VTI - AAII Sentiment Survey: Optimism On Stocks At A 16-Week Low

2023-09-21 14:43:25 ET

Summary

• Bullish sentiment fell 3.1 percentage points to 31.3%.
• Neutral sentiment pulled back by 2.3 percentage points to 34.1%.
• Bearish sentiment rose 5.4 percentage points to 34.6%.

The percentage of individual investors describing their short-term outlook on stocks as bullish is at a 16-week low. The latest AAII Sentiment Survey also shows bearish sentiment rebounding above its historical average.

Bullish sentiment, expectations that stock prices will rise over the next six months, fell 3.1 percentage points to 31.3%. Optimism was last lower on June 1, 2023 (29.1%). This week’s drop keeps bullish sentiment below its historical average of 37.5% for the fifth time in six weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, pulled back by 2.3 percentage points to 34.1%. Neutral sentiment is above its historical average of 31.5% for the fifth time in six weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, rose 5.4 percentage points to 34.6%. Pessimism is above its historical average of 31.0% for the third time in five weeks.

The bull-bear spread (bullish minus bearish sentiment) fell 8.5 percentage points to –3.3%. This is the fifth time in six weeks that the bull-bear spread is below its historical average of 6.5%.

This week’s special question asked AAII members how they would describe the current valuation of stocks. Here are the responses:

• Valuations are mixed, with some stocks expensive and others cheap: 44.4%
• Stocks, in general, are overvalued: 32.3%
• Stocks, in general, are fairly valued: 16.0%
• Stocks, in general, are undervalued: 3.9%
• Not sure/no opinion: 3.4%.

This week’s Sentiment Survey results:

• Bullish: 31.3%, down 3.1 percentage points
• Neutral: 34.1%, down 2.3 percentage points
• Bearish: 34.6%, up 5.4 percentage points.

Historical averages:

• Bullish: 37.5%
• Neutral: 31.5%
• Bearish: 31.0%.

The AAII Sentiment Survey has been conducted weekly since July 1987.

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