Pessimism among individual investors about the short-term outlook for stocks decreased in the latest AAII Sentiment Survey. Meanwhile, optimism increased and neutral sentiment remained unchanged.
Bullish sentiment, expectations that stock prices will rise over the next six months, decreased 1.8 percentage points to 38.0%. Bullish sentiment is above its historical average of 37.5% for the second time in eight weeks.
Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, was unchanged at 22.7%. Neutral sentiment is unusually low and is below its historical average of 31.0% for the 27th consecutive week.
Bearish sentiment, expectations that stock prices will fall over the next six months, increased 1.8 percentage points to 39.3%. Bearish sentiment is above its historical average of 31.5% for the 31st consecutive week.
The bull-bear spread (bullish minus bearish sentiment) decreased 3.6 percentage points to –1.4%. The bull-bear spread is below its historical average of 6.5% for the eighth consecutive week.
This week’s special question asked AAII members which factor is most influencing their six-month outlook for stocks.
Here is how they responded:
The economy and/or inflation: 37.5%
Geopolitics: 28.6%
Monetary policy/interest rates: 18.3%
Valuations: 10.7%
Other: 4.9%
This week’s Sentiment Survey results:
Bullish: 38.0%, down 1.8 points
Neutral: 22.7%, up 0.0 points
Bearish: 39.3%, up 1.8 points
Historical averages:
Bullish: 37.5%
Neutral: 31.0%
Bearish: 31.5%