Bank of America: The S&P 500 Index has limited upward room in the short term

Media reports indicate that the U.S. Bank's stock market contrarian indicator rose last month, reflecting a surge in Wall Street sentiment. Given that this indicator is still in the "neutral" zone rather than at a "buy" or "sell" threshold, it means that last year's extreme pessimism about the stock market, which once fueled its rise, no longer exists. Savita Subramanian and others stated in a report to clients that in July, the so-called sell-side indicator (SSI) rose by 30 basis points to 55.6%. This index tracks the average recommended level of U.S. equity allocation for balanced funds by strategists. The bank's head of U.S stocks and quantitative strategies wrote that while this measure is at its highest since early 2022, it remains below average levels indicating optimism has not yet reached dangerous levels." Subramanian said there is limited upside for SP 500 Index in short term but opportunities remain within the index for good returns.