Live Markets-Investor pessimism on stocks outlook has fallen: AAII

Pessimism among individual investors about the short-term outlook for stocks decreased while optimism and neutral sentiment increased, in the latest weekly AAII Sentiment Survey.

Bullish sentiment, or expectations that stock prices will rise over the next six months, increased 6.8 percentage points to 39.7% for its highest level since July 16 when it was at 44.9%. Bullish sentiment was above its historical average of 37.5% for the first time in seven weeks, according to the survey for the week ended September 2.

Neutral sentiment, or expectations that stock prices will stay essentially unchanged over the next six months, rose 0.1 percentage points to 22.7%. Neutral sentiment is unusually low and is below its historical average of 31.0% for the 26th consecutive week, AAII said.

Bearish sentiment, or expectations that stock prices will fall over the next six months, decreased 6.9 percentage points to 37.6%. Bearish sentiment is above its historical average of 31.5% for the 30th consecutive week.

The bull-bear spread (bullish minus bearish sentiment) increased 13.7 percentage points to 2.2% but was below its historical average of 6.5% for the seventh consecutive week.

This week’s AAII survey includes an additional question for its members on whether rising long-term Treasury yields have led them to alter their allocations. Here is how they responded:

• 26.3%: allocating more to cash or shorter-term bonds
• 6.0%: allocating more to stocks
• 3.0%: allocating more to longer-term bonds
• 4.5% said more than one of the above
• 59.4% said no, long-term Treasury yields did not lead them to alter allocations