Landon Capital

BofA: Clients sold $3.1 billion of US equities last week; tech inflows continue.

Bank of America Securities said that last week its clients were net sellers of US equities for the second consecutive week, with outflows totaling $3.1 billion.

Excluding untagged flows, the bank’s clients were net buyers of single stocks and equity exchange-traded funds (ETFs), with ETF inflows observed across most sectors, sizes, and styles.

Hedge funds were the primary sellers, marking their third straight week of selling, while private and institutional clients were net buyers for the fifth and first time in five weeks, respectively. Large and mid-cap stocks saw inflows for the fourth consecutive week, whereas small caps experienced outflows for the first time in five weeks, BofA noted.

Corporate client buybacks by BofA accelerated, recording the fifth-largest week in history since 2010, and have been above typical seasonal levels as a percentage of the S&P 500 market cap for the last 16 weeks.

“While this report does not include sector-level granularity on executed buybacks, announced S&P 500 buybacks YTD have been dominated by Tech/Comm. Svcs,” BofA strategists highlighted.

Clients purchased stocks in five of the eleven sectors, with Technology seeing inflows for the fourth consecutive week. Communication Services continues to have the longest buying streak at 13 weeks, while Consumer Discretionary saw the largest outflows. After experiencing outflows for most weeks this year, Real Estate stocks have seen inflows for the last four weeks.

“Clients bought ETFs in six of 11 sectors, led by Financials. Tech ETFs saw the largest outflows,” the report states.


Polestar posts loss, plans steps to offset tariffs on China-made EVs.


STOCKHOLM (Reuters) – Electric vehicle (EV) maker Polestar (NASDAQ: PSNY) said it will have to take steps to offset hefty EU and U.S. import tariffs on its Chinese-made electric cars as it posted a first-quarter operating loss on Tuesday.

The Swedish-based company, controlled by China’s Geely, currently makes all its EVs in China.

Its new model, the Polestar 3, will be made in the United States from the end of this summer and the Polestar 4 will be produced in South Korea starting in the second half of 2025.

Polestar has been working for some time to reduce its reliance on Chinese production.

Steps it plans to announce later this year could include material cost reductions across Polestar’s supply chain or other actions, a spokesperson said, but added the plans do not include further job cuts.

In the meantime, Polestar faces provisional tariffs of 20% proposed by the European Commission on cars it imports into the European Union and duties of more than 100% in the United States.

Polestar told Reuters there would be no customer delays due to tariffs and that it was not possible to produce the Polestar 4 in any other location.

Like others it faces a worsening demand outlook for EV makers, where a price war started last year by rival Tesla (NASDAQ: TSLA) has left many automakers struggling to sell cars they have already produced.

The company has a cash flow break-even target for 2025 which it risks not meeting due to the tariffs and price war.


WideOpenWest cut to underperform at Raymond James


Raymond James downgraded WideOpenWest (WOW) to Underperform, citing limited upside potential following a proposed acquisition.

The company received a non-binding offer of $4.80 per share from its majority shareholder and affiliates, which aligns with Raymond James’ previous price target of $5. However, the stock currently trades above the offer price.

While Raymond James doesn’t rule out a higher bid, they express skepticism due to potential “hidden costs” for the buyer related to upgrades for WideOpenWest’s legacy infrastructure. These costs could suppress the acquisition multiple.

The analysts see no major regulatory hurdles delaying the deal’s closure, anticipating only routine license transfers and utility commission approvals.

Given the current price exceeding the offer and better opportunities elsewhere, analysts at Raymond James see limited upside for WideOpenWest stock. They maintain their 2024 and 2025 estimates but downgrade the rating to Underperform.

Furthermore, analysts at Raymond James highlight WideOpenWest’s current valuation of 5.5x EV/EBITDA for 2025 estimates. This falls short of typical private market valuations in the range of 9-12x and even the company’s own asset sale of lower-quality markets at 11x in 2021.


European fund flows at their best level since early 2022: UBS


Euro asset managers saw active fund outflows of €0.7 billion in June, which is an annualized -0.9% of assets under management (AUM), UBS analysts said in a note on Monday. However, the 3-month average outflow rate improved to -0.3% of AUM, marking the best level since January 2022.

The outflows were primarily driven by Abrdn, which saw £1.1 billion in outflows, and ASHM with £0.1 billion. In contrast, the other asset managers recorded net inflows.

Within the group, fixed-income flows remained strong, equity flows were relatively flat, and multi-asset fund flows continued to be negative.

“For the fifth straight month, Man Group recorded the strongest active fund flows,” analysts highlighted.

Beyond Europe, June was a positive month for major global equity indices, with the S&P 500, MSCI World, TOPIX, and MXAPJ indices all rising by 2% to 4%. However, higher political uncertainty led to a decline of 1% to 6% in European equity markets.

“Meanwhile, European equity market volatility jumped in June, while US equity market volatility moderated. The major global bond indices we track were up 1% in June,” analysts noted.

The shares of traditional Euro asset managers fell by 7.0% in June on a weighted average basis, resulting in a 580-basis point underperformance compared to the STOXX 600. Within this group, BMED recorded the best performance with a 2% decline, while ASHM was the worst performer, with a 13% drop.

As a group, EU asset managers were valued at 9.6x forward consensus earnings per share (EPS) at the end of June, down from 10.4x in May. This valuation is approximately 1.5 standard deviations below the historical average of 12.7x.