AAII Sentiment Survey: Bearish Sentiment Falls

Optimism among individual investors about the short-term direction of the stock market rose according to the latest AAII Sentiment Survey. Neutral sentiment also rose, while pessimism fell.

Bullish sentiment, expectations that stock prices will rise over the next six months, rose 1.5 percentage points to 29.9%. This is the highest level of optimism registered by the survey since November 17, 2022 (33.5%). Nonetheless, bullish sentiment remains below its historical average of 37.5% for the 57th consecutive week.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, rose 0.6 percentage points to 35.5%. Neutral sentiment is above its historical average of 31.5% for the fifth consecutive week. At five weeks, this is the longest streak of above-average neutral sentiment since a five-week stretch in March and April 2022.

Bearish sentiment, expectations that stock prices will fall over the next six months, fell 2.1 percentage points to 34.6%. This is the first time since January 2022 that pessimism is below 40% for four consecutive weeks. Bearish sentiment is above its historical average of 31.0% for the 60th time out of the past 63 weeks.

The bull-bear spread (bullish minus bearish sentiment) is –4.7%. This is still below the historical average of 6.6%.

Concerns about the economy, inflation, corporate earnings and volatility in the stock market continue to cause many individual investors to maintain a cautious short-term outlook.

See more Sentiment Survey results.