Investors haven't been this bearish on stocks since April 2013, one measures shows
- Bearish investor sentiment has risen over the past month, as shocking economic headlines due to the coronavirus pandemic continue to hammer investors week after week.
- On Thursday, it was reported that 3.2 million Americans filed for unemployment, bringing the seven-week total to 33 million.
- On Friday, it was reported that 20.5 million jobs were lost in April and the unemployment rate spiked to 14.7%.
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Investors haven't been this bearish on stocks since April of 2013, according to the latest American Association of Individual Investors investor sentiment poll.
Bearish sentiment jumped to 52.66% according to the weekly survey, a sizable spike from the prior bearish reading of 44.03%.
Bullish sentiment among investors declined to 23.67% from 30.6%.
This represents the lowest level of bullish sentiment in 30 weeks, and the highest level of bearish sentiment since April 2013.
The AAII sentiment survey asks a group of investors one simple question: Do you feel the direction of the stock market over the next six months will be up (bullish), no change (neutral), or down (bearish).
The survey is often used as a contrarian indicator. When investors are more bullish than average, contrarians point to the index as a reason to sell equities, and vice versa when investors are more bearish than average.
The historical bullish average of 38.0% and bearish average of 30.5% for the AAII survey would suggest to contrarians that now is a good time to buy stocks.
The rise in bearish sentiment comes as investors are hammered week after week with awful economic headlines due to the coronavirus pandemic. Weekly jobless claims were 3.2 million on Thursday, and totaled 33 million over the past seven weeks.
On Friday it was revealed that 20.5 million jobs were lost in April and the unemployment rate spiked to 14.7%.
Despite the constant barrage of negative headlines, the S&P 500 index is up more than 30% from its March 23 low.
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