AAII Sentiment Survey: Neutral Sentiment Above Average for Ninth Consecutive Week

Neutral sentiment extended its streak of above-average readings to nine consecutive weeks despite falling in the latest AAII Sentiment Survey. Bearish sentiment rose to an unusually high level, while bullish sentiment remained at an unusually low level. In addition, members cited monetary policy and inflation as the factors most influencing their outlook for stocks in response to our special question.

Bullish sentiment, expectations that stock prices will rise over the next six months, increased 1.8 percentage points to 23.4%. Optimism is at an unusually low level for the second consecutive week. Bullish sentiment is also below its historical average of 37.5% for the 65th time out of the past 67 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, decreased by 8.0 percentage points to 31.8%. The current streak with nine consecutive readings above the historical average of 31.5% is the longest streak since a nine-week stretch between April and June 2021.

Bearish sentiment, expectations that stock prices will fall over the next six months, jumped 6.2 percentage points to 44.8%. Pessimism is at an unusually high level for the first time since January 5, 2023, and is at its highest level since December 29, 2022 (47.6%). Additionally, bearish sentiment is above its historical average of 31.0% for the 62nd time out of the past 67 weeks.

The bull-bear spread (bullish minus bearish sentiment) fell for the third consecutive week, decreasing by 4.5 percentage points to –21.4%. Bears have outnumbered bulls during 63 of the past 67 weeks.

Optimism about this year’s rebound has faded following the recent pullback in stock prices and the rise in interest rates.

This week’s special question asked AAII members which factor is most influencing their six-month outlook for stocks. Their responses are:

• Monetary policy/interest rates: 43.4%
• The economy and/or inflation: 35.3%
• Corporate earnings: 11.8%
• Stock market volatility: 4.1%
• Other: 5.4%

See more Sentiment Survey results.