Consumers Sour on Stocks

Apr 29, 2025

High-frequency sentiment surveys have consistently shown an overwhelming amount of bearish sentiment in recent weeks. For example, the AAII survey has registered more than 50% of responses as bearish for a record nine straight weeks per the latest release last Thursday.  That negative stock market outlook is also showing up in consumer, rather than investor-focused data. Today’s release of the Conference Board’s reading on Consumer Sentiment saw broadly weaker than expected readings across categories (this will be discussed more in tonight’s Closer). In November, readings showed peak positive sentiment when the percentage of respondents expecting higher stock prices in one year hit a record high of 57.2% versus only 21.7% expecting lower prices.  Fast forward to today, 48.5% of responses expect lower prices in the next year, versus 36.1% expecting higher prices. While the index for higher prices is middling relative to its historical range, the level for those expecting lower stock prices is in the 98th percentile at the highest level since October 2011.

Taking a net reading, consumers expect stock prices to fall in the next year. However, the current level was even more depressed as recently as the 2022 bear market. What is more unprecedented is how rapid the shift has been towards those negative feelings. As shown in the second chart below, the four-month change in that net reading is the most pronounced decline on record. The only two four-month declines that even come close were those ending in October 1990 and July 2002.