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Investing.com -- Investor optimism rose in the latest AAII Sentiment Survey, while both neutral and bearish sentiment declined.
"Bullish sentiment, expectations that stock prices will rise over the next six months, increased 2.5 percentage points to 21.6%," AAII reported.
However, despite the uptick, bullish sentiment remains "unusually low" and continues to sit below its historical average of 37.5% for the 10th time in 12 weeks.
At the same time, the firm said neutral sentiment fell. "Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, decreased 1.4 percentage points to 20.3%," marking its 35th time below the historical average of 31.5% in 37 weeks.
Bearish sentiment also edged lower but remains at extreme levels. "Bearish sentiment, expectations that stock prices will fall over the next six months, decreased 1.1 percentage points to 58.1%," AAII noted.
This marks the 16th time in 18 weeks that bearish sentiment has remained above its historical average of 31.0%.
Notably, "this is the first time in the history of the survey that bearish sentiment has exceeded 57% for four consecutive weeks."
The bull-bear spread, which measures the difference between bullish and bearish sentiment, "increased 3.6 percentage points to –36.5%" but remains well below its historical average of 6.5%.
AAII also asked members about their recession expectations. "A higher-than-typical chance" was the most common response, selected by 50.4% of respondents, while 21.7% said a recession was "highly likely." Only 9.7% considered a recession "unlikely."