Bank of America Securities Clients Buy Big in U.S. Equities Following Fed Rate Cut - Largest Inflows Since 2022
Last week, Bank of America Securities clients were major net buyers of U.S. equities amidst the Federal Reserve's historic interest rate cut and the market's 1.4% jump. Inflows reached $6.9 billion, the highest since October 2022.
According to BofA, clients invested in both individual stocks and ETFs, with record inflows into single stocks across all market caps. Institutional clients led the buying trend, with their biggest inflows since November 2022, while hedge funds continued to buy for the third consecutive week.
Tech, Consumer Discretionary, and Utilities were the top sectors attracting investments, with Consumer Discretionary seeing the second-largest inflows in history, driven by institutions. Utilities experienced a record inflow, prompting BofA strategists to upgrade the sector to Overweight.
On the flip side, Financials, Real Estate, and Energy saw outflows, with Real Estate facing its fifth straight week of selling. Financial ETFs saw strong inflows, while Real Estate ETFs experienced the largest outflows.
Despite a slight slowdown last week, corporate buybacks remained robust, with buybacks as a percentage of the S&P 500 market cap on track for a record year. The week ended on a positive note for U.S. equities, with the S&P 500 climbing 1.36% and nearing a 20% increase for 2024, driven by investor demand for risk assets post-Fed rate cut.
In conclusion, Bank of America Securities clients made significant investments in U.S. equities last week, with strong buying trends observed across various sectors. The market's response to the Fed rate cut and ongoing volatility suggests a positive outlook for investors, especially in sectors like Consumer Discretionary and Utilities. Analyzing these trends can help individuals make informed decisions about their own investments and financial strategies.