The US stock market performed well in 2023, with the S&P 500 index rising 24% and the NASDAQ 100 index achieving its best performance since 1999. However, Bank of America stated that retail investors may have missed this "prosperous era".
According to customer traffic data from Bank of America Corp., retail investors fled the US stock market last year. At the same time, hedge funds seem to be smart investors, investing heavily in the stock market as it continues to soar.
Strategists led by Jill Carey Hall stated in a report to clients on Wednesday that overall, Bank of America's clients were net buyers in 2023, injecting $66 billion into the US stock market.
Among them, the purchases by enterprises and hedge funds were the most significant, marking the first net inflow into this asset category in four years. On the other hand, institutions and private clients are net sellers, with the latter withdrawing the most funds from the US stock market since 2019.
The US stock market has been soaring in 2023 due to economic rebound, market expectations that the Federal Reserve will soon shift towards more loose monetary policy, and expectations that artificial intelligence (AI) will trigger a technological boom. However, in 2024, the US stock market experienced a "black door", with technology stocks leading the way and US stocks falling for two consecutive days.
On the other hand, the above report also stated that Bank of America's clients bought a large amount of technology and communication services stocks in 2023, while selling industrial, energy, essential goods, and utility stocks. Data from Bank of America since 2008 shows that the cumulative outflow of industrial stocks has reached a historic high.
Meanwhile, the American business community is also busy buying their own stocks. Compared to 2022, corporate customer repurchases accelerated last year, accounting for approximately 0.3% of the total market value of the S&P 500 index in 2023, compared to 0.2% in the previous year. However, repurchase has not yet recovered to the level before the COVID-19 epidemic, which accounted for about 0.4% of the benchmark market value of the US stock market at that time.