AAII Sentiment Survey: Nothing Ghoulish as Neutral Leads

It may be Halloween, but there is nothing ghoulish about our survey this week as the largest number of individual investors described their outlook for stocks as “neutral” in the latest AAII Sentiment Survey. Additionally, optimism declined while pessimism slightly increased.

Bullish sentiment, expectations that stock prices will rise over the next six months, pulled back by 1.6 percentage points to 34.0%. Optimism is below its historical average of 38.0% for the 36th time this year and the 24th time in 25 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, rose 1.5 percentage points to 37.6%. Neutral sentiment is above its historical average of 31.5% for the 23rd time in 24 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, edged up 0.2 percentage points to 28.4%. Pessimism is below its historical average of 30.5% on consecutive weeks for the first time since July 10, 2019, and July 17, 2019.

At current levels, all three indicators are within their historical averages.

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.

Most AAII members voted in this week’s survey before yesterday’s announcement of a third rate cut by the Federal Open Market Committee (FOMC). Our survey period runs from Thursday through Wednesday each week. Reminders to take the survey are emailed to a rotating group of AAII members every Monday.

This week’s AAII Sentiment Survey results:

• Bullish: 34.0%, down 1.6 percentage points
• Neutral: 37.6%, up 1.5 percentage points
• Bearish: 28.4%, up 0.2 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.