LIVE MARKETS-Individual investor bears have been on quite a run - AAII

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INDIVIDUAL INVESTOR BEARS HAVE BEEN ON QUITE A RUN - AAII

Individual investor pessimism over the short-term outlook for U.S. stocks declined, though it remains at an elevated level, in the latest American Association of Individual Investors (AAII) Sentiment Survey. With this, optimism and neutral sentiment both rose.

Meanwhile, around three-quarters of investors surveyed believe that Federal Reserve's decision to keep interest rates unchanged at its March meeting was "the right move."

AAII reported that bearish sentiment, or expectations that stock prices will fall over the next six months, lost 6.0 percentage points to 52.2%. Bearish sentiment is "unusually high" and is above its historical average of 31.0% for the 17th time in 19 weeks.

Of note, this the fifth week in a row bearish sentiment has been above 50%. Bearish sentiment last scored five straight weeks above 50% around the time the S&P 500 index .SPX ended its 2022 bear market in which it fell 25.4% on a closing basis.

The longest streak of consecutive bearish prints above 50% in the history of the survey was a seven-week run around the time the SPX ended its Gulf War decline of 19.9% on a closing basis in October 1990.

Bullish sentiment, or expectations that stock prices will rise over the next six months, gained 5.8 percentage points to 27.4%. Bullish sentiment is "unusually low" and is below its historical average of 37.5% for the 11th time in 13 weeks.

Neutral sentiment, or expectations that stock prices will stay essentially unchanged over the next six months, edged up 0.1 percentage points to 20.4%. Neutral sentiment is "unusually low" and is below its historical average of 31.5% for the 36th time in 38 weeks.

With these changes, the bull-bear spread gained 11.8 percentage points to –24.7% from –36.5% last week. The bull-bear spread is below its historical average of 6.5% for the 12th time in 14 weeks.

In this week's special question AAII asked its members if they think other investors are too bullish or bearish right now.

Here is AAII's graphic showing how they responded:

(Terence Gabriel)

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