Retail investors turn less bullish on stocks, AAII survey shows

Retail investors grew less optimistic over the short-term outlook for stock markets, an American Association of Individual Investors survey showed on Thursday, with neutral and pessimistic sentiments increasing. 

The AAII Sentiment Survey showed bullish sentiment- specifically that stock prices will rise in the next six months- among individual investors fell to 37.7% of respondents from 45.4% in the prior survey. 

Neutral sentiment- that stock prices will remain unchanged- rose slightly to 32.4%, while bearish sentiment- that stock prices will fall- rose by 4.5 percentage points to 29.9%. 

The spread of bulls to bears fell sharply to 7.8% in this survey, although it still remained above its historical average of 6.5%. 

The AAII is a non-profit organization consisting of about 150,000 members, whose aim is to aid individual, specifically retail investors, with investing in equity markets. Its sentiment survey is conducted weekly to measure retail sentiment towards equities. 

This week’s survey comes amid weakness in U.S. stock indexes, as anxiety over a tight presidential race largely dented risk appetite. Wall Street was also dented by growing bets that the Federal Reserve will cut interest rates at a slower pace in the coming months, owing to resilience in the U.S. economy. 

A batch of mixed third-quarter earnings also weighed on sentiment, with a string of mega-cap technology earnings set to drive markets next week. 

Source: Investing.com