The AAII Sentiment Survey for the Frame Ended 4 May 2016
$DIA, $SPY, $QQQ, $VXX
The AAII Investor Sentiment Survey measures the percentage of individual investors who are Bullish, Bearish, and Neutral on the stock market for the next 6 months,
Individual members are polled from the ranks of the AAII membership weekly. Just 1 vote per member is accepted in each weekly voting frame.
Survey Results for frame Ended 4 May 2016
Data represents what direction members feel the stock market will be in the next 6 months.
This week’s AAII Sentiment Survey results:
AAII Investor Update
Bullish: 22.3%, – 5.0 pts
Neutral: 47.3%, + 3.3 pts
Bearish: 30.3%, + 1.7 pts
Optimism among individual investors about the short-term direction of stock prices is at a 3-month low according to the latest AAII Sentiment Survey.
Pessimism is at a 10-wk high, and neutral sentiment is higher as well.
Expectations that stock prices will rise over the next 6 months, fell 5.0 pts to 22.3%. Optimism was last lower on 11 February 2016 (19.2%). This is the 26th week running, and the 59th out of the past 61 weeks that Bullish sentiment has been below its historical average of 39.0%.
Expectations that stock prices will stay essentially unchanged over the next 6 months, rose 3.3 pts to 47.3%. The rise keeps Neutral sentiment above 40% for an 8th straight week. It also keeps Neutral sentiment above its historical average of 31.0% for a 14th week running and the 66th out of the past 70 weeks.
Expectations that stock prices will fall over the next 6 months, rose 1.7 pts to 30.3%. Pessimism was last higher on 25 February 2016 (31.4%). The increase puts Bearishness just above its historical average of 30.0%.
Ever since the S&P 500 index hit a 2016 high on 20 April , optimism has declined by a cumulative 11.1 pts. The low level of Bullish sentiment is a continuation of an ongoing trend. Fewer than 1 out of 3 survey respondents have described their short-term outlook for stocks as bBullish during 23 out of the past 26 weeks.
Giving individual investors cause for concern is the slow pace of US economic growth and uncertain global economic growth, terrorism and global unrest, lackluster corporate earnings and the prevailing level of valuations.
Some AAII members are encouraged by sustained domestic economic growth, expected corporate earnings growth and still-low energy prices.
This week’s special question asked AAII members how big of an impact news and data about China is having on their outlook for the US stock market.
64% said that China is having either no impact or just a small impact. Among the reasons given were a mistrust of the data about the Chinese economy, a sense that China’s economy does not directly affect the health of the US economy and a perception that sentiment about China only has a short-term impact on US stocks.
27% of respondents said China has a big impact, particularly on revenues and earnings for US corporations.
By Charles Rotblut, CFA
Paul Ebeling, Editor