Investors are selling the rally anyway

Rally? More like a trust exercise

The S&P 500 just logged a monster week and set a fresh record, which is usually the part where investors pop champagne. Instead, Bank of America’s flow data says a lot of professional money was headed for the exits, not the dance floor.

The slow money said “no thanks”

For the week ending April 17, BofA clients were net sellers of U.S. equities, with single-stock outflows hitting $5.1 billion. Institutional clients did most of the dumping, private clients kept selling for a sixth straight week, and only hedge funds were net buyers — because apparently somebody had to bring snacks to this party.

What they were selling into

This wasn’t a sleepy market, either. The S&P 500 climbed 4.5% in five trading days to 7,126.06, while the Nasdaq 100 jumped 6.8% and Microsoft and Tesla ripped higher. So the flow data is basically saying: the rally got stronger, but the conviction from long-only investors got weaker.

Why that matters

The easy answer is that valuations are looking stretched and corporate buybacks aren’t showing up with the same force as usual. When the index is making new highs but institutions and corporations are both stepping back, that’s a little like a house party where the music is loud and the exit signs are glowing.

Big picture: momentum can carry a market a long way — until the crowd that usually underwrites it decides to leave early.