LIVE MARKETS-BofA clients turned off by tech

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BOFA CLIENTS TURNED OFF BY TECH

BofA Securities equity and quant strategist Jill Carey Hall says that last week, with the S&P 500 index .SPX adding back around 0.5%, clients were net sellers for the first time in eight weeks. Net sales of $5.8 billion were the biggest since August.

Clients sold single stocks, while they snapped up ETFs.

"Institutional and hedge fund clients were sellers (for the first time in two weeks and for the sixth consecutive week, respectively). Private clients were net buyers for the fifteenth week (3rd largest inflow ever by this group), continuing the longest start-of-year buying streak in our data since '08," writes Hall in her note.

According to Hall, since 2010, BofA clients, in aggregate, have been dip-buyers during nearly all 10% S&P 500 corrections, with bigger buying on this correction than average.

Corporate client buybacks slowed, and have now been tracking below typical seasonal levels for the third week.

Hall says that clients sold stocks in five of the 11 GICS sectors, led by tech which saw the largest weekly outflow in BofA's data history since 2008.

Clients were bigger net buyers of cyclical sectors (including discretionary and financials) than defensive sectors in aggregate, suggesting to Hall that they haven't been positioning for a recession. A recession is also not BofA's house view.

As for ETFs, Hall says clients bought across styles: (growth/blend/value) and most sizes (large/mid/broad market). However, they offloaded small cap ETFs for the second week.

Clients sold ETFs across most sectors, led by energy. Only tech, materials and communication services ETFs garnered inflows.

(Terence Gabriel)

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