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 3.7 percentage points to 34.1%. Bullish sentiment is below its historical average of 37.5% for the second time in three weeks.
Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, decreased 3.2 percentage points to 17.5%. Neutral sentiment is unusually low and is below its historical average of 31.0% for the 35th consecutive week.
Bearish sentiment, expectations that stock prices will fall over the next six months, increased 6.9 percentage points to 48.4%. Bearish sentiment is unusually high and is above its historical average of 31.5% for the 39th consecutive week.
The bull-bear spread (bullish minus bearish sentiment) decreased 10.7 percentage points to –14.3%. The bull-bear spread is unusually low and is below its historical average of 6.5% for the 16th 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:
It was the right move: 55.5%
They should have raised rates: 30.7%
They should have cut rates: 6.6%
Not sure/no opinion: 7.3%
This week’s Sentiment Survey results:
Bullish: 34.1%, down 3.7 points
Neutral: 17.5%, down 3.2 points
Bearish: 48.4%, up 6.9 points
Historical averages:
Bullish: 37.5%
Neutral: 31.0%
Bearish: 31.5%
See more Sentiment Survey results.