AAII Sentiment Survey, 2 February 2017
Neutral Sentiment Rises to Highest Level Since Early November 2016
$DIA, $SPY, $QQQ,
The AAII Sentiment Survey has been conducted weekly since July 1987 and asks AAII members whether they think stock prices will rise, remain essentially flat or fall over the next six months.
The survey period runs from Thursday (12:01a ET) to Wednesday (11:59p ET).
The current AAII Sentiment Survey results:
- Bullish: 32.8%, +1.2%
- Neutral: 33.0%, – 1.9%
- Bearish: 34.2%, – 0.7%
- Bullish: 38.5%
- Neutral: 31.0%
- Bearish: 30.5%
The percentage of individual investors describing their short-term market outlook as Neutral decreased from last week, while Pessimism has now been above 30% for 3 weeks running for the 1st time since the November Election, according to the latest AAII Sentiment Survey.
Optimism bounced back slightly after declining 3 weeks straight.
Expectations that stock prices will rise over the next 6 months, increased 1.2% to 32.8%. Optimism was last lower on 2 November 2016 (23.6%). The historical average is 38.5%.
Expectations that stock prices will stay essentially unchanged over the next 6 months, declined 1.9% to 33.0%. This is the 4th time Neutral sentiment has been above its historical average of 31.0% since the Election.
Expectations that stock prices will fall over the next 6 months, edged up 0.7% to 34.2%. Pessimism was last higher on 2 November 2016 (34.3%). This is the 1st time that Bearish sentiment is above its historical average of 30.5% for 3 weeks running since the Election.
Since starting Y 2017 at 46.2%, Bullish sentiment has pulled back by a cumulative 13.4%. Over the same frame, Neutral sentiment and Bearish sentiment have risen by 4.5 and 8.9%, respectively.
All 3 of the indicators remain still within their typical historical ranges.
Note: On 1 hand, tax cuts and fiscal stimulus could boost the US economy, but on the other, protectionist policies could effect foreign trade.
Also influencing investor sentiment are valuations, earnings, consumer sentiment and the magnitude and timing of future interest rate increases.
According to Thomson Reuters, roughly 44% of S&P 500 companies have reported Quarterly earnings, and of those that have reported, 66% have beaten earnings expectations while 48% have beaten revenue expectations.
Charles Rotblut, CFA
Paul Ebeling, Editor