DIA - AAII Sentiment Survey: Optimism Surges

2023-11-09 14:51:40 ET

Summary

• Bullish sentiment increased 18.3 percentage points to 42.6%.
• Neutral sentiment increased 4.8 percentage points to 30.2%.
• Bearish sentiment decreased 23.1 percentage points to 27.2%.

Optimism among individual investors about the short-term outlook for stocks soared in the latest AAII Sentiment Survey. Meanwhile, pessimism decreased.

Bullish sentiment, expectations that stock prices will rise over the next six months, increased 18.3 percentage points to 42.6%. Optimism is above its historical average of 37.5% for the third time in 10 weeks. This week’s increase was the largest since July 15, 2010 (an 18.4-percentage-point jump), and the 23rd largest week-over-week increase in bullish sentiment in the survey’s history.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, increased 4.8 percentage points to 30.2%. Neutral sentiment is below its historical average of 31.5% for the seventh time in 10 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, decreased 23.1 percentage points to 27.2%. Pessimism is below its historical average of 31.0% for the third time in 10 weeks.

The bull-bear spread (bullish minus bearish sentiment) increased 41.4 percentage points to 15.4%. The bull-bear spread is above its historical average of 6.4% for the second time in 10 weeks.

This week’s special question asked AAII members what they thought about the Federal Reserve’s decision to keep interest rates unchanged. Here are the responses:

• It was the right decision: 71.8%
• They should have raised rates: 14.6%
• They should have cut rates: 6.1%
• Not sure/No opinion: 6.8%

This week’s Sentiment Survey results:

• Bullish: 42.6%, up 18.3 percentage points
• Neutral: 30.2%, up 4.8 percentage points
• Bearish: 27.2%, down 23.1 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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