Bank of America Throws In The Towel: "Clients Don’t Believe The Rally, Continue To Sell Stocks"

Tyler Durden's picture


One week ago, as the bear market rally was about to hit its peak post-ECB crescendo, we reported that according to Bank of America data, "The "Smart Money" Is Quietly Getting Out Of Dodge: Sells For A Sixth Straight Week As Buybacks Soar." 

The writing was on the wall with the selling prevalent across every investor class: "similar to the prior week, hedge funds, institutional clients, and private clients (aka the "smart money")were all net sellers, though sales last week were led by private clients (vs. hedge funds the week prior). Our hedge fund clients remain the biggest net sellers of US stocks year-to-date."

As for the 'buyer' no surprise there either: "buybacks by corporate clients accelerated last week to their highest level since August, and are tracking above levels we saw this time last year, though below levels we observed in 2014."

In other words, the smart money sold to corporations buying back their stock, courtesy of bondholders who continue to eagerly fund this transfer of money, something even Bloomberg figured out yesterday with its report showing the "Only One Buyer Keeping The Bull Market Alive" (buybacks, for those who missed it).

Which brings us to the latest week, where in the latest BofA report on client flow trends, we find that Bank of America has largely thrown in the towel and reports that "Clients don’t believe the rally, continue to sell US stocks" and notes that the "smart money" has now sold stocks in the face of this bear market rally for a near record seven consecutive weeks.

The details:

Last week, during which the S&P 500 climbed 1.1%, BofAML clients were net sellers of US stocks for the seventh consecutive week. Net sales of $3.7bn were the largest since September and led by institutional clients (where net sales by this group were the second-largest in our data history). Hedge funds and private clients were also net sellers, as was the case in each of the prior two weeks, but a different group has led the selling each week. Clients sold stocks across all three size segments, and net sales of mid-caps were notably the largest since June ’09. 

The details:

  • Hedge funds have been net sellers on a 4-week average basis since early Feb.
  • Institutional clients have been net sellers on a 4-week average basis since early Feb.
  • Private clients have been net sellers of US stocks on a 4-week average basis since early January.



And if the smart money continues selling, means...that's right, the corporations are buying their own stock:

Buybacks by corporate clients accelerated for the third consecutive week to their highest level in six months, which is also above levels at this time last year. This suggests that overall S&P 500 completed buybacks—which are reported with a lag—have likely picked up significantly as well.

It gets better: "Buybacks of Industrials stocks by our corporate clients last week were the largest in our data history, and Materials buybacks were also near record levels. These two sectors, along with Staples, have led the pick-up in overall buybacks in recent weeks."

The stunning long-term chart which confirms that without buybacks, the S&P would be orders of magnitude lower:

Which brings us to BofA's chart of the week: buybacks are picking up (in case someone was not aware).

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Tue, 03/15/2016 - 09:31 | 7316485 zeropain
zeropain's picture

now say after me, STFR!

Tue, 03/15/2016 - 09:34 | 7316507 Looney
Looney's picture

Bank of America Throws In The Towel

Was it a Spiderman Towel?  ;-)


Tue, 03/15/2016 - 09:36 | 7316519 zeropain
zeropain's picture

i think they are cleanest of the dirty shirts.

Tue, 03/15/2016 - 09:38 | 7316526 wildbad
wildbad's picture

Ha! pulled that out of the memory hole. ;-)

Tue, 03/15/2016 - 09:55 | 7316601 tarsubil
Tue, 03/15/2016 - 09:32 | 7316489 FreeShitter
FreeShitter's picture

Clients can sell all they want, the fed will just pick up the tab.

Tue, 03/15/2016 - 09:32 | 7316492 MFL8240
MFL8240's picture

Clients do not belive the rally because the rally is another farce.  Smart clients!

Tue, 03/15/2016 - 09:38 | 7316525 zeropain
zeropain's picture

BofA is getting out of prop trading.  they have been closing accounts and getting out all 2015.  they have been bear since Q4 2015.

Tue, 03/15/2016 - 11:50 | 7317158 Iam_Silverman
Iam_Silverman's picture

"they have been bear since Q4 2015."


JP Morgan Chase has been bear (Bear-Sterns) since 2008.


Nyuk, nyuk, nyuk.


A little banking humor to lighten the day.

Tue, 03/15/2016 - 09:33 | 7316500 ebworthen
ebworthen's picture

I guess some clients remember 2008-2009, and 2000-2001.

Tue, 03/15/2016 - 09:51 | 7316580 Arnold
Arnold's picture

Cherry picking, I know, but there are some precogs in the House of Tyler.

Tue, 03/15/2016 - 09:34 | 7316503 Bryan
Bryan's picture

If the muppets are selling, then I can almost guarantee another rally to stop them out.

Tue, 03/15/2016 - 10:57 | 7316865 Clint Liquor
Clint Liquor's picture

You are assuming they are selling short instead of just getting the fuck out.

Tue, 03/15/2016 - 09:43 | 7316541 rahtidmon
rahtidmon's picture

Blank of America, has shot it's wad. Nah, they have plenty of squid money to play with, just like Goldman's Sack, Wells Farce-a-go, Shitty Group, and JP's Organ.

Sadly it will take a systemic crash to break them up, and THAT would be painful, yet necessary.

Talk about people not having two cents to rub together.



Tue, 03/15/2016 - 09:44 | 7316548 new game
new game's picture

at 23 x and unlimited cntl-p, all that is needed is a closepin and blindfold, yea btfd.

Tue, 03/15/2016 - 09:44 | 7316549 Seasmoke
Seasmoke's picture

Now when you say BOA you really mean Merrill Lynch, who should have went away with Lehman in 2008.

Tue, 03/15/2016 - 09:45 | 7316556 headhunt
headhunt's picture

Where the hell are they putting the money; under the bed?

Tue, 03/15/2016 - 10:22 | 7316705 rejected
rejected's picture

What's the difference? Lose 0.00000000000000000000000000000000000000000000000000005 % ?? Looking at the long term trend the casino has been hovering over the last couple years. My 401k is so pathetic I took the quarterlies to the gun range as targets.

Tue, 03/15/2016 - 10:31 | 7316735 Grandad Grumps
Grandad Grumps's picture

It is not that people do not believe the rally. It is simply that people have lost all confidence in the rulers of this world. They are evil parasites.

Right now, within the internet, hard scientific evidence is starting to go viral that proves that the controllers of the world have been lying to the people so that they can maintain their parasitic lifestyle with humans as slaves.

This could be the catalyst. The question is whether the controllers released this information intentionally to bring the conflict between slavers and slaves to a head and give them an excuse to rationalize mass extermination. Or, it is hoped, that the revelations have been inspired from God.

Tue, 03/15/2016 - 10:36 | 7316777 Arnold
Arnold's picture

Dad, I found the end of the World Wide Web, many years ago.

It looked like the Blue screen of Death. I was able to back out to the smut site I was just looking at.

My advise to you , Dad, is get out in the fresh air and meet a few people worth knowing.

Tue, 03/15/2016 - 11:45 | 7316917 Grandad Grumps
Grandad Grumps's picture

LOl ... I would make the same suggestion to you ...maybe get out of your cave and meet some people, enjoy the world, take some photos and while you are at it consider that for every 20 miles distance, ~ 170 feet supposedly disappears behind the curvature of the earth (hint: use a zoom lens when taking your photos)... simple highschool sophomore geometry (or at least it was when I went to school).

Can you see any evidence of this on the planet? If not, then what does it imply? Consider who you are working for and why it might not be the best idea.

Death does not frighten me (much). I am supposed to be dead already. Eternal life is something that does frighten me.

Tue, 03/15/2016 - 14:39 | 7318042 you know they a...
you know they are lying because they are talking's picture

Did I misunderstand you, or are you saying you think the world is flat, because you cant see its curvature with a telescope? Is that what you just said? Surely I misunderstood.

If not, I suggest you go to any beach in the world. Look out at the horizon. You can clearly see a curvature.

Tue, 03/15/2016 - 17:49 | 7318745 Grandad Grumps
Grandad Grumps's picture

Actually, I did not say the world is flat. What I implied is that given the math and the observations, the common story of the structure of the world appears to be a complete lie. If you think the world is flat because the math proves it, then that is your decision. I cannot see a curvature from any beach in the world (at least not one that would indicate that we live on a world that has a circumference of 24901 miles) and I have been to many beaches. I can see waves. I can see ships ... and at some point they go out of view. However, I cannot see a curvature to the left or right and I can see ships 10 miles out when their water line should be 41.4 feet below the horizon. At 5 miles out the waterline would be 10.3 feet below the horizon. Are you so ignorant or unobservant that you have never checked the highschool math and made an observation for yourself?

From the Indiana Dunes Web Site: "Indiana Dunes National Lakeshore West Beach a great view of the Chicago skyline"

Using Mapquest and a straighedge, the Chicago Skyline is about 26 miles across Lake Michigan from the West Beach of the Dunes. This would put the ground level of the Skyline at 295 feet below the horizon due to the curvature of the earth ... almost 30 stories. Great view? 

Probably a good place to take pictures with my telephoto lens.

Thu, 03/17/2016 - 06:41 | 7325512 you know they a...
you know they are lying because they are talking's picture

Its easy I guess to only see the evidence you want to see that correlates with things that you want to believe anyway.

You are what I think of when I think of Republicans. I suppose this will get me some downvotes.

It is people like you that have allowed things around the world to get as bad as they are. It is people like you that cause me to believe there is no hope for us.

You are the one that the politicians use to get what they want. Which is more power and money, and most importantly to you; more forcing your religion onto others.

It dosen't really matter how corrupt they get. It dosen't matter how many wars they create. It dosen't matter how many people they kill. It dosen't matter that they keep taking more of our liberties, and that we are living in a police state.

YOU, will still elect the same people. Because you are easily manipulated by them. They can do no wrong to you. I would bet everything I own that you still support the Bush wars as being justified. Everything Obama has done has been bad. But nothing a Repulican can do bothers you. There is no evil committed that could make you see they are evil as well.

Sure lots of people are joining the Trump bandwagon. But not you I suspect. Because you are a true republican. And real republicans will never do anything except what they are told to do. And that is obvious in the latest republican primary voting. In the states that only republicans can vote, Trump has been failing. He is doing well in the states where anyone can vote for any candidate. Its actually Democrats crossing lines that are supporting Trump, not diehard republicans.

You only care at every election about a few things. Any politician you support must formost swear his allegiance to your god. They must be opposed to abortion. They must be for government support of religious institutions. They must support "creationism" in our schools.

You are so easy. They can just promise you the things that push your buttons, and then continue with their evil plans.

You are the problem.

It takes a "special" type of person to still believe the world is not round in this day and age; when you have a multitude of information at our finger tips. Even just looking for yourself is enough to convince most people. But not you. You are "special".


Tue, 03/15/2016 - 10:41 | 7316794 Turin Turambar
Turin Turambar's picture

BS, no way in Hades buybacks are fueling this runup.  CB's are buying more dogshit paper than anybody, and they don't mind.  When you can create fiat out of nothing, why not buy every company on the planet before people realize that their currency isn't worth anything?  Greatest theft in the history of the planet.

Tue, 03/15/2016 - 12:54 | 7317476 herkomilchen
herkomilchen's picture

The central banks print money.  They use it to buy government bonds.  Which pays for artificially low interest rates.  Companies obtain money by selling their own bonds at low interest and high leverage levels.  That raises the funds needed to buy back their stocks.

If you follow the route of the value transfer, you'll see the central banks are buying stocks.  They are just doing it indirectly by subsidizing the corporate buybacks.

Tue, 03/15/2016 - 11:34 | 7317071 Paddyo2
Paddyo2's picture

I can't agree with you more. I call BS too.
What I really don't understand in this whole house of cards we are sitting Under is to witness what I saw this morning and every single day; the average Joe getting out of his new pickup truck, walk on over to the BoFA ATM with his BoFA debit card to extract fiat dollars from the institution that will eventually take ALL of his money when they so choose. Why are people still allowing these banks to have their business??

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