AAII Sentiment Survey: Optimism Above 40% for Second Consecutive Week

Slightly more than two out of five investors are optimistic about the short-term direction of stock prices for the second consecutive week. The latest AAII Sentiment Survey also shows a modest increase in pessimism and a decline in neutral sentiment.

Bullish sentiment, expectations that stock prices will rise over the next six months, is 0.4 percentage points higher at 40.7%. Optimism was last higher on May 8, 2019 (43.1%). Bullish sentiment is above its historical average of 38.0% for just the 10th time this year.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, declined 1.3 percentage points to 34.5%. Even with the decline, neutral sentiment is above its historical average of 31.5% for the 25th time in 26 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, rose 0.9 percentage points to 24.8%. Pessimism is below its historical average of 30.5% for a fourth consecutive week.

As stated above, bullish sentiment is above 40% for the second consecutive week. This has not happened since August 29, 2018, and September 5, 2018 (43.5% and 42.2%, respectively). Since then optimism has only been above its historical average on consecutive weeks two other times: February 20, 2019, and February 27, 2019, (39.3% and 41.6%, respectively); and May 1, 2019, and May 8, 2019 (39.0% and 43.1%, respectively).

At current levels, all three indicators are within their typical ranges.

The improvement in optimism occurred as the major indexes set new 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: 40.7%, up 0.4 percentage points
• Neutral: 34.5%, down 1.3 percentage points
• Bearish: 24.8%, up 0.9 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.