The AAII survey on individual investor sentiment released this morning saw a more positive turn after last week’s extremely bearish reading. The post-Thanksgiving gains experienced so far this week helped to boost sentiment to 33.88% from last week’s low 25.25%. This is slightly lower than what we have seen most of the year, but much more in line with recent months.
Last week saw the highest reading for bearish sentiment since February 2016. Bearish sentiment for this week fell to 39.5% from 47.1%. While this is certainly a large drop, it is still at an elevated level that hasn’t been seen since the spring.
Neutral sentiment saw a small decline from 27.61% to 26.64% with this loss most likely going towards the bullish camp.
Important to note about this week’s survey is that the impact of Fed Chair Powell’s remarks are likely to not be seen due to timing. With the speech occurring mid-day yesterday, most respondents had already reported. If yesterday’s price action in response to the speech is any indication, we should expect to see some fairly large changes benefiting bullish sentiment in next week’s survey. Also between now and then will be the G20, and more importantly, the meeting between President Trump and Chinese President Xi Jinping. This is yet another would-be catalyst that investors are watching as a tell on where trade policy will go. Some type of agreement between the two presidents could supplement the probable increase in bullish sentiment next week.