AAII Sentiment Survey: 1,900th Reporting Week; Optimism Pulls Back

This is the 1,900th consecutive week that the AAII Sentiment Survey has been conducted! Our weekly survey started in late July 1987. To coincide with this milestone, we sent out a separate questionnaire asking AAII members for their year-end 2024 forecasts. First, though, we’ll share this week’s AAII Sentiment Survey results. Optimism and pessimism moved back into their respective typical ranges.

Bullish sentiment, expectations that stock prices will rise over the next six months, decreased 6.6 percentage points to 46.3%. Optimism is back in its typical range for the first time in three weeks. Bullish sentiment is above its historical average of 37.5% for the eighth consecutive week. (Optimism was 36.0% during the survey’s first week on July 24, 1987.)

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, increased 2.4 percentage points to 28.6%. Neutral sentiment is below its historical average of 31.5% for the fourth consecutive week and the 12th time in 13 weeks. (Neutral sentiment was 50.0% on July 24, 1987.)

Bearish sentiment, expectations that stock prices will fall over the next six months, increased 4.2 percentage points to 25.1%. Pessimism is back in its typical range for the first time in three weeks. Bearish sentiment is below its historical average of 31.0% for the eighth consecutive week. (Pessimism was 14.0% on July 24, 1987.)

The bull-bear spread (bullish minus bearish sentiment) decreased by 10.8 percentage points to 21.3%. The bull-bear spread is above its historical average of 6.5% for the eighth consecutive week. (The bull-bear spread was 22.0% on July 24, 1987.)

This week’s special question asked AAII members how their portfolios performed this year relative to their expectations at the start of the year.

Here is how they responded:

Much better than I expected: 19.6%
Better than I expected: 46.9%
Close to what I expected: 23.0%
Worse than I expected: 8.8%
Much worse than I expected: 1.4%

In response to the special questionnaire we sent out, AAII members forecast modest gains in the S&P 500 Index. The average projected rise from the December 8, 2023, close we gave as a point of reference was 4.7%. The median rise was 6.9%.

Additionally, AAII members forecast the yield on the benchmark 10-year Treasury bond to pull back modestly from the December 8, 2023, yield of 4.26%. The average forecast yield was 3.91%, and the median was 3.80%.

This week’s Sentiment Survey results: