LIVE MARKETS-Individual investor bears stage a comeback - AAII

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INDIVIDUAL INVESTOR BEARS STAGE A COMEBACK - AAII

Pessimism among individual investors over the short-term outlook for U.S. stocks surged to a multi-month high in the latest American Association of Individual Investors (AAII) Sentiment Survey. With this, both optimism and neutral sentiment took a hit.

Meanwhile, around two-thirds of investors surveyed said that they thought that the Federal Reserve's decision to leave rates unchanged at its meeting last week was "the right move."

AAII reported that bearish sentiment, or expectations that stock prices will fall over the next six months, jumped 10.2 percentage points to 43.2% (last higher on May 15 at 44.1%). Bearish sentiment is "unusually high" and is above its historical average of 31.0% for the 36th time in 38 weeks.

Bullish sentiment, or expectations that stock prices will rise over the next six months, fell 5.5 percentage points to 34.9%. Bullish sentiment is below its historical average of 37.5% for the second time in six weeks.

Neutral sentiment, or expectations that stock prices will stay essentially unchanged over the next six months, declined 4.8 percentage points to 21.9%. Neutral sentiment is below its historical average of 31.5% for the 55th time in 57 weeks.

With these changes, the bull-bear spread collapsed 15.7 percentage points to -8.4% from +7.3% last week. The bull-bear spread is below its historical average of 6.5% for the 25th time in 27 weeks.

In this week's special question AAII asked its members what they thought about the Federal Reserve’s decision to keep interest rates unchanged in late July.

Here is AAII's graphic showing how they responded:

(Terence Gabriel)

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