LIVE MARKETS-BofA clients taking to materials

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BOFA CLIENTS TAKING TO MATERIALS

BofA Securities equity and quant strategist Jill Carey Hall says that last week, with the S&P 500 index .SPX falling 1.5%, clients were net sellers of U.S. equities (-$1.6 billion) for the first time in three weeks.

Clients were small net buyers of single stocks, while they sold ETFs for the first time in five weeks.

"Institutional & hedge fund clients were sellers while private clients were buyers, similar to the prior two weeks. Private clients have been buyers for 19 weeks straight (longest start-of-year buying streak in our data history, since '08)," writes Hall in her note.

She adds that corporate client buybacks slowed week-over-week, but are tracking above typical seasonal levels for a third week in a row. The pace of buybacks typically increases over the next four weeks during earnings season.

Hall says that clients sold stocks in four of the 11 sectors, led by consumer discretionary and financials.

Tech and energy stocks captured the largest inflows, while materials continues to have the longest buying streak (inflows for the last eight weeks amid the market volatility).

In aggregate, clients were net sellers of cyclical stocks vs. net buyers of defensive stocks (including staples and utilities), which was opposite of the trend BofA has seen most weeks since early March.

As for ETFs, clients sold equity ETFs for the first time in seven weeks. Opposite of the prior two weeks, they sold blend ETFs vs snapping up growth & value ETFs. And after inflows across size segments in recent weeks, they offloaded everything except mid cap ETFs last week.

Most sectors saw ETF outflows, led by financials, energy, and discretionary ETFs.

Materials ETFs led inflows and have garnered inflows in four of the last six weeks in tandem with materials stock buying.

(Terence Gabriel)

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