Bank of America reported that stock purchases by its clients saw a slight improvement last week, with $0.6 billion flowing into the market after a series of outflows.
Client investments were focused on individual stocks and exchange-traded funds (ETFs), with both large-cap and small-cap stocks experiencing positive inflows, while mid-cap stocks saw a decline in inflows.
Notably, individual clients and corporations were the primary drivers of the buying activity, marking the first time this group has recorded positive inflows since early September. On the other hand, institutional clients and hedge funds continued to reduce their equity holdings for the second consecutive week.
The pace of corporate share buybacks slowed, and with tax-loss selling season approaching, stock sales from institutional clients are expected to increase, especially ahead of the October 31 deadline for most investment funds to realize capital gains. It is worth noting that this group has sold stocks in six of the last seven weeks.
As for individual investors, their sales activity typically accelerates in December as the year-end deadline for realizing personal gains approaches.
Additionally, Bank of America data showed that clients expanded their investments in six of the 11 major sectors last week, with consumer goods, telecommunications services, and healthcare leading the positive inflows.
In contrast, the technology and industrial sectors saw the largest outflows, with tech sales reaching their highest level since August.
Meanwhile, the real estate sector continues its corrective trajectory, with ongoing sales for the seventh consecutive week, although Bank of America still views the sector as attractive in terms of income and investment quality.
