AAII Sentiment Survey: Pessimism Hesitates

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

Bullish sentiment, expectations that stock prices will rise over the next six months, increased 0.1 percentage points to 41.7%. Bullish sentiment is above its historical average of 37.5% for the second time in eight weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, increased 3.1 percentage points to 19.1%. Neutral sentiment is unusually low and is below its historical average of 31.5% for the 62nd time in 64 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, decreased 3.2 percentage points to 39.2%. Bearish sentiment is above its historical average of 31.0% for the 43rd time in 45 weeks.

The bull-bear spread (bullish minus bearish sentiment) increased 3.2 percentage points to 2.5%. The bull-bear spread is below its historical average of 6.5% for the 32nd time in 34 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.

Here is how they responded:

• It was the right move: 49.8%
• They should have cut rates by more percentage points: 27.0%
• They should have left it unchanged: 17.5%
• They should have raised rates: 2.1%
• Not sure/no opinion: 3.2%

See more Sentiment Survey results.