AAII Sentiment Survey: Optimism Pulls Back Below 30%

Optimism among individual investors about the short-term direction of the stock market reversed some of its recent gains, falling for the first time in four weeks. The latest AAII Sentiment Survey also shows a rebound in pessimism and modestly higher neutral sentiment.

Bullish sentiment, expectations that stock prices will rise over the next six months, fell 6.0 percentage points to 29.4%. The drop keeps optimism below its historical average of 38.0% for the 31st time this year and the 19th time in 20 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, increased by a slight 0.5 percentage points to 37.4%. Neutral sentiment is above its historical average of 31.5% for the 18th time in 19 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, rose 5.4 percentage points to 33.3%. Pessimism is above its historical average of 30.5% for the eighth time in 10 weeks.

All three indicators are currently within their typical ranges.

Many individual investors have been monitoring trade negotiations, particularly between the U.S. and China. Additionally, many AAII members expect a recession to start within the next 12 to 24 months. Also having an influence on sentiment are Washington politics, geopolitics, valuations, corporate earnings, monetary policy and interest rates.

This week’s AAII Sentiment Survey results:

•  Bullish: 29.4%, down 6.0 percentage points
•  Neutral: 37.4%, up 0.5 percentage points
•  Bearish: 33.3%, up 5.4 percentage points

Historical averages:

• Bullish: 38.0%
• Neutral: 31.5%
• 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.