AAII Sentiment Survey: Optimism Sinks

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

Bullish sentiment, expectations that stock prices will rise over the next six months, decreased 8.6 percentage points to 41.3%. Bullish sentiment is above its historical average of 37.5% for the 54th time in 55 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, increased 3.7 percentage points to 25.5%. Neutral sentiment is below its historical average of 31.5% for the 19th time in 20 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, increased 4.9 percentage points to 33.2%. Bearish sentiment is above its historical average of 31.0% for the first time in 10 weeks.

The bull-bear spread (bullish minus bearish sentiment) decreased 13.4 percentage points to 8.1%. The bull-bear spread is above its historical average of 6.5% for the 28th time in 29 weeks.

This week’s special question asked AAII members what they think about the Federal Reserve’s decision to cut interest rates by 0.25 percentage points at the start of this month.

Here is how they responded:

• It was the right move: 53.2%
• They should have left rates unchanged: 36.2%
• They should have cut rates by a larger amount: 5.3%
• They should have cut rates by a smaller amount: 0.8%
• Not sure/no opinion: 4.5%

See more Sentiment Survey results.