According to BofA analysts, the information technology sector (XLK) experienced the largest outflows last week since 2008, and the biggest since July 2023. The S&P 500 (SP500) was down 0.5% last week, leading BofA Securities clients to be large net sellers of U.S. equities for the fifth consecutive week, as reported in the latest Equity Client Flow Trends report. Clients net sold $5.7B in equities, marking the largest outflow since July 2023 and the fourth-largest since 2008, predominantly led by technology (XLK).
Year-to-date, information technology (XLK) has seen outflows totaling $3.63B, while health care (XLV) has experienced outflows of $5.23B, and consumer discretionary (XLY) has had outflows of $3.99B. Despite this, clients bought discretionary stocks (XLY) for the first time in five weeks but continued to sell consumer staples stocks (XLP) for the last five weeks, according to Analyst Jill Carey Hall. She also mentioned that they believe discretionary (XLY) is in a better position than staples (XLP) should additional issues arise in the low-income consumer segment.
On the other hand, communication services (XLC) saw inflows of $32.94B, making it the ninth consecutive week of inflows for the sector. This continued positive trend indicates a strong interest in communication services among investors.