Wall Street Sentiment Indicator Shows S&P 500 Gaining 16% Over Next Year
- Contrarian gauge has record as reliable forward-return signal
- Companies, consumers ‘could hold up better than expected’
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There’s a bright side for investors reeling from a rare three-month slide in US stocks: The gloom is setting the stage for gains ahead, if history is any guide.
A contrarian indicator from Bank of America Corp. that compiles Wall Street strategists’ recommended allocation to stocks is getting closer to flashing “buy.” The gauge’s current level implies a 15.5% price return for the S&P 500 Index over the next 12 months, strategists led by Savita Subramanian said Wednesday in a note to clients.