Jump to content

AAII sentiment survey give hope for the optimists and the contrarians alike


Recommended Posts

Check out the text of the latest AAII sentiment survey, I follow this to get contrarian indicators and this one matches the concept put forward elsewhere that investors are buying into the all time highs as a signal for more to come and the fact that there are no alternatives, a recipe for disaster in my view.  The fact that the bullishness is muted and so many are on the fence should also give pause for thought to Bulls but Bears should be waiting in the tall grass...

 

AAII survey article:

 

AAII Sentiment Survey: Optimism jumped, staying above 30% on consecutive weeks for just the second time since last November.

Optimism among individual investors about the short-term direction of stock prices is at a level not seen in over four months, according to the latest AAII Sentiment Survey. Meanwhile, neutral sentiment and bearish sentiment both declined.

Bullish sentiment, expectations that stock prices will rise over the next six months, jumped 5.8 percentage points to 36.9%. Optimism was last higher on March 9, 2016 (37.4%). Even with this week's increase, bullish sentiment remains below its historical average of 38.5% for the 36th consecutive week and the 69th out of the past 71 weeks.

 

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, pulled back by 3.6 percentage points to 38.7%. Neutral sentiment is above its historical average of 31.0% for the 24th consecutive week.

Bearish sentiment, expectations that stock prices will fall over the next six months, declined 2.2 percentage points to 24.4%. Pessimism was last lower on since April 20, 2016 (23.9%). The historical average is 30.5%.

Since registering 22.0% on June 22, 2016, optimism has rebounded by 14.9 percentage points. Though it’s a big move, some context is needed. First, as noted above, bullish sentiment remains below average. Secondly, this is just the second time since last November that optimism has exceeded 30% on consecutive weeks. Bullish sentiment was above 30% during the three-week span of February 24 through March 9, 2016.

 

The rebound in stock prices and the new record highs set by the S&P 500 have had a positive impact on some individual investors. Others are encouraged by the sustained economic growth. A view that there is there is no good alternative to stocks is contributing to the optimism. Giving reason for caution or pessimism is global economic uncertainty (including Brexit), the prevailing level of valuations and disappointment with corporate earnings growth. The presidential election and monetary policy are also impacting individual investor sentiment.

 

This week's special question asked AAII members how the recently set new record low for Treasury yields is affecting their short-term outlook for stocks. Nearly four out of 10 respondents (37%) said that the new lows are not altering their outlook for stocks. Reasons were mixed, though several cited a lack of good alternatives to stocks or their adherence to a long-term allocation strategy. Nearly 33% of respondents are either more optimistic or said that the low bond yields make stocks attractive. Several of these respondents noted the comparatively higher yields that dividend-paying stocks are trading with. About 15% say that the low bond yields are making them more cautious or pessimistic. These respondents fret about valuations, investors being pushed to take on more risk and what might happen if bond yields begin to rise significantly.

Link to comment

Archived

This topic is now archived and is closed to further replies.

  • General Statistics

    • Total Topics
      20,150
    • Total Posts
      88,278
    • Total Members
      69,132
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    ycommad
    Joined 07/10/22 09:46
  • Posts

    • The Halifax House Price Index fell 0.1% month-on-month in September. August prices rose to a record high, up 0.4% month-on-month, but July was the first month to see a negative swing. As IGTV’s Jeremy Naylor explains it’s all about rising mortgage rates and a loss of affordability at current price levels.            
    • While Q3 earnings beat expectations, revenue missed forecasts and the company issued a warning for the full-year.      Jeremy Naylor | Writer, London | Publication date: Friday 07 October 2022  Earnings Despite third quarter (Q3) earnings at Levi Strauss beating expectations, revenue missed forecasts and the company issued a warning for the full-year (FY). The stock will fall 5% at the open today after having fallen 4% during yesterday’s trade. Video Transcript Levi shares fall Levi Strauss shares fell 5% in extended trade last night after the group cut its full-year profit forecasts. This is on top of the 4% drop during normal hours. Levi Strauss posted earnings of $0.40 a share for the third quarter, $0.03 higher than consensus. Revenue missed expectations, though, as the denim maker has to deal with softening demand. The strengthening dollar and persisting supply chain issues, with inflation at decade highs across the globe and a looming recession, consumers are moving away from these higher priced products and clothes generally to essentials such as food and energy. The strengthening dollar is also affecting Levi Strauss' margins, down 60 basis points compared with this time last year at 56.9%. The company now expects full-year 2022 adjusted profit of between $1.44 and $1.49 per share compared to prior forecasts of $1.50 to $1.56. Now you can see during the session yesterday we saw this 4.0% drop. Add to that a 5% drop when we see shares opened today and you're in this area down here challenging the 1500 level. So, we're watching that stock at the start of the day's trade after the outlook disappointed investors.
    • More Federal Reserve (Fed) members have come out nailing their hawkish colours to the mast, indicating that only when inflation is showing firm evidence of stabilising will the Fed start to rein back their aggressive attitude to rate rises. IGTV’s Jeremy Naylor looks at the US dollar.        
×
×
  • Create New...