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Optimism among individual investors about the short-term direction of the stock market is at its highest level of the year. The latest AAII Sentiment Survey also shows pessimism rising for just the second time in seven weeks.
Bullish sentiment, expectations that stock prices will rise over the next six months, increased 1.2 percentage points to 33.3%. This is the highest level of optimism recorded since December 30, 2021 (37.7%). Despite recent increases, bullish sentiment remains below its historical average of 38.0% for the 39th consecutive week.
Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, declined 1.7 percentage points to 29.5%. Neutral sentiment is below its historical average of 31.5% for the 15th time in 17 weeks.
Bearish sentiment, expectations that stock prices will fall over the next six months, increased 0.5 percentage points to 37.2%. Bearish sentiment is above its historical average of 30.5% for the 38th time out of the past 39 weeks.
Both bullish and bearish sentiment as well as the bull-bear spread are currently within their typical ranges.
Optimism has improved as the stock market has rebounded, but the year’s declines along with inflation, corporate earnings and concerns about the possibility of a recession are weighing on individual investors’ short-term expectations for the stock market. Also influencing sentiment are monetary policy, the coronavirus pandemic, politics and the ongoing invasion of Ukraine by Russia.
This week’s AAII Sentiment Survey results:
- Bullish: 33.3%, up 1.2 percentage points
- Neutral: 29.5%, down 1.7 percentage points
- Bearish: 37.2%, up 0.5 percentage points
Historical averages:
- Bullish: 38.0%
- Neutral: 31.5%
- Bearish: 30.5%
The AAII Sentiment Survey has been conducted weekly since July 1987. The survey and its results are available online.
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