Bank of America: First weekly net inflows in a month! Last week, $2.3 billion went into U.S. stocks

Hedge funds and buybacks pushed $2.3 billion into stocks last week, the first weekly net inflow in a month, Bank of America data showed Tuesday.

Over the past five trading days, $2.3 billion has flowed into U.S. stocks even as the S&P 500 was little changed and many investors remained on the sidelines ahead of earnings from tech giants, according to a report by Bank of America strategists Jill Carey Hall and Savita Subramanian.

Hedge funds poured into the market for a second straight week, as did a surge in corporate share buybacks, which accelerated last week to their highest level since October.

According to Bank of America data, the top stock category has been technology, which has seen the biggest inflows in three months over the past five trading days. Bofa believes these investors continue to see tech as the story line this year.

In other equity classes, financials saw inflows for the first time in four weeks after a regional banking crisis, solid quarterly results from big U.S. banks and better-than-expected results from regional banks across the board. Still, money continued to pull out of consumer discretionary and industrial stocks.

Bank of America analysts wrote in the report:

Our research shows that long-only funds have liquidated all cyclical stocks except industrials.

Bank of America also highlighted that clients last week started buying individual stocks as well as selling ETFs:

Cumulative year-to-date flows suggest the gap between money flowing into equities and money flowing out of ETFs is at a record high.

Earlier, data from DataTrek Research showed that international stocks generally outperformed U.S. stocks in the first quarter of this year, decoupling from U.S. stocks to an unusual degree.

DataTrek co-founder Nicholas Colas said:

Non-u.s. stocks decoupled from U.S. stocks to a statistically unusual degree in the first quarter. That, combined with outperformance in non-U.S. equities, could signal more money will flow from U.S. stocks to international equities going into the second quarter.

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