AAII Sentiment Survey: Neutral Sentiment Falls to a Five-Month Low

The percentage of individual investors describing their short-term outlook for stock prices as neutral is at a five-month low in the latest AAII Sentiment Survey. Pessimism also declined, while optimism rose.

Bullish sentiment, expectations that stock prices will rise over the next six months, rebounded by 8.8 percentage points to 41.8%. Optimism is above its historical average of 38.0% for just the 12th time in the past 52 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, fell 6.4 percentage points to 30.7%. This is the first time that neutral sentiment is below its historical average of 31.5% since August 7, 2019.

Bearish sentiment, expectations that stock prices will fall over the next six months, pulled back by 2.4 percentage points to 27.5%. The drop keeps pessimism below its historical average of 30.5% for the 13th consecutive week.

All three indicators are currently well within their typical historical ranges.

The cooling of tensions between Iran and the U.S., as well as the rising stock prices, are likely contributing to investor optimism. Also affecting sentiment are the trade agreement between the U.S. and China, the November elections, Washington politics, earnings growth, monetary policy, the economy and valuations.

This week’s AAII Sentiment Survey results:

• Bullish: 41.8%, up 8.8 percentage points
• Neutral: 30.7%, down 6.4 percentage points
• Bearish: 27.5%, down 2.4 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.