AAII Sentiment Survey, 4 January 2017
$DIA, $SPY, $QQQ
The AAII Sentiment Survey measures the percentage of individual investors who are Bullish, Bearish, and Neutral on the stock market short term, individuals are polled from the AAII Website on a weekly basis.
Only 1 vote per member is accepted in each weekly voting period
This past week’s results:
HISTORICAL AVERAGE: 38.5%
Bullish: 46.2%, +0.6%
HISTORICAL AVERAGE: 31.0%
Neutral: 28.6%, -0.1%
HISTORICAL AVERAGE: 30.5%
Bearish: 25.2%, -0.5
- Bullish sentiment is starting 2017 at a six-week high.
- Neutral and Bearish sentiment both slightly declined.
More than a 33% of polled investors think the biggest impact to the market in Y 2017 will come from presidential and Congressional policies.
Optimism among individual investors is starting 2017 at a 6-week high, according to the latest AAII Sentiment Survey.
The rise in optimism comes as both Neutral and Bearish sentiment declined.
Expectations that stock prices will rise over the next 6 months, rose 0.6% to 46.2%. Optimism was last higher on 23 November 2016 (49.9%). The rise keeps Bullish sentiment above 40% for an 8th week running, and above its historical average of 38.5% for a 9th straight week.
Expectations that stock prices will stay essentially unchanged over the next 6 months, declined 0.1% to 28.6%. This is the 5th straight week and the 7th time in 8 weeks that Neutral sentiment is below its historical average of 31.0%.
Expectations that stock prices will fall over the next 6 months, declined 0.5% to 25.2%. This is a 5-week low, Pessimism was last lower on 30 November 2016 (25.1%). The decline also keeps Bearish sentiment below its historical average of 30.5% for the 8th time in 9 weeks.
All 3 sentiment measures are starting the new year within their typical historical ranges.
The Optimism shared by many, but not all, investors extends a shift in expectations that started the week of the November election.
The potential impact that President-elect Donald Trump could have on the economy is encouraging some individual investors and creating uncertainty or concern among others.
Also influencing investor sentiment are valuations, earnings, consumer sentiment and the magnitude and timing of future interest rates.
This week’s special question asked AAII members what they thought will most influence the direction of stock prices in Y 2017.
- 37% said the policies instituted by the Trump Administration and the legislation passed by the Republican-controlled Congress.
- 18% of respondents listed tax reform
- 5% listed deregulation and federal spending.
- 9% of respondents said earnings will influence stock prices
- 8% said monetary policy, and,
- 6% said consumer sentiment
Charles Rotblut, CFA
Paul Ebeling, Editor