LIVE MARKETS-BofA clients tune out of equities overall, but tune in to communication services

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BOFA CLIENTS TUNE OUT OF EQUITIES OVERALL, BUT TUNE IN TO COMMUNICATION SERVICES

BofA Securities equity and quant strategist Jill Carey Hall says that last week, with the S&P 500 index .SPX advancing about 1.6%, clients sold U.S. equities for a sixth week in a row, selling both single stocks (-$2.2 billion; sixth-straight week of outflows) and equity ETFs (-$0.4 billion; first outflows since early October of last year).

"Selling was led by institutional clients (4th wk. of selling) while hedge fund clients bought for the 4th straight wk. Retail clients bought US equities after selling for the past 9 weeks," writes Hall in her note.

She adds that after record inflows in 2025, small caps were the only size segment to see inflows in the first week of 2026.

Additionally, corporate client buybacks accelerated to their highest weekly level since April, but trailing 52-week buybacks as a percentage of market cap are at their lowest since early 2024 and in line with the average since 2010.

Hall says that clients sold stocks in seven out of eleven sectors, led by Industrials, which saw their largest outflows since December 2018, and Financials (which has seen outflows in eight out of the past nine weeks).

Tech also had outflows for a second week in a row.

Communication Services captured the biggest inflows, its largest ever as a GICS sector since 2018. Staples, Energy and Materials also garnered inflows.

In terms of ETFs, Hall indicated that clients sold equity ETFs across major styles (Growth/Value/Blend). Large- and mid-cap ETFs saw outflows, while small-cap/broad market ETFs had inflows.

Clients bought ETFs in 10 of 11 sectors last week, led by Energy.

Tech was the sole sector to see outflows.

(Terence Gabriel)

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