Bank of America Securities: Clients Load Up on U.S. Equities for Second Week in a Row
In a bullish move, Bank of America Securities revealed that its clients continued to buy U.S. equities for the second consecutive week. The buying spree included individual stocks and exchange-traded funds (ETFs), with a notable focus on individual stocks attracting substantial inflows. The S&P 500 surged by 3.9% last week, reaching its highest point since mid-July.
Large, mid, and small-cap stocks all saw inflows, marking a positive trend for the fourth straight week for large caps and the third week for small and mid-caps, according to BofA strategists. Hedge funds and institutional clients joined in as net buyers for the second week in a row, with institutional clients turning net buyers for the first time in three weeks. On the other hand, private clients were net sellers for the second consecutive week.
The buying activity spanned across various sectors, with Technology and Communication Services sectors experiencing the most significant inflows. These sectors have also seen the largest inflows year-to-date, with Communication Services leading the way with a 20-week buying streak. Energy and Industrials were the exceptions, with Energy stocks facing their biggest sales since October 2022 and Industrials reporting negative momentum.
In the ETF market, inflows were recorded in eight of the 11 sectors. Energy ETFs saw the largest inflows, while Technology ETFs experienced the largest outflows.
Analysis:
Bank of America Securities' report indicates a positive sentiment among clients, as they continue to invest in U.S. equities. The buying trend in individual stocks and ETFs, particularly in the Technology and Communication Services sectors, reflects confidence in these areas. However, the negative momentum in Energy and Industrials sectors suggests caution in those areas. Overall, the data highlights the ongoing strength in the market and the potential for a record year in buybacks, signaling positive momentum for investors to consider in their financial decisions.