Dip-Buyers Abound for U.S. Stocks After Latest Trade Tumult

(Bloomberg) -- U.S. equities are clawing back some of their losses triggered by the latest trade war flare-up. Who’s buying the dip? Using Bank of America Corp. clients as a proxy, it appears to be just about everyone.

BofA clients snapped up $5.6 billion of stocks last week as the S&P 500 Index retreated 3.1%, according to data the bank released Tuesday. That was the second-most in any week since 2008. Institutions drove most of the inflows, though hedge funds and individuals were also net buyers. Companies themselves also continued to move in, with the year-to-date corporate buyback rate holding at 12%.

“Flows suggest clients remained optimistic despite the announcement of additional tariffs on Chinese goods and more companies cutting guidance/citing tariff impacts,” BofA strategists led by Jill Carey Hall wrote in a note.

The S&P 500 capped its worst week of 2019 in the five days through Friday after President Donald Trump disquieted the market with a surprise announcement of a new round of tariffs on Chinese goods. The sell-off worsened Monday as China retaliated by devaluing its currency. The market stabilized Tuesday after a drop of as much as 6% from its July 26 record close.

The BofA data show buying was broad-based across both single stocks and exchange-traded funds for three straight weeks, a pattern last seen in mid-to-late May, when the market sold off due to a tariff hike. Clients also bought stocks across size segments, with record inflows into large caps last week.

To contact the reporter on this story: Richard Richtmyer in New York at rrichtmyer@bloomberg.net

To contact the editors responsible for this story: Courtney Dentch at cdentch1@bloomberg.net, Morwenna Coniam, Dave Liedtka

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