Equity bulls show highest sentiment in 30 months, says AAII

Equity bulls show highest sentiment in 30 months, says AAII
Meanwhile, pessimism is unusually low according to investor poll.
DEC 22, 2023

A barometer of investor sentiment has revealed some unusually high levels of optimism and unusually low levels of pessimism for the U.S. stock market in the next six months.

The weekly AAII Sentiment Survey released Thursday reveals that bullishness was up 1.6 percentage points to a reading of 52.9%, its highest in two and a half years, while bearishness was up by the same margin at 20.9%.

Along with those investors who are neutral on the six-month outlook for equities (26.2%) these percentages are some way from historic averages (bullish 37.5%, neutral 31.5%, bearish 31%), continuing trends of seven consecutive weeks for bullishness and bearishness, and three weeks for neutral sentiment.

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.

INTEREST RATES

The survey also asked investors if they believe the Fed made the correct decision in leaving interest rates unchanged this month, with the following responses:

  • 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%

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