AAII Sentiment Survey: Bearish Sentiment Jumps

Bearish sentiment among individual investors about the short-term outlook for stocks increased in the latest AAII Sentiment Survey. Meanwhile, both optimism and neutral sentiment decreased.

Bullish sentiment, expectations that stock prices will rise over the next six months, decreased 4.3 percentage points to 40.5%. Bullish sentiment is above its historical average of 37.5% for the 39th time in 40 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, decreased 7.9 percentage points to 22.0%. Neutral sentiment is now unusually low and is below its historical average of 31.5% for the fifth consecutive week.

Bearish sentiment, expectations that stock prices will fall over the next six months, increased 12.3 percentage points to 37.5%. Bearish sentiment is above its historical average of 31.0% for the second time in nine weeks.

The bull-bear spread (bullish minus bearish sentiment) decreased 16.6 percentage points to 3.1%. The bull-bear spread is below its historical average of 6.5% for the first time in 14 weeks.

This week’s special question asked AAII members what they thought about the Federal Reserve’s decision to keep interest rates unchanged.

Here is how they responded:

• It was the right decision: 48.5%
• They should have cut rates: 33.8%
• They should have raised rates: 8.9%
• No opinion/not sure: 8.4%

See more Sentiment Survey results.