AAII Sentiment Survey: Optimism Is Above Average for First Time Since July

Individual investor optimism about the short-term direction of the stock market is above average for the first time since July according to the latest AAII Sentiment Survey. Additionally, pessimism fell to a six-month low.

Bullish sentiment, expectations that stock prices will rise over the next six months, jumped 6.3 percentage points to 40.3%. Optimism was last higher on May 8, 2019 (43.1%). Bullish sentiment is above its historical average of 38.0% for just the ninth time this year.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, pulled back by 1.8 percentage points to 35.8%. Even with the decline, neutral sentiment is above its historical average of 31.5% for the 24th time in 25 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, fell 4.5 percentage points to 23.9%. Pessimism was last lower on May 8, 2019 (23.2%). This is the third consecutive week bearish sentiment is below its historical average of 30.5%.

This week’s rise in optimism ends a 13-consecutive-week streak of below-average readings. At current levels, all three indicators are within their historical averages.

The shift in sentiment is occurring as the major indexes are setting record highs. Many individual investors continue to monitor 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: 40.3%, up 6.3 percentage points
• Neutral: 35.8%, down 1.8 percentage points
• Bearish: 23.9%, down 4.5 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.