By Senad Karaahmetovic

Bank of America (NYSE:) strategist Jill Carey Hall noted that the bank’s clients are selling the rally after buying the dip in U.S. equities.

Flows from the last week when the S&P recorded the biggest weekly gain since November 2020 showed that clients were net sellers of equities, which marks the first time since the start of April.

Hedge funds were also involved in the selling process. However, US equity continues to be purchased by retail customers.

Sectors are the most important. Clients sold stocks in 7 out of 11 sectors. Tech and Health Care were the leaders.

“Health Care outflows as a percentage of sector market cap were more than 2 standard deviations below average; prior weeks of similarly extreme outflows (18 instances since 2008) saw the sector continue to underperform, on average, over the subsequent month (~60% of the time), but outperform over the next three months >60% of the time (by a median of 70bp),” the strategist told clients in a note.

Clients were also buying Consumer Discretionary and Staples as well as Financials and Materials stocks over the past week.

“Discretionary stocks have continued to see positive inflows most weeks since early April following capitulation-like outflows from the sector.”