US investors sold stocks for the second consecutive week last week after having been net buyers for the prior 14 weeks since the election, that’s according to Bank of America Merrill Lynch’s weekly client flow trends report. The report, which was released yesterday, notes that the trend of selling stocks, which began two weeks ago has continued throughout the end of February with all of the bank’s clients selling equity holdings.
Net single stock sales totaled $988 million for the week eclipsing small purchases of ETFs. Hedge funds, institutional investors, and private clients all sold equities with hedge funds extending their selling streak to four consecutive weeks.
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BOA: Investors Are Dumping Stocks
Thanks to selling over the past fortnight, four-week average flows have slumped back into net sales for all investor groups. After heavy buying throughout the majority of H2 2016, on a four-week average basis hedge funds are now net sellers of equities. Bank of America’s private clients are also net sellers on a four-week basis after recording the most substantial net buys during January than at any other time since the beginning of 2008 (private investors have been the most aggressive buyers in the past few months). Corporations continue to pull back on buybacks share repurchases conducted by Bank of America’s corporate clients are tracking the lowest of any comparable period since 2013 year-to-date.
Barring ETFs, every single sector was sold by Bank of America clients throughout the week, indicating many believe the Trump bump has now come to an end. All 11 sectors saw selling with Energy and Health Care taking the wooden spoon for the most sold sectors. Health Care has seen net sales since last month. Meanwhile, financials have booked the longest buying streak for five years.
The report points out the last time such hefty universal selling was seen was two weeks before the Brexit vote in early June. Utilities still have the longest selling streak, with outflows for five consecutive weeks
The one section of the market that did see buying is small caps. Clients sold large and mid caps but bought small caps, after sales of all three size segments the week before.
By Rupert Hargreaves
