Stock Optimism Among Retail Investors Is at Its Highest Since 2021
Just before US stocks retreated on Thursday, retail traders' optimism soared to its highest level in 27 months when the market was hitting all-time highs.
A closely watched indicator has remained positive for the seventh consecutive week, reaching 29.9 in the week ending July 19, according to the American Association of Individual Investors survey. This marks the most bullish sentiment since April 2021, representing a significant jump from the 15.1 reading in the previous period.
The AAII survey indicates a decline in bearish sentiment, with only 21.5% of investors holding a negative outlook over the next six months, the lowest level since June 2021, and those with a neutral view reaching their lowest point this year.
Meanwhile, Data compiled by Vanda Securities reveals that the day trader crowd has been heavily investing in big tech and benchmark exchange-traded funds in recent weeks, injecting over $7.2 billion into the equity market during the last five sessions.
Retail investors remain engaged with the stock market as the earnings season enters its peak weeks. After some softening in net purchases ahead of the start of the earnings period, retail investors' participation has remained robust," said analysts at Vanda Research, "All told, retail's bid continues to be a sizeable tailwind for equities so far in July."
Souce: Bloomberg
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