momentum, active fund positioning is still underweight.
