Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

BOFA CLIENTS PIVOT TO SMALL CAPS AMID SELLING IN LARGER NAMES

Bank of America Securities' equity and quant strategist Jill Carey Hall says clients were net sellers of U.S. equities last week, even as the S&P 500 .SPX edged up about 0.65%. The selling was mainly driven by $2.8 billion in outflows from individual stocks. At the same time, clients kept pouring money into equity ETFs, adding about $600 million and extending a 12-week buying streak.

Beneath the surface, institutional clients led the selling for a second straight week, while private clients have now been net sellers for four weeks in a row. Hedge funds stood out as the main buyers.

There’s also been a noticeable shift in market-cap positioning. Clients trimmed exposure to large- and mid-cap stocks but rotated into small caps. In fact, flows into small caps -- combining stocks and ETFs -- have turned positive on a four-week average basis for the first time since late April.

Corporate client buybacks have slowed for a third straight week. Year-to-date, annualized buybacks are running slightly below 2025 levels and well under the record pace seen in 2024, though they remain above the levels seen from 2016 through 2023.

Across sectors, clients were net sellers in seven of 11 groups, with healthcare and financials leading the outflows. Those sectors have now seen selling for three and four consecutive weeks, respectively. Tech rebounded, drawing the biggest inflows after record outflows the week before, while communication services saw its first inflows in six weeks. Real estate continues to show steady demand, with a seven-week buying streak.

In ETFs, clients favored value and blend strategies while cutting growth exposure. They bought across most size segments except mid caps. Sector-wise, industrial and financial ETFs saw the strongest inflows, while materials ETFs saw their largest outflows since July 2022. Notably, tech ETFs were sold for a second straight week, even as investors bought individual tech names.

(Terence Gabriel)

*****

EARLIER ON LIVE MARKETS:

FOOD FOR THE FED: SOLID RETAIL AND PENDING HOME SALES, STUBBORNLY HIGH MORTGAGE RATES CLICK HERE

US STOCKS CHOP AROUND AHEAD OF WARSH'S FIRST FED DECISION CLICK HERE

BENCHMARK TREASURY YIELD STEADIES AHEAD OF FED, BIGGER MOVE STILL BREWING CLICK HERE

NO QUICK FIX FOR IT SERVICES' AI HEADACHE CLICK HERE

BOE RATE HIKES? WHAT FOR? CLICK HERE

TECH NOW ACCOUNTS FOR 20% OF GLOBAL EQUITY POSITIONING, BNY SAYS CLICK HERE

STEADY ON (CLICK HERE)

EUROPE BEFORE THE BELL: TAKING STOCK (CLICK HERE)

ALL EYES ON HOW WARSH WALKS THE LINE (CLICK HERE)