IVV - AAII Sentiment Survey: Optimism Rises To Highest Level In Over Two And A Half Years

2023-12-21 14:21:29 ET

Summary

• Bullish sentiment increased 1.6 percentage points to 52.9%.
• Neutral sentiment decreased 3.2 percentage points to 26.2%.
• Bearish sentiment increased 1.6 percentage points to 20.9%.

Optimism among individual investors about the short-term outlook for stocks rose to its highest level in over two and a half years in the latest AAII Sentiment Survey. Meanwhile, pessimism increased slightly but is still at an unusually low level.

Bullish sentiment, expectations that stock prices will rise over the next six months, increased 1.6 percentage points to 52.9%. Optimism is unusually high for the second week in a row and is at its highest level since April 15, 2021 (53.8%). Bullish sentiment is above its historical average of 37.5% for the seventh consecutive week and the eighth time in 11 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, decreased 3.2 percentage points to 26.2%. Neutral sentiment is below its historical average of 31.5% for the third consecutive week and the 11th time in 12 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, increased 1.6 percentage points to 20.9%. Pessimism is unusually low for the third time in four weeks. Bearish sentiment is below its historical average of 31.0% for the seventh consecutive week and the seventh time in 14 weeks.

The bull-bear spread (bullish minus bearish sentiment) remained unchanged at 32.0%. The bull-bear spread is above its historical average of 6.5% for the seventh consecutive week and the eighth time in 16 weeks.

This week’s special question asked AAII members what they think about the Federal Reserve’s decision to keep interest rates unchanged.

Here is how they responded:

• It was the right decision: 73.1%
• They should have raised rates: 10.1%
• They should have cut rates: 3.6%
• Not sure/no opinion: 12.3%

This week’s Sentiment Survey results:

• Bullish: 52.9%, up 1.6 percentage points
• Neutral: 26.2%, down 3.2 percentage points
• Bearish: 20.9%, up 1.6 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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