AAII Sentiment Survey: Neutral Sentiment Falls to a 10-Week Low

The percentage of individual investors describing their six-month outlook for stocks as “neutral” is at a 10-week low. The latest AAII Sentiment Survey also shows increases in both optimism and pessimism.

Bullish sentiment, expectations that stock prices will rise over the next six months, rose 3.7 percentage points to 30.8%. This is a five-week high. Nonetheless, optimism remains below its historical average of 38.0% for the 19th consecutive week and the 24th week this year.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, fell 6.4 percentage points to 23.8%. Neutral sentiment was last lower on May 6, 2020 (23.7%). Neutral sentiment is below its historical average of 31.5% for the 25th week this year.

Bearish sentiment, expectations that stock prices will fall over the next six months, rebounded by 2.7 percentage points to 45.4%. Pessimism remains above its historical average of 30.5% for the 21st consecutive week and the 23rd time this year.

Optimism is back within its typical historical range, while pessimism continues to be at an unusually high level. Neutral sentiment is now near the lowest end of its typical range.

The current level of pessimism reflects concerns about the coronavirus pandemic and the economy. However, some AAII members have been encouraged by the rebound in the stock market from its March lows. Other factors influencing AAII members’ sentiment include the economy, corporate earnings, the November U.S. presidential election and interest rates.

This week’s AAII Sentiment Survey results:

• Bullish: 30.8%, up 3.7 percentage points
• Neutral: 23.8%, down 6.4 percentage points
• Bearish: 45.4%, up 2.7 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.