Pessimism rebounded to a six-week high in the latest AAII Sentiment Survey, though it continues to remain below average. Both optimism and neutral sentiment declined.
Bullish sentiment, expectations that stock prices will rise over the next six months, pulled back by 3.6 percentage points to 33.2%. The drop keeps optimism below its historical average of 38.5% for the fifth time in seven weeks.
Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, fell 3.5 percentage points to 38.3%. Even with the decline, neutral sentiment remains above its historical average of 31.0% for a fifth consecutive week.
Bearish sentiment, expectations that stock prices will fall over the next six months, jumped 7.2 percentage points to 28.5%. This is a six-week high. Even still, pessimism remains below its historical average of 30.5% for the 14th time in 15 weeks.
At current levels, all three indicators are within their typical historical ranges. Most of the responses to this week’s survey were recorded before yesterday’s interest rate hike announcement.
Many individual investors are anticipating continued volatility and/or think the current political backdrop could have a further impact on the stock market. Trade policy is influencing some individual investors’ sentiment, but not all. Similarly, higher interest rates are having an influence on some, but not all. Also influencing sentiment are valuations, tax cuts, earnings and economic growth.
This week’s AAII Sentiment Survey results:
- Bullish: 33.2%, down 3.6 percentage points
- Neutral: 38.3%, down 3.5 percentage points
- Bearish: 28.5%, up 7.2 percentage points
- Bullish: 38.5%
- Neutral: 31.0%
- Bearish: 30.5%
Want to weigh in? Take the survey yourself and see results online at www.aaii.com/sentimentsurvey.
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