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Pessimism among individual investors about the short-term direction of the stock market fell to its lowest level in almost five months in the latest AAII Sentiment Survey. Optimism, meanwhile, rose to its highest level since late March.
Bullish sentiment, expectations that stock prices will rise over the next six months, increased 1.6 percentage points to 32.2%. Optimism was last higher on March 24, 2022 (32.8%). Despite recent increases, bullish sentiment remains below its historical average of 38.0% for the 38th consecutive week.
Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, increased 0.6 percentage points to 31.2%. Neutral sentiment is below its historical average of 31.5% for the 14th time in 16 weeks.
Bearish sentiment, expectations that stock prices will fall over the next six months, declined 2.2 percentage points to 36.7%. Pessimism was last lower on March 31, 2022 (27.5%). Bearish sentiment is above its historical average of 30.5% for the 37th time out of the past 38 weeks.
Both bullish and bearish sentiment as well as the bull-bear spread are currently within their typical ranges.
Continued volatility in the major stock indexes along with inflation, corporate earnings and increased chatter about the possibility of a recession are all likely 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: 32.2%, up 1.6 percentage points
- Neutral: 31.2%, up 0.6 percentage points
- Bearish: 36.7%, down 2.2 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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