AAII Sentiment Survey: Pessimism Pulls Back

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

Bullish sentiment, expectations that stock prices will rise over the next six months, increased 1.7 percentage points to 32.1%. Bullish sentiment is below its historical average of 37.5% for the sixth consecutive week.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, increased 0.5 percentage points to 18.1%. Neutral sentiment is unusually low and is below its historical average of 31.5% for the 88th time in 90 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, decreased 2.2 percentage points to 49.8%. Bearish sentiment is unusually high and is above its historical average of 31.0% for the seventh consecutive week.

The bull-bear spread (bullish minus bearish sentiment) increased 3.9 percentage points to –17.7%. The bull-bear spread is unusually low and is below its historical average of 6.5% for the seventh consecutive week.

This week’s special question asked AAII members what they thought about the Federal Reserve’s decision to keep interest rates unchanged.

Here is how they responded:

• They should have raised rates: 13.7%

• It was the right move: 66.5%

• They should have cut rates: 14.2%

• Not sure/no opinion: 5.6%

This week’s Sentiment Survey results:

Bullish: 32.1%, up 1.7 points
Neutral: 18.1%, up 0.5 points
Bearish: 49.8%, down 2.2 points

Historical averages:

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

See more Sentiment Survey results.