LIVE MARKETS-Bears charge, bulls retreat in AAII's latest sentiment survey

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BEARS CHARGE, BULLS RETREAT IN AAII'S LATEST SENTIMENT SURVEY

Individual investors have taken a pessimistic turn, according to the American Association of Individual Investors' (AAII) most recent sentiment survey.

The results show bearish sentiment—or expectations that stock prices will fall over the next six months—leapt 6.9 percentage points to 48.4%, coasting above its long-term historical average of 31.5% for the 39th consecutive week.

The bulls—who believe stock prices will rise in the next six months—retreated 3.7 percentage points to 34.1%, landing below their 37.5% historical average for the second time in three weeks.

The neutral camp—which sees no change in stock prices between now and May—shrank by 3.2 percentage points to 17.5%. AAII calls the reading "unusually low" and points out that neutral sentiment has now been south of its historic level of 31.0% for the 35th straight week.

Taken together, the bull-bear spread (bullish minus bearish) narrowed by 10.7 percentage points to -14.3%, lurking below its 6.5% long-term average for the 16th consecutive week.

AAII's special question to its members this week asked survey participants what they thought of the US Federal Reserve's decision to leave its key interest rate unchanged last week.

The majority (55.5%) said it was the right move, while 30.7% said the central bank should have hiked rates. The "they should have cut rates" camp accounted for 6.6% of the respondents. The remaining 7.3% were unsure or had no opinion on the matter.

(Stephen Culp)

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