Institutions are selling, retail investors are buying! Bank of America: Institutional clients are selling tech stocks and have been net sellers of US stocks for four consecutive weeks.

Bank of America Securities strategist Jill Carey Hall pointed out in her latest report that its clients have been the "main net sellers" of US stocks for the fourth consecutive week, with selling concentrated in technology stocks. Institutional investors are the main drivers behind this round of selling.

Hall, citing client data for the week ended June 26, said the bank’s clients sold shares from 9 out of 11 S&P 500 sectors last week, with technology and financial sectors bearing the brunt.

The four-week average net inflow for the technology sector has dropped to a historic low. The consumer staples sector has recorded net outflows for seven consecutive weeks, the longest period on record.

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

Institutions lead the sell-off, hedge funds and retail investors become net buyers, corporate buybacks slow down

From the client structure perspective, this round of selling is mainly driven by institutional clients, who have been the main net sellers of US stocks for the fourth consecutive week. The scale of outflows the previous week hit a record high.

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

On the corporate side, Bank of America data shows corporate buyback activity slowed for the fifth consecutive week, falling to its lowest level since February this year. The continued weakening of buyback momentum echoes the overall cautious sentiment of institutional clients reducing holdings in technology and financial stocks.

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