AAII Sentiment Survey: Bullish Sentiment Rebounds

The results from the latest AAII Sentiment Survey show a strong rebound in bullish sentiment. In addition, the number of investors describing their outlook for stocks as “neutral” decreased significantly compared to last week’s results.

Bullish sentiment, expectations that stock prices will rise over the next six months, rose 7.4 percentage points to 29.9%, but remained below 30% for the second consecutive week. This is the second consecutive week and the eighth out of the past 11 weeks that optimism is below its historical average of 38.0%.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, pulled back by 7.3 percentage points to 30.9%. This decline follows two weeks of significant increases in neutral sentiment. The historical average is 31.5%.

Bearish sentiment, expectations that stock prices will fall over the next six months, declined by just 0.1 percentage points to 39.2%. This is the second consecutive week and the seventh time out of the last eight weeks that bearish sentiment is above its historical average of 30.5%.

At current levels, all three readings are within their typical historical ranges. Pessimism remains near the upper end of its range, however. The breakpoint between typical and unusually high bearish readings is 40.1%.

The return to normalcy from the coronavirus pandemic, monetary and fiscal stimulus and inflationary pressures are influencing individual investors’ outlook for stocks. Other factors include earnings, valuations and the Biden administration’s initiatives.

See more Sentiment Survey results.