Optimism among individual investors about the short-term outlook for stocks increased in the latest AAII Sentiment Survey. Meanwhile, neutral sentiment and pessimism decreased.
Bullish sentiment, expectations that stock prices will rise over the next six months, increased 2.0 percentage points to 34.6%. Bullish sentiment is below its historical average of 37.5% for the ninth time in 11 weeks.
Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, decreased 0.4 percentage points to 18.9%. Neutral sentiment is unusually low and is below its historical average of 31.0% for the 30th consecutive week.
Bearish sentiment, expectations that stock prices will fall over the next six months, decreased 1.6 percentage points to 46.5%. Bearish sentiment is unusually high and is above its historical average of 31.5% for the 34th consecutive week.
The bull-bear spread (bullish minus bearish sentiment) increased 3.5 percentage points to –11.8%. The bull-bear spread is below its historical average of 6.5% for the 11th consecutive week.
This week’s special question asked AAII members how they believe the November midterm elections will impact stock prices.
Here is how they responded:
I don’t expect a meaningful impact: 32.1%
It depends on which party wins control of Congress: 28.2%
The outcome will likely be bullish for stocks: 17.6%
The outcome will likely be bearish for stocks: 15.3%
Not sure/no opinion: 6.9%
This week’s Sentiment Survey results:
Bullish: 34.6%, up 2.0 points
Neutral: 18.9%, down 0.4 points
Bearish: 46.5%, down 1.6 points
Historical averages:
Bullish: 37.5%
Neutral: 31.0%
Bearish: 31.5%
See more Sentiment Survey results.