AAII Sentiment Survey: Optimism Surges, but Remains Below Average

Optimism among individual investors about the short-term direction of the stock market surged, while pessimism plunged in the latest AAII Sentiment Survey. Neutral sentiment is modestly lower.

Bullish sentiment, expectations that stock prices will rise over the next six months, rebounded by 13.3 percentage points to 33.6%. Even with the big increase, optimism remains below its historical average of 38.0% for the 34th time this year and the 22nd time in 23 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, declined 0.4 percentage points to 35.3%. Neutral sentiment is above its historical average of 31.5% for the 21st time in 22 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, pulled back by 12.9 percentage points to 31.1%. Bearish sentiment is above its historical average of 30.5% for the 11th time in 13 weeks.

All three indicators are back within their historical ranges.

This week’s big moves occurred as the S&P 500 index recouped its losses from earlier in the month. In addition, the shift in bullish and bearish sentiment back toward their historical averages follows what had been an unusually low level of optimism and an unusually high level of pessimism.

Many individual investors have been monitoring trade negotiations, particularly between the U.S. and China. Also having an influence on sentiment are Washington politics, geopolitics, valuations, corporate earnings, economic growth, monetary policy and interest rates.

This week’s AAII Sentiment Survey results:

• Bullish: 33.6%, up 13.3 percentage points
• Neutral: 35.3%, down 0.4 percentage points
• Bearish: 31.1%, down 12.9 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.