BofA clients pull out of US stocks as S&P 500 hovers near all-time high

Bank of America Corp. clients pulled money from US stocks for the first time in three weeks, paring their exposure in the asset class that continued to hover near a record. 

Outflows were on display among all major clients groups — excluding corporates — with $4.6 billion exiting US stocks last week, the bank’s quantitative strategists including Jill Carey Hall wrote in a note to clients on Tuesday. The 500-member index finished the week at 5,634.61, or 0.9% away from an all-time high. 

The withdrawal from US equities comes amid uncertainty about how much longer the risk-on momentum that pushed the S&P 500 up 18% this year can continue. It’s also a departure from the buying clients had previously done over the past two weeks. The week before, Bank of America clients shelled out $2.7 billion for US equities as the S&P 500 Index notched its best week of the year. 

The offloading was seen across seven of the 11 industry groups but was most prominent in technology stocks, which saw their first outflow in three weeks. Clients pulled money from energy stocks for the fifth week in a row, while consumer discretionary posted its first outflow in six weeks. Communication services was a winner yet again, extending its 21-week buying streak. 

The outflow from single stocks came as clients purchased ETFs of all sizes, styles and sectors — except mid-caps — for a third consecutive week. Unlike single stocks, tech ETFs saw the largest inflows while energy ETFs saw the largest outflows. 

Meanwhile, BofA corporate client buybacks slowed last week, dropping below seasonal levels for the first time in 24 weeks, the strategists wrote. Still, on a year-to-date basis, buybacks are on pace for a record year, according to the firm’s data history.