Institutional investors continue to offload stocks at a steady pace for the 10th time in 11 weeks, while retail investors remain unflinchingly bullish in their stance.
What Happened: On Wednesday, in a post on X, The Kobeissi Letter highlighted the stark divergence between institutional and retail sentiments in recent weeks. “Institutional investors are STILL selling to retail.”
Citing data from Bank of America Global Research, the post notes that last week, institutional investors sold $800 million in single stocks and ETFs, adding to the $2.4 billion in outflows recorded the prior week, and bringing the total to $8.5 billion over the past four weeks. “This marks their 10th week of selling out of the last 11,” it says.
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In sharp contrast to this institutional selloff, retail investors have now been net buyers for 30 of the last 32 weeks. “Retail and hedge funds purchased +$1.2 billion and +$400 million, respectively,” it says, over the past four weeks.
“Wall Street vs Main Street continues,” the post concludes, underscoring continued appetite from smaller players and opportunistic funds, while the larger institutions head for the exit.
Why It Matters: Unfazed by trade, tariffs, and other related geopolitical tensions, retail investors plowed a record $122 billion into equity ETFs through May 2025 this year, even as institutional investors pulled out $25 billion during this same period.
According to Fundstrat’s Tom Lee, institutional investors hate the “V-Shaped” recovery the markets have made from their April lows. “I can tell you, our clients, institutional clients, remain very skeptical. This is the most hated V-shaped rally.”
Early this week, it was also noted that corporate insiders have been offloading shares in their respective companies at a record pace. Only 11% of companies with insider activities saw more buying than selling, the lowest figure on record.
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