AAII Sentiment Survey: Neutral Sentiment Dips

Neutral sentiment among individual investors about the short-term outlook for stocks decreased in the latest AAII Sentiment Survey. Meanwhile, both optimism and pessimism increased.

Bullish sentiment, expectations that stock prices will rise over the next six months, increased 0.5 percentage points to 42.5%. Bullish sentiment is above its historical average of 37.5% for the sixth time in nine weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, decreased 3.5 percentage points to 27.5%. Neutral sentiment is below its historical average of 31.5% for the 77th time in 79 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, increased 3.0 percentage points to 30.0%. Bearish sentiment is below its historical average of 31.0% for the 48th time in 50 weeks.

The bull-bear spread (bullish minus bearish sentiment) decreased 2.6 percentage points to 12.5%. The bull-bear spread is above its historical average of 6.5% for the 10th time in 49 weeks.

This week’s special question asked AAII members what they think about the Federal Reserve’s decision to cut interest rates by 0.25 percentage points.

Here is how they responded:

• It was the right decision: 51.1%

• They should have left rates unchanged: 31.2%

• They should have cut rates: 8.4%

• They should have raised rates: 3.1%

• Not sure/no opinion: 6.1%

This week’s Sentiment Survey results:

Bullish: 42.5%, up 0.5 points
Neutral: 27.5%, down 3.5 points
Bearish: 30.0%, up 3.0 points

Historical averages:

Bullish: 37.5%
Neutral: 31.5%
Bearish: 31.0%

See more Sentiment Survey results.