Bank of America customers bought US stocks for the second consecutive week last week, led by hedge funds and institutions, while retail investors sold off

According to a research report released by the quantitative strategy team led by Jill Carey Hall of Bank of America on Tuesday, as of last week ending on August 16, Bank of America's clients invested $2.7 billion in US stocks. This is the second consecutive week of net buying of US stocks, with inflows led by so-called "smart money," with hedge funds and institutions buying, while retail investors are selling.

Bank of America's corporate clients continue to repurchase at high levels, with expectations to set a record for the largest scale since the company began recording data, with 23 consecutive weeks of repurchases above seasonal levels.

Last week, due to multiple economic data in the US firming up market confidence in a soft landing, the S&P, Nasdaq rose for seven consecutive days, ending a four-week decline, with all three major US stock indexes posting their best weekly performance so far in 2024.

Looking back at Bank of America's clients' activities during the week of "Black Monday" on August 5th, the inflow of funds from Bank of America's clients that week was the tenth largest since Bank of America began recording data in 2008, and the first net inflow in five weeks. During the week of August 5th, Bank of America's institutional investor clients led the buying of US stocks, while hedge funds and retail investors sold stocks.

The US stock market hit the bottom of this round of correction on August 5th and then launched a strong rebound, indicating a high correlation between the flow of funds from Bank of America's clients and market trends.

From an industry perspective:

• Last week, the inflow of funds into the technology and communication services sectors was most significant, with the largest buying volume so far this year.
• Following in buying intensity were the non-essential consumer goods and healthcare sectors, both of which have seen inflows in the past five weeks.
• Last week, Bank of America's clients net bought stocks in all industries except for energy and industrials.
• Energy stocks saw a fourth consecutive week of selling, the longest since October 2022. Industrial stocks have faced selling in five out of the past six weeks, with the sector recording the largest four-week average negative cash flow among all S&P 500 sectors.