WALL STREET STOCK BULLISHNESS STAYS ELEVATED IN JUNE, BOFA SAYS
Sentiment in the U.S. equity market remains elevated, with investors maintaining a bullish stance on stocks, according to data compiled by Bank of America analysts.
A gauge of Wall Street's consensus equity allocation was unchanged at 56.2% in June, holding at its highest level since February 2025, BofA data showed.
The Sell Side Indicator is a contrarian sentiment gauge that tends to generate bullish signals when Wall Street sentiment is extremely bearish, and vice versa.
The benchmark S&P 500 CBOE:SPX has gained just over 9% this year despite bouts of volatility tied to swings in oil prices during the Middle East conflict, strains in private credit markets and concerns about lofty equity valuations amid the artificial intelligence boom.
"The current reading of 56.2% is below levels reached in recent market peaks (typically over 59%) and implies a 12% price return over the next 12 months. This is one of our five year-end target models, and is now the most bullish," the analysts said.
Despite the strong sentiment, risks remain, including moderating liquidity support, less favorable equity supply-demand dynamics and a decline in free cash flow relative to earnings.
"We favor large cap value and cyclicals over long duration secular growth, where expectations are lower for the former, capital discipline is stronger, cash flow is healthy and pockets can benefit from inflation," the analysts said.