LIVE MARKETS-Investor sentiment shifts toward 'neutral'

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INVESTOR SENTIMENT SHIFTS TOWARD 'NEUTRAL'

Among individual investors, optimism has steadied while neutral sentiment stepped forward.

The weekly survey conducted by the American Association of Individual Investors (AAII) showed that bullish sentiment - or expectations that stock prices will increase over the next six months - eked out a nominal 0.1 percentage point increase to 41.7%, hovering above its historical average of 37.5% for the second time in eight weeks.

Bearish sentiment - the belief that stock prices will turn lower over the next six months - slid 3.2 ppts to 39.2%, still north of its 31.0% historical average for the 43rd time in 45 weeks.

But neutral sentiment, which reflects the notion that stock prices will stay put in the near-term, asserted itself, rising 3.1 pps to 19.1%, bouncing off the prior week's 16.0%, its lowest level in five months.

Taken together, the bull-bear spread (or, bullish minus bearish sentiment) increased 3.2 ppts to 2.5%, wallowing below its 6.5% historical average, where it's been in 32 of the last 34 weeks.

Survey participants seemed to be Team Fed.

This week, AAII asked survey participants what they think about the Federal Reserve's decision to cut its key interest rate by 25 bps last week.

A robust 49.8% believe it was the right move, while 27.0% think the central bank should have implemented a larger cut.

"They should have left it unchanged" garnered 17.5% of the votes, while 2.1% believe a rate hike would have been the right move.

(Stephen Culp)

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