Bank of America customers net sold over $7 billion in US stocks last week, the largest since November 2020
Last week, the outflow of funds from institutional clients and hedge fund clients of Bank of America was the most pronounced. Retail investors were net buyers of small amounts. By industry, financial stocks saw the largest outflow of funds for the second consecutive week; technology stocks also saw a significant outflow of funds, marking the first outflow since May
The team led by Jill Carey Hall, a quantitative strategist at Bank of America, stated on Tuesday that Bank of America clients sold over $7 billion worth of US stocks last week, marking the largest divestment since November 2020. Institutional clients and hedge fund clients saw the most significant outflows of funds last week, while retail investors were net buyers of small amounts.
Bank of America's institutional clients led the selling for the second consecutive week; hedge funds experienced net outflows for the first time in three weeks; and retail clients, after selling the previous week, became small-scale net buyers last week.
From an industry perspective, financial stocks saw the largest outflows for the second consecutive week, despite better-than-expected earnings reported by the industry as a whole. Technology stocks also experienced significant outflows, marking the first outflow since May. The communication services sector continued to see inflows, ranking first in terms of fund inflows last week among all industries.
Bank of America clients accelerated their buybacks last week, a typical occurrence during earnings season, and continued to be above the usual seasonal levels.
Bank of America's latest data is consistent with the trend reported by Goldman Sachs' brokerage division yesterday. Goldman Sachs stated that for the week ending July 19, hedge funds aggressively closed out positions in both their long and short positions, with the speed of hedge fund selling being the fastest since January 2021.
On Friday last week, major US stock indices all fell, with the VIX fear index hitting its highest level since late April, the Russell small-cap index falling for three consecutive days, and the semiconductor index dropping over 3%. Looking at the entire week, there was still a rotation in the US stock market, with the previously weaker-performing Dow and small-cap stocks posting cumulative gains, the Nasdaq ending its six-week winning streak, and the S&P 500 and Nasdaq having their worst single-week performance in three months