AAII Sentiment Survey: Pessimism Jumps to a 6-Week High

Pessimism among individual investors about the short-term direction of the stock market is at a six-week high. The latest AAII Sentiment Survey also shows lower levels of bullish and neutral sentiment.

Bullish sentiment, expectations that stock prices will rise over the next six months, fell 4.1 percentage points to 33.1%. The historical average is 38.0%. Optimism has been below this average during 41 out of the last 52 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, fell 3.9 percentage points to 37.0%. Even with the drop, neutral sentiment is above its historical average of 31.5% for the 33rd time in 34 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, jumped 8.0 percentage points to 29.9%. Pessimism was last higher on November 27, 2019 (30.3%). Nonetheless, bearish sentiment is below its historical average of 30.5% for the 12th consecutive week.

All three indicators are within their typical historical ranges.

The killing of Iranian general Qasem Soleimani likely influenced this week’s results. Several respondents brought up the conflict with Iran and tensions in the Middle East. Also affecting sentiment are the trade agreement between the U.S. and China, Washington politics, earnings growth, the economy, valuations and the stock market’s recent record highs.

This week’s AAII Sentiment Survey results:

• Bullish: 33.1%, down 4.1 percentage points
• Neutral: 37.0%, down 3.9 percentage points
• Bearish: 29.9%, up 8.0 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.