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Optimism among individual investors about the short-term direction of the stock market rose to its highest level in nine weeks according to the latest AAII Sentiment Survey. Neutral sentiment remained the same, while pessimism fell to its lowest level in 11 weeks.
Bullish sentiment, expectations that stock prices will rise over the next six months, rose 6.9 percentage points to 31.0%. Optimism was last higher on November 17, 2022 (33.5%). Bullish sentiment remains below its historical average of 37.5% for the 55th consecutive week but is no longer at an unusually low level.
Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, is unchanged at 36.0%. Neutral sentiment is above its historical average of 31.5% for the third consecutive week.
Bearish sentiment, expectations that stock prices will fall over the next six months, fell 6.9 percentage points to 33.1%. This is the first time since August 2022 that bearish sentiment has been below 40% on consecutive weeks. Pessimism was last lower on November 3, 2022 (32.9%). Bearish sentiment is above its historical average of 31.0% for the 58th time out of the past 61 weeks.
The bull-bear spread (bullish minus bearish sentiment) is -2.1%. 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: 31.0%, up 6.9 percentage points
- Neutral: 36.0%, unchanged
- Bearish: 33.1%, down 6.9 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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