Investors increasingly expect U.S. stock-market rally to continue as bears finally surrender

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A roundup of recent surveys of individual and professional investors point to new optimism about the stock market.

Amateur and professional investors alike are finally warming to the idea that U.S. stocks can continue to climb higher during the months ahead.

Over the past few days, stock-market strategists have been discussing a handful of popular sentiment surveys all showing the same thing: that individual investors, market newsletter-writing gurus and professional money managers are growing increasingly optimistic about the market’s prospects. Finally, Investors Intelligence Advisors’ Sentiment Report also showed bullish sentiment among professional advisers has reached its highest level since U.S. stocks peaked in January 2022.

“During this bear market, extreme greed and elevated exposure has acted as the ‘canary in the coal mine’…this combination has preceded all meaningful declines,” said Twitter user Tom the Trader, who shared a chart showing near-term highs in bullish sentiment coinciding with key market turning points in 2022 and 2023.

And when the market started to soften again in February, both sentiment and reported positioning quickly slumped. Yardeni and Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, both said on Monday that improving earnings expectations appear to be instrumental in changing investors’ minds.

 

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