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INDIVIDUAL INVESTOR BEARS BOUNCE BACK - AAII

Individual investors are feeling more pessimistic over the short-term outlook for U.S. stocks in the latest American Association of Individual Investors (AAII) Sentiment Survey. With this, both optimism and neutral sentiment declined.

Meanwhile, when it comes to analyst expectations for earnings growth this year, most investors see them as either being "too optimistic" or "about right."

AAII reported that bearish sentiment, or expectations that stock prices will fall over the next six months, increased 4.6 percentage points to 34.0%. Pessimism is above its historical average of 31.0% for the ninth time in 11 weeks.

Bullish sentiment, or expectations that stock prices will rise over the next six months, dipped 2.5 percentage points to 41.0%. Optimism is above its historical average of 37.5% for the second time in five weeks.

Neutral sentiment, or expectations that stock prices will stay essentially unchanged over the next six months, declined 2.1 percentage points to 25.0%. Neutral sentiment is below its historical average of 31.5% for the 28th time in 30 weeks.

With these changes, the bull-bear spread fell 7.1 percentage points to 6.9% from 14.0% last week. The bull-bear spread is above its historical average of 6.5% for the second time in six weeks.

In this week's special question AAII asked its members how realistic analyst expectations for earnings growth are this year.

Here is AAII's graphic showing how they responded:

(Terence Gabriel)

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