Bullishness on U.S. Stocks Jumps From 17-Month Low
Bullishness on U.S. Stocks Jumps From 17-Month Low
Andrew Harrer/Bloomberg
The Wall Street bull sculpture sits on display between Broadway and Exchange Place in the Financial District of New York.
The Wall Street bull sculpture sits on display between Broadway and Exchange Place in the Financial District of New York. Photographer: Andrew Harrer/Bloomberg
Sept. 3 (Bloomberg) -- Michael Holland, chairman of Holland & Co. LLC and Tres Knippa of Lotusbrokerage.com, talk about the U.S. stock market and crude oil prices. Holland, Knippa and Bloomberg contributing editor William Cohan talk with Carol Massar, Dominic Chu and Julie Hyman on Bloomberg Television's "Street Smart." (Source: Bloomberg)
Optimism about U.S. stocks increased by the most since July as economic reports emboldened investors following three straight weekly losses in the Standard & Poor’s 500 Index, according to a survey from the American Association of Individual Investors.
The proportion of investors who anticipate a gain in the next six months jumped to 30.8 percent in the week ended Sept. 1, the biggest rise since the period that ended July 15. That compares with the 17-month low of 20.7 percent the previous week and the historical average of 39 percent, according to the Chicago-based company, which has tracked individual investors’ projections since 1987.
“The improvement in bullish sentiment comes on the heels of a strong stock market advance during the first trading day of September,” Charles Rotblut, AAII vice president, wrote in a report yesterday. “A fall in the percentage of bearish and neutral investors accounted for the 10.1 percentage point increase in bullish sentiment.”
U.S. stocks rallied the most in almost two months on Sept. 1 as better-than-estimated growth in American and Chinese manufacturing bolstered confidence in the global economic recovery. The S&P 500 plunged as much as 16 percent from a 19- month high on April 23 as widening budget deficits in Europe and a U.S. unemployment rate of more than 9 percent raised concern the global economic recovery is in jeopardy.
Bearish Sentiment
Bearish sentiment, or expectations that stock prices will fall over the next six months, fell 7.3 percentage points to 42.2 percent, according to AAII.
Bullishness on U.S. stocks last week fell to the lowest level since March 2009, when the S&P 500 began an 80 percent rally. Investors had lost faith in equities as the U.S. government said the economy grew less than previously forecast, home sales plunged by the most in a decade and jobless claims rose to the highest since November.
U.S. stocks rose today as better-than-estimated growth in private payrolls in August overshadowed the weakest expansion in the service industry in seven months. The S&P 500 gained 0.9 percent to 1,100.10 at 12:44 p.m. in New York, extending its weekly gain to 3.4 percent.
“Sentiment was so bad,” said Richard Campagna, chairman of 300 North Capital LLC, which manages $600 million in Pasadena, California. “The level of bearishness and fear in the market a week ago was so high that anything that makes it appear that the economy’s not getting worse is a wild positive.”
To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net
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