BofA/Merrill Lynch Highlights Weekly Stock Market Inflows

Bank of America Corporation (NYSE: BAC) is out with a report via the Merrill Lynch research team showing more data on the endless inflows of capital rotating back into the stock market. The firm said that clients have become more positive on global and cyclical sectors.

Today’s report said, “Last week (2/11-2/15), during which the S&P 500 climbed 0.1% higher, BofAML clients were net buyers of $401 million of U.S. stocks. This was the second week of net buying after some profit-taking in late January, with inflows from both hedge funds and private clients while institutional clients were net sellers.”

There are few observations:

• Net buying last week was chiefly in the large cap space, though all three size segments saw inflows.
• A reversal was seen in sector flows, where there was selling in Telecom and buying in Technology.
• The more domestically oriented sectors like Financials, Telecom and Health Care were the sole sectors to see net sales.
• Tech and Materials saw net buying by all three client groups last week, while Financials saw net sales by all three.
• Industrials and Energy currently have the longest net buying trends with 3 straight weeks.
• No sector has seen two consecutive weeks of net sales, while on a four-week average basis Materials has the longest net selling trend with outflows for the past eleven months.

Keep in mind that BofA is not saying to keep buying stocks endlessly and this inflow report is a net figure using this firm’s client observations only. This is merely one piece of a giant puzzle. The sell-off on Wednesday showed just how much investors are looking for an excuse to take profits when and where they can. The scenario that remains up for grabs is whether or not investors will look for bargain hunting opportunities on pullbacks.