Bank of America customers bought heavily in US stocks last week, with the net buying volume reaching a two-year high, led by smart money
Institutional clients of Bank of America made the largest buying effort among all groups, marking their first net buying in five weeks and the largest fund inflow since November 2022; hedge fund clients have been net buying stocks for the third consecutive week; while retail investors have been selling stocks for the second consecutive week
Last week, the Federal Reserve initiated a significant 50 basis point rate cut. Jill Carey Hall, a quantitative strategist at Bank of America, and her team pointed out in their latest research report on Tuesday that the bank's clients aggressively bought U.S. stocks, with a net inflow of $6.9 billion, the largest inflow since October 2022, and the third largest inflow in Bank of America's historical data, with the so-called "smart money" inflow being the most prominent.
Looking at client categories:
- Bank of America's institutional clients had the largest buying intensity among all groups, marking their first net buying in five weeks and the largest inflow since November 2022.
- Despite a slowdown in corporate buybacks last week, they remained strong and continued to exceed seasonal levels. The percentage of buybacks to the S&P 500 market cap is expected to reach the highest level in Bank of America's historical data records.
- Bank of America's hedge fund clients have been net buyers of stocks for the third consecutive week.
- Bank of America's retail clients, on the other hand, have been selling stocks for the second consecutive week.
Dividing by industry:
- In the 11 sectors of the U.S. stock market, stocks in 8 sectors were net bought.
- Benefiting from lower interest rate pressures, the technology, non-essential consumer goods, and utilities sectors attracted the largest buying volume. The utilities sector saw the largest weekly inflow of funds since 2008. The non-essential consumer goods sector saw the second largest inflow of funds in Bank of America's historical data, led by institutional buying.
- Funds flowed out of the financial, real estate, and energy sectors, with the real estate sector experiencing five consecutive weeks of selling, the longest continuous outflow among the 11 sectors of the S&P 500 index.
Bank of America also stated that its clients purchased individual stocks and ETFs, with the inflow of funds into single stocks reaching a historic high. Stocks of all market capitalizations, large, medium, and small, attracted buyers