Stocks are off to a strong start in 2025 as the S&P 500 hit a new high on Wednesday, but investor surveys show plenty of skepticism. That could mean there’s still plenty of momentum for a rebound. The latest weekly survey from the American Association of Individual Investors shows that only 25.4% of respondents expect the stock market to rise in the next six months. On the other hand, 40.6% expect the stock market to fall during this period, a negative gap of more than 15 percentage points. This compares to the survey’s historical average of 37.5% bullish and 31% bearish. “While U.S. stocks rose last week, the gap between AAII bullish sentiment and AAII bearish sentiment fell further into bearish territory,” Bank of America’s Stephen Suttmeier wrote in a note to clients. He noted that the gauge fell to -26 November 2023. It’s been a good year for stocks, but it came shortly after the stock sell-off in October. However, fears at that moment proved to be unfounded, and stocks rebounded at the end of the year and throughout 2024. RBC Capital Markets strategist Lori Calvasina said in a note that sentiment readings suggest the market has room to rise, but investor confidence may take more time to bottom out. “This data set tells us that the current downturn in stocks may not be over yet, as the four-week average has not yet recovered to one standard deviation below the long-term average, a level that helps mark the low for stocks. U.S. Stocks Fall 2023 ,” Calvasina said. She added: “But surveys in October 2024 show that the elimination of investor sentiment bubbles has undoubtedly improved stock market conditions over the next 6-12 months.”
Investors are growing fearful. Why this is good for stocks | Real Time Headlines
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