LIVE MARKETS-Industrials buck trend with record inflows as BofA clients flee US stocks
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INDUSTRIALS BUCK TREND WITH RECORD INFLOWS AS BOFA CLIENTS FLEE US STOCKS
BofA Securities equity and quant strategist Jill Carey Hall says that last week, with the S&P 500 index .SPX sliding 1.6%, clients were net sellers of U.S. stocks, as equity ETF outflows (-$1.0 billion, biggest since late September) offset small (+$16 million) single-stock inflows (after historic stock inflows the previous week).
"Selling was driven by hedge fund clients, who have been net sellers for 4 straight weeks. Private clients were also net sellers after buying the previous 2 weeks. Institutional clients were the only net buyers (3rd straight week of buying)," writes Hall in her note.
She adds that clients sold both large and small/micro caps (based on ETF + stock flows), though large-cap single stocks captured inflows. Clients have now offloaded small/micro caps for the last seven weeks.
Corporate client buybacks ramped up week-over-week, but buybacks as a percentage of market capitalization have been tracking below typical seasonal trends for the last nine weeks.
Hall says clients snapped up stocks in eight of the 11 sectors, led by Industrials, which saw record inflows in BofA's data history since 2008 (seventh largest ever as a percentage of S&P 500 Industrials market cap). Clients also bought stocks in both consumer sectors for the second week and also added both Tech and Communication Services names for the fourth straight week.
Financials suffered the biggest outflows and the group, at 10 weeks, has the longest recent selling streak of the sectors.
Energy stocks saw the next-largest outflows, with net sales the past two weeks despite the Iran conflict.
In terms of ETFs, Hall says clients bought growth/value ETFs, but sold blend ETFs. Similar to single stock flows, mid caps were the only ETF size segment to see inflows.
Eight of the 11 sectors garnered ETF inflows, led by Materials, Industrials and Energy (Energy ETFs continued to see large inflows after record inflows the prior week).
(Terence Gabriel)
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