Some of the market’s biggest investors were taking risk off the table ahead of this week’s busy slate of earnings reports and a Federal Reserve meeting, according to Bank of America. Strategist Jill Carey Hall said in a note to clients Tuesday that last week the bank’s clients sold historically high amounts of individual stocks. “Last week ( S & P 500 +0.7%), clients were big net sellers of US equities ($6.96B, biggest weekly outflow since Nov. 2020) after buying equities the prior three weeks. Single stocks saw record outflows,” the note said. The selling was driven by hedge funds and institutional clients, according to the note. The moves were focused on large cap stocks, and technology names in particular. “Clients sold stocks in seven of the 11 sectors, led by Tech and Communication Services, with record weekly outflows from both sectors. Previously, Comm. Svcs. had the longest buying streak of any sector (prior 10wks),” the note said. Selling in those two areas is notable as they include many of the stocks that have driven this year’s market rally. The Technology Select Sector SPDR Fund (XLK) , for example, is up more than 40% for the year. XLK YTD mountain Tech sector funds like the XLK are outperforming in 2023. Several of the biggest tech and communications companies have earnings reports this week. Quarterly reports from Alphabet and Microsoft are due out after the market close Tuesday. Meta Platforms is scheduled to release its results on Wednesday afternoon. The Federal Reserve is set to announce its updated rate policy on Wednesday, another source of potential volatility that could have spurred investors to cut back their equity exposure. — CNBC’s Michael Bloom contributed to this report.
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