Half of Investors Skeptical of Recent Rebound in Stock Prices

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This week’s Sentiment Survey special question asked AAII members to share their thoughts about the recent rebound in stock prices. Nearly half (47%) of all respondents are unsure about whether it is sustainable. Many think downside volatility could return, earnings have peaked or other negative factors could play a role. A few mention the ongoing trade war with China as a point of uncertainty. About 12% of respondents think politics are affecting the markets, with some bringing up the government shutdown. Slightly more than 21% describe the rebound as a bounce from last year’s decline or reflective of an oversold market. An additional 11% think the rally is sustainable.

Here is a sampling of the responses:

  • “Just a rebound from the sell-off at the end of December that was not justified given the financial health of companies.”
  • “An aberration. The economy is still punch drunk on low interest rates.”
  • “I think it will continue throughout most of 2019.”
  • “I don’t think it will go much further. We are at the tail end of the economic upswing and the boom in corporate profits is over.”
  • “Headline news is driving investors crazy. Trade with China is another big factor.”

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