Institutional selling, retail buying! Bank of America: Institutional clients sell tech stocks, becoming net sellers of U.S. stocks for four consecutive weeks.

BofA Securities strategist Jill Carey Hall noted in a recent report that clients have been net sellers of U.S. stocks for the fourth consecutive week, with selling concentrated in tech stocks, and institutional investors driving this reduction.

Citing client data through the week ending June 26, Hall said the bank's clients sold stocks in nine of the 11 S&P 500 sectors last week, with technology and financial sectors bearing the brunt.

The four-week average net capital inflow into the technology sector has fallen to an all-time low. The consumer staples sector recorded net capital outflows for the seventh consecutive week, matching the longest streak on record.

Individual stocks saw $9.9 billion in outflows, the fourth largest outflow since records began in 2008. In contrast, small-cap and micro-cap stocks recorded record inflows, and equity ETFs recorded $4.2 billion in inflows.

Institutions led the selling, while hedge funds and retail investors turned net buyers, and corporate buybacks slowed.

Looking at the client composition, this round of selling was primarily driven by institutional clients, who were net sellers of U.S. stocks for the fourth consecutive week, with the previous week's outflows reaching a record high.

Unlike the continued selling by institutional clients, hedge funds were net buyers during this period. Retail clients also reversed their previous stance, becoming net buyers for the first time in six weeks, indicating a divergence among different types of investors in the current market environment.

In terms of corporate behavior, BofA data shows that corporate client buyback activity slowed for the fifth consecutive week, falling to its lowest level since February of this year. This sustained slowdown in buyback momentum echoes the overall cautious sentiment of institutional clients reducing their holdings in tech and financial stocks.

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