AAII Sentiment Survey: Pessimism Returns
Updates from May 1.
Pessimism among individual investors about the short-term outlook for stocks increased in the latest AAII Sentiment Survey. Meanwhile, optimism and neutral sentiment decreased.
Bullish sentiment, expectations that stock prices will rise over the next six months, decreased 1.0 percentage points to 20.9%. Bullish sentiment is unusually low and is below its historical average of 37.5% for the 16th time in 18 weeks.
Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, decreased 2.7 percentage points to 19.8%. Neutral sentiment is unusually low and is below its historical average of 31.5% for the 41st time in 43 weeks.
Bearish sentiment, expectations that stock prices will fall over the next six months, increased 3.7 percentage points to 59.3%. Bearish sentiment is unusually high and is above its historical average of 31.0% for the 22nd time in 24 weeks. Bearish sentiment has now been above 50% for 10 consecutive weeks, the longest period over 50% in the survey’s history.
The bull-bear spread (bullish minus bearish sentiment) decreased 4.7 percentage points to –38.3%. The bull-bear spread is below its historical average of 6.5% for the 17th time in 19 weeks and is below –20.0% for the 10th consecutive week. This is the longest streak below –20.0% since a 12-week stretch between September 14 and November 30, 1990.
This week’s special question asked AAII members how they expect market volatility to change over the next six months.
Here is how they responded:
Significantly increase: 20.5%
Moderately increase: 25.9%
Remain about the same: 31.6%
Moderately decrease: 19.0%
Significantly decrease: 3.0%
This week’s Sentiment Survey results:
Bullish: 20.9%, down 1.0 points
Neutral: 19.8%, down 2.7 points
Bearish: 59.3%, up 3.7 points
Historical averages:
Bullish: 37.5%
Neutral: 31.5%
Bearish: 31.0%