(Bloomberg) -- A major exit from US stocks by individual clients at Bank of America Corp. could be a bullish contrarian cue for the market.
Private clients at the firm sold American equities for a 10th consecutive week, bringing the cohort’s rolling four-week average of sales to the largest since October 2021, according to data tracked by BofA’s Jill Carey Hall.
In four of the last five times a similar level of “retail capitulation” occurred, the S&P 500 Index rose more than average in the subsequent one-, three-, and six-month periods.
BofA’s retail clients have bolted from US stocks since late March even as this year’s advance continued.
Earlier this week, the S&P 500 briefly veered 20% above its October closing low — the technical threshold of a bull market — as traders look ahead to a Federal Reserve pause and euphoria around artificial intelligence buoyed sentiment.
Despite the heavy selling by individual investors at BofA last week, institutions and hedge funds were net buyers of stocks.
At the sector level, technology logged its largest withdrawal in a year, while financials notched the biggest inflows.
Elsewhere in client flow data, figures showed investors sold single stocks for the first time in three weeks while ETFs saw inflows.
Among corporate clients, buyback momentum continued to wane after robust insider purchases in April at the start of the earnings season.