(Bloomberg) - Bank of America Corp. clients pulled out of US equities for a third consecutive week, even as the stock market extended this year’s push higher.
Outflows were most prominent among institutional and individual investors, with $800 million exiting from the asset class last week, BofA strategists including Jill Carey Hall wrote Tuesday in a note to clients.
The withdrawals come as investors grow increasingly wary about how much longer momentum can hold up across equities as concerns over an economic slowdown weigh on the outlook for corporate earnings. Despite headwinds including weakening economic indicators and recent stresses in the financial system, the S&P 500 Index has clawed back recent losses and is up about 8% this year. Meanwhile, the tech-heavy Nasdaq 100 has soared 20% on bets the Federal Reserve may be nearing the end-point in its most aggressive hike cycle in decades.
In addition to weekly flow data, further signs of bearish sentiment came from the bank’s global fund manager survey that showed allocations to stocks versus bonds fell to the lowest level since the global financial crisis. Respondents also had the most pessimistic outlook on the economy since the end of last year.
Last week, BofA clients sold single stocks and purchased exchange-traded funds for only the fourth time this year, a contrast from year-to-date flows that have so far moved largely into individual stocks and out of ETFs. Weekly outflows came entirely from mid-cap shares after clients sold stocks of all sizes the prior two weeks.
At the sector level, investors yanked the largest sum from healthcare and industrials, while technology and materials led inflows. Financials saw their biggest weekly outflow since mid-February, even as megabanks posted solid earnings results.
By Alexandra Semenova
