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Fra Bank of America:

“Still No Confidence In The Rally” – that’s the title of the latest weekly BofA report looking at the buying and selling by its smart money clients (institutional clients, private clients and hedge funds), which finds that not only were sales by this group of clients last week the largest since September, and the fifth-largest in our data history, but this was the 10th consecutive week of selling as absolutely nobody believed this fakest of fake “rebounds” in recent history.

From BofA:

Last week, during which the S&P 500 was up 1.8%, BofAML clients were net sellers of US stocks for the tenth consecutive week, in the amount of $3.98bn. Net sales last week were the largest since September, and the fifth-largest in our data history (since 2008). Since early March, all three client groups (institutional clients, private clients and hedge funds) have been sellers of US stocks, led by institutional clients, suggesting that clients continue to doubt the sustainability of the rally amid the lack fundamental drivers (S&P 500 profits remain in a recession and revision trends remain weak). Small, mid and large caps alike saw net sales for the second week.

This can be seen in the chart below, where it becomes obvious that while the last two market dips in August and January were aggressively bought, this time nobody, well, buys it. In fact, the 4 week average selling has been the greatest almost on record.

 

More troubling, buybacks are slowing down fast: “Buybacks by corporate clients decelerated to their lowest levels since the comparable week at the end of 4Q. April has historically been one of the seasonally lightest months for buybacks by our clients after October and July (see chart below).”

 

And while previously, smart money at least had a preference to one or more sectors which they bought as they dumped everything else, this week that was not the case: “everything is being sold.”

Clients were broad-based net sellers of stocks in all ten sectors last week, led by sales of Health Care and Consumer Discretionary stocks. Only ETFs saw net buying (entirely by private clients). Both cyclical and defensive sectors have seen outflows: Telecom has the longest selling streak (six weeks), followed by Health Care and Industrials (five weeks each). Year-to-date, Tech has seen the biggest net sales (chiefly by institutional clients), followed by Industrials (chiefly by hedge fund clients). Materials has seen the greater net buying (driven by record buyback activity by our corporate clients). All three client groups were sellers last week, led by institutional clients. Buybacks by corporate clients decelerated last week, as they typically do ahead of earnings season. Large, mid and small caps all saw net sales last week.

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