Wall Street equity allocations remain near four-year high, BofA says
SPY•BofA Securities’ Sell Side Indicator held at 57.2% in October, its highest level since March 2022 and 0.3 percentage points from a sell signal. Analysts said the outlook for S&P 500 earnings remained strong, with above-consensus guidance outnumbering below-consensus guidance by 2.3 to 1.
1. Indicator stays elevated
BofA Securities’ Sell Side Indicator, which tracks sell-side strategists’ average recommended equity allocation in a balanced fund, was unchanged at 57.2% in October. The contrarian gauge remains in neutral territory, but is 0.3 percentage points from a sell signal.
2. Market shifts and earnings
The S&P 500 slipped nearly 1% in October, while the Russell 1000 Value Index outperformed its growth counterpart by 10 percentage points, the widest gap since 2001. The equal-weighted S&P 500 beat the cap-weighted index by 6 percentage points, its largest advantage since 2009. With third-quarter results from 60% of S&P 500 companies reported, the ratio of above- to below-consensus earnings-per-share guidance was 2.3 to 1, BofA analysts said.
