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Pessimism among individual investors about the short-term direction of the stock market fell for the fourth straight week in the latest AAII Sentiment Survey. Optimism, meanwhile, is above 30% for the first time in over two months.
Bullish sentiment, expectations that stock prices will rise over the next six months, rose 2.8 percentage points to 30.6%. This is the highest level of optimism recorded since June 2, 2022 (32.0%). Despite recent increases, bullish sentiment remains below its historical average of 38.0% for the 37th consecutive week.
Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, declined 1.6 percentage points to 30.6%. Neutral sentiment is below its historical average of 31.5% for the 13th time in 15 weeks.
Bearish sentiment, expectations that stock prices will fall over the next six months, declined 1.2 percentage points to 38.9%. Pessimism was last lower on June 2, 2022 (37.1%). Bearish sentiment is above its historical average of 30.5% for the 36th time out of the past 37 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: 30.6%, up 2.8 percentage points
- Neutral: 30.6%, down 1.6 percentage points
- Bearish: 38.9%, down 1.2 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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