• Bank of America clients bought U.S. equities for a fourth consecutive week, even as the S&P 500 slipped 0.6%.
  • Institutional investors led the charge with their largest weekly net purchases since December 2020, the second-biggest on BofA's records dating back to 2008.
  • Technology, Financials, and Industrials saw the strongest inflows, while Communication Services, Energy, and Materials lagged.

Dip Buyers Persist

Bank of America clients remained aggressive buyers of U.S. equities last week, extending their buying streak to four consecutive weeks, according to a client-flow note seen by Bloomberg. The buying came despite a 0.6% decline in the S&P 500, suggesting investors are still eager to scoop up shares on weakness.

Institutional investors were the primary drivers, posting their largest weekly net purchases since December 2020 and the second-biggest on BofA's records dating back to 2008. Retail investors also continued buying, while hedge funds were net sellers for a third straight week.

Sector Rotation in Focus

Sector flows highlighted a clear rotation. Technology, Financials, and Industrials attracted the strongest inflows, with Industrials seeing record demand after months of outflows. On the flip side, Communication Services, Energy, and Materials were the weakest sectors, indicating a shift away from defensive or cyclical bets.

Buybacks Still Supportive

Corporate buybacks slowed during earnings season but remain supportive overall. BofA's four-week average buyback activity is running 19% above year-ago levels, providing a backstop for equities even as the broader market pulls back.

"This persistent buying, particularly from institutions, suggests a belief that the dip is temporary," said a market strategist familiar with the data. BofA declined to comment further on the flows.

Broader Implications

The continued buying streak underscores a cautious optimism among investors, who view recent pullbacks as opportunities. However, the divergence between institutional buying and hedge fund selling could signal uncertainty about near-term direction. With earnings season underway and the Federal Reserve's next move still in focus, the resilience of this dip-buying trend will be closely watched.

Correction: An earlier version of this article misstated the duration of the buying streak. It is four weeks, not five.