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RETAIL INVESTORS POST BIGGEST OUTFLOWS SINCE DECEMBER AS TECH LEADS SELLING, BOFA SAYS

BofA Securities strategist Jill Carey Hall says clients were slight net sellers of U.S. equities last week, even as the S&P 500 .SPX rose about 0.9%.

The main reason: continued outflows from individual stocks. Clients pulled roughly $1.9 billion from single names, marking a second straight week of selling. That offset about $1.6 billion in inflows into equity ETFs, extending a nine-week streak of buying in those products.

Retail investors led the selling, posting their biggest outflows since December. Hedge funds flipped back to buying after pulling back the previous week, while institutional investors added to equities for a fourth consecutive week.

Looking across the market, most size segments saw outflows, with mid-caps the exception. While clients sold individual stocks across all categories, mid-caps still saw net inflows once ETF activity was included.

Corporate buybacks also picked up, reaching their highest weekly level since January. Even so, they remain below average as a share of market cap - a pattern that has persisted for much of this year. On a 52-week basis, buybacks as a percentage of market cap have continued to decline and are now at their lowest level since late 2023. Activity has slowed most in tech, while increasing in consumer discretionary, financials, and energy.

On the sector front, clients sold stocks in eight of 11 sectors, led by tech. Consumer discretionary and materials also saw notable outflows. The only sectors to attract inflows were real estate, healthcare, and utilities, with real estate on a four-week buying streak.

Hall also points to improving sentiment toward financials. While the sector still saw slight outflows last week, four-week average flows have climbed to their highest level since late 2020.

In ETFs, investors continue rotating -- buying value and blend funds while selling growth for a second straight week, with industrials among the biggest beneficiaries.

(Terence Gabriel)

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