AAII Sentiment Survey Results For Frame Ended 16 March 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; individuals are polled from the ranks of the AAII membership weekly. Just 1 vote per member is accepted in each weekly sentiment voting frame
Data represents what direction members feel the stock market will be in the next 6 months
Sentiment Survey says:
Bullish: 30%, down 7.4 pts
Neutral: 43.2%, up 4.9 pts
Bearish: 26.9%, up 2.5 pts
Historical averages:
Bullish: 39.0%
Neutral: 31.0%
Bearish: 30.0%
Commentary
The percentage of individual investors describing their short-term outlook for stock prices as Neutral rose to its highest mark of the year, according to the latest AAII Sentiment Survey.
Optimism dove, while Pessimism rose for the 1st time in 5 weeks.
Bullish sentiment
Expectations that stock prices will rise over the next 6 months, fell by 7.4 percentage points to 30.0%. The decline follows last week’s 5-month high. With this week’s decline, optimism is below its historical average of 39.0% for the 19th week running, and the 52nd out of the past 54 weeks.
Neutral sentiment
Expectations that stock prices will stay essentially unchanged over the next 6 months, rose 4.9 percentage points to 43.2%. This is the highest mark since 30 December 2015 (51.3%). The rise keeps Neutral sentiment above its historical average of 31.0% for a 7th straight week and the 59th time in the past 63 weeks.
Bearish sentiment
Expectations that stock prices will fall over the next 6 months, rebounded by 2.5 percentage points to 26.9%. The increase follows what had been a Y 2016 low. The historical average is 30.0%.
The pullback in Bullish sentiment comes after 4 straight weeks of increases. It also occurred during what was a flat 5 trading days for stocks.
It should be noted that most of this survey period’s responses were recorded before the FOMC’s statement was released Wednesday afternoon.
Though some individual investors are encouraged by the market’s rebound off of its February lows, sustained economic growth and still comparatively low energy prices, others fret about the pace of economic growth in the US, the pace of economic growth in China, tensions in the Middle East, the rate of earnings growth and prevailing valuations. Frustration with Washington politics also continues to be expressed.
This week’s special question asked AAII members what type of impact they perceive monetary policy to be having on the stock market.
More than 1 of 3 respondents (37%) said that the US Fed is having a negative impact.
12% of all respondents believe that continued low interest rates are artificially boosting stock prices and/or creating long-term harm, that rate hikes will hurt stock prices or that the central bank is creating uncertainty.
25% of all respondents do not believe that the Fed is having much or any impact on stocks, primarily because of the gradual pace at which rates are being raised.
8% of all respondents think the Fed is having a positive impact on the stock market.
By Charles Rotblut, CFA, AAII Journal
Paul Ebeling, Editor
HeffX-LTN
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