AAII Sentiment Survey: Optimism Falls as Pessimism Rises
The results from the latest AAII Sentiment Survey show optimism about the short-term direction of the stock market falling to its lowest level for the month of August. At the same time, pessimism rose back to an unusually high level.
Sentiment
Bullish sentiment
- Expectations that stock prices will rise over the next six months, fell 5.6 percentage points to 27.7%.
- The pullback puts optimism right at the breakpoint between typical and unusually low readings.
- Bullish sentiment remains below its historical average of 38.0% for the 40th consecutive week.
Neutral sentiment
- Expectations that stock prices will stay essentially unchanged over the next six months, increased 0.4 percentage points to 29.9%.
- Neutral sentiment is below its historical average of 31.5% for the 16th time in 18 weeks.
Bearish sentiment
- Expectations that stock prices will fall over the next six months, rose 5.2 percentage points to 42.4%.
- It is above its historical average of 30.5% for the 39th time out of the past 40 weeks and is at an unusually high level for the 24th time out of the last 32 weeks.
- The breakpoint between typical and unusually high readings is currently 40.5%.
Opinion: Continued volatility in the major stock indexes along with inflation, corporate earnings and increased chatter about the possibility of a recession are all likely weighing on individual investors’ short-term expectations for the stock market.
The bull-bear spread (bullish minus bearish sentiment) is –14.7% and is unusually low for the 25th time in 31 weeks. The breakpoint between typical and unusually low readings is currently –10.9%.
Historically, the S&P 500 index has gone on to realize above-average and above-median returns during the six- and 12-month periods following unusually low readings for the bull-bear spread.
Continued volatility in the major stock indexes along with inflation, corporate earnings and increased chatter about the possibility of a recession are all likely weighing on individual investors’ short-term expectations for the stock market. Also influencing sentiment are monetary policy, the coronavirus pandemic, politics and the ongoing invasion of Ukraine by Russia.
Current AAII Sentiment Bull-Bear Spread:
About AAII Sentiment Survey
- Measures the percentage of individual investors who are bullish, bearish, and neutral on the stock market short term.
- Individuals are polled from the AAII Web site on a weekly basis.
Source: AAII
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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