Adam Gault
Optimism among individual investors about the short-term direction of the stock market fell from a nine-week high according to the latest AAII Sentiment Survey. Neutral sentiment fell but stayed above its historical average, while pessimism rose.
Bullish sentiment, expectations that stock prices will rise over the next six months, fell 2.6 percentage points to 28.4%. Bullish sentiment remains below its historical average of 37.5% for the 56th consecutive week but is no longer at an unusually low level for the second consecutive week.
Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, declined 1.0 percentage points to 35.0%. Neutral sentiment is above its historical average of 31.5% for the fourth consecutive week. At four weeks, this is the longest streak of above-average neutral sentiment since a five-week stretch in March and April 2022.
Bearish sentiment, expectations that stock prices will fall over the next six months, rose 3.6 percentage points to 36.7%. This is the first time since August 2022 that pessimism is below 40% on three consecutive weeks. Bearish sentiment is above its historical average of 31.0% for the 59th time out of the past 62 weeks.
The bull-bear spread (bullish minus bearish sentiment) is –8.3%. This is still below the historical average of 6.6%.
Concerns about the economy, inflation, corporate earnings and volatility in the stock market continue to cause many individual investors to maintain a cautious short-term outlook.
This week’s AAII Sentiment Survey results:
- Bullish: 28.4%, down 2.6 percentage points
- Neutral: 35.0%, down 1.0 percentage points
- Bearish: 36.7%, up 3.6 percentage points
Historical averages:
- Bullish: 37.5%
- Neutral: 31.5%
- Bearish: 31.0%
The AAII Sentiment Survey has been conducted weekly since July 1987. The survey and its results are available online.
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