AAII Sentiment Survey: Optimism Rebounds but Remains Below 30%

Optimism among individual investors about the short-term direction of stock prices continued to rebound but remains below 30% for the sixth consecutive week. The latest AAII Sentiment Survey also shows lower levels of neutral and bearish sentiment.

Bullish sentiment, expectations that stock prices will rise over the next six months, rose 2.7 percentage points to 29.5%. This is 18th time this year that optimism is below its historical average of 38.5%.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, declined 0.6 percentage points to 38.4%. Neutral sentiment is above its historical average of 31.0% for the 20th time in 21 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, fell 2.1 percentage points to 32.1%. Pessimism is above its historical average of 30.5% for the sixth consecutive week.

Bullish sentiment is back within its typical range for the first time since early May. Neutral and bearish sentiment remain within their typical ranges.

The survey period runs from Thursday through Wednesday. Most of this week’s responses were recorded before yesterday’s Federal Open Market Committee (FOMC) meeting statement was issued.

Many individual investors have been monitoring trade negotiations, particularly between the U.S. and China. The recent rebound in stock prices may have relieved some concerns about a steeper decline in stock prices occurring, though others still anticipate a larger drop than we recently saw. Also having an influence are monetary policy, Washington politics (including President Trump), geopolitics, valuations, corporate earnings and the pace of economic growth.

This week’s AAII Sentiment Survey results:

• Bullish: 29.5%, down 2.7 percentage points
• Neutral: 38.4%, down 0.6 percentage points
• Bearish: 32.1%, down 2.1 percentage points

Historical averages:

• Bullish: 38.5%
• Neutral: 31.0%
• Bearish: 30.5%

Want to weigh in? Take the survey yourself and see results online at www.aaii.com/sentimentsurvey.

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See more Sentiment Survey results.