LIVE MARKETS-Pessimism eases, but AAII investors remain wary 

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

PESSIMISM EASES, BUT AAII INVESTORS REMAIN WARY

Individual investors remained cautious in the latest American Association of Individual Investors (AAII) Sentiment Survey, though the outlook improved modestly from a week ago as bearishness eased and both bullish and neutral views edged higher.

Bearish sentiment fell 4.4 percentage points to 41.4%, but remained unusually high. Bearish sentiment has exceeded its long-term average of 31.5% for 38 straight weeks, underscoring the cautious tone among individual investors. Elevated pessimism, however, is often viewed through a contrarian lens.

Neutral sentiment rose 3.4 percentage points to 20.7%, but remained unusually low and well below its historical average of 31.0% for a 34th consecutive week.

Bullish sentiment, or expectations that stock prices will rise over the next six months, increased 1 percentage point to 37.8%, moving slightly above its long-term average of 37.5% for the third time in four weeks.

The bull-bear spread, a measure of overall sentiment, improved to negative 3.6% from negative 8.9% last week. Even so, the spread has remained below its historical average of 6.5% for 15 consecutive weeks.

Even with the recent improvement, investors have yet to embrace a decisively bullish outlook.

In this week's special question, most respondents said they currently favor a mix of stock types. Small-cap stocks were the least popular choice, preferred by just 4% of respondents, reflecting little current enthusiasm for the group.

The graphic below shows responses to this week's special question.

(Terence Gabriel)

*****

EARLIER ON LIVE MARKETS:

EMPLOYMENT COST GROWTH COOLS IN Q3 CLICK HERE

AI SPENDING WORRIES SPUR DEFENSIVE ROTATION CLICK HERE

BENCHMARK TREASURY YIELD RETREAT PUTS KEY TREND SUPPORT IN FOCUS CLICK HERE

DOLLAR NO HAVEN IN A TECH SELLOFF CLICK HERE

GULF ESCALATION FEARS MEAN IT'S TIME TO EXIT LONGER-DATED BONDS CLICK HERE

EUROPE, CANADA TOP FIXED-INCOME PICKS — SCHRODERS CLICK HERE

EUROPE ON THE SIDELINES CLICK HERE

EUROPE BEFORE THE BELL: WHEN WALL STREET SNEEZES CLICK HERE

MORNING BID ONE LAST CENTRAL BANK SURPRISE CLICK HERE