LIVE MARKETS-Individual Investor bulls flee, bears make themselves known - AAII

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INDIVIDUAL INVESTOR BULLS FLEE AS BEARS MAKE THEMSELVES KNOWN - AAII

Optimism among individual investors over the short-term outlook for U.S. stocks plunged in the latest American Association of Individual Investors (AAII) Sentiment Survey. With this, both pessimism and neutral sentiment rose.

Meanwhile, the largest swath of investors surveyed believe 2025 will deliver just modest market gains of between 2% and 9%.

AAII reported that bullish sentiment, or expectations that stock prices will rise over the next six months, slid 9.2 percentage points to 25.4%. Optimism is "unusually low" and is below its historical average of 37.5% for the third time in seven weeks. Optimism was last lower on November 2, 2023 (24.3%).

Bearish sentiment, or expectations that stock prices will fall over the next six months, gained 3.2 percentage points to 40.6%. Pessimism is "unusually high" and is above its historical average of 31.0% for the eighth time in nine weeks. Pessimism was last higher on November 2, 2023 (50.3%)

Neutral sentiment, or expectations that stock prices will stay essentially unchanged over the next six months, advanced 6.0 percentage points to 34.0%. Neutral sentiment is above its historical average of 31.5% for the first time in 12 weeks.

With these changes, the bull-bear spread slid 12.4 percentage points to –15.1% from -2.7% last week. The bull-bear spread is below its historical average of 6.5% for the fifth time in eight weeks. This week's reading is the most negative it's been since November 2, 2023 (-25.97%). (Of note, the S&P 500 index .SPX ended a 10%+ correction on a closing basis on October 27, 2023.)

In this week's special question AAII asked its members what their performance expectations are for the S&P 500 index in 2025.

Here is AAII's graphic showing how they responded:

(Terence Gabriel)

FOR FRIDAY'S EARLIER LIVE MARKETS POSTS:

GRANOLAS OR MAG-7? GS SAYS ONE HAS MORE CRUNCH RIGHT NOW - CLICK HERE

MORE OF THE SAME FOR FRANCE THIS YEAR, SAY BOFA - CLICK HERE

SHARES RISING, FTSE 100 AT RECORD - CLICK HERE

EUROPE BEFORE THE BELL: BAD NEWS IS GOOD NEWS FOR THE FTSE - CLICK HERE

MORNING BID: CAUTIOUS END TO WEEK AS TRUMP INAUGURATION LOOMS - CLICK HERE

(Terence Gabriel is a Reuters market analyst. The views expressed are his own)