Founded in 1978, the American Association of Individual Investors (AAII) is a Chicago-based company that provides research, education and insight for individual investors. Its weekly Sentiment Survey tracks the pulse of short-term optimism on the U.S. stock market in the individual investor community. The goal is to provide a forward-looking perspective by asking their thoughts on the stock market over the next six months.
Mark M. Grywacheski
In the latest survey, 43.2% of investors state they are “bullish” — a Wall Street term that denotes optimism. This means investors believe the stock market will continue to rise over the next six months. This is above the survey’s historical average of 37.5%.
Conversely, 27.2% of investors are “bearish” and believe the stock market will decline over the next six months, a near four-month high. This is up markedly from the 21.9% reported just last week. Meanwhile, 29.6% of respondents stated they were “neutral” — that the stock market would remain relatively unchanged over the next six months.
If you’ve always wondered about Wall Street’s fascination with bulls and bears and their frame of reference, here’s an easy hint. Bulls charge forward (a rising stock market) and bears lie down to hibernate (a declining stock market).
The latest Sentiment Survey indicates that, overall, investors are still optimistic on the short-term outlook of the U.S. stock market. However, the rising “bearish” outlook indicates a growing concern that stock prices over the past 16 months might have risen a bit too high, too fast.
The survey also reflects the rollercoaster-type ride investors have experienced over the past few years. In 2022, concerns over high inflation and rising interest rates sent the major stock market indexes into decline. That year, the tech-heavy NASDAQ fell the most, declining by 33.1%. The broad-based S&P 500 fell 19.4% while the Dow Jones Industrial Average (DJIA) fell 8.8%. By December 2022, the AAII reported investor bullish sentiment had cratered to just 20.3%. Bearish sentiment, however, soared to 52.3%.
But 2023 provided a much-needed boost to investors. Last year, the NASDAQ soared 43.4%, the S&P 500 gained 24.2% while the DJIA rose 13.7%. So far in 2024, all three stock market indexes have continued their upward rise and currently stand at all-time record highs.
Whether the ongoing rise in the stock market continues or not is unknown. That’s the realm of crystal balls. Based on the latest Sentiment Survey, many investors think it will. But that optimism is increasingly being tempered by a dose of caution. The economy is still facing high inflation and high interest rates. This is a potent combination that can potentially throw a wrench into the growth of the economy and the U.S. stock market.
Google has temporarily halted its new artificial intelligence model, Gemini, from generating images of people. This comes after it faced criticism for portraying historical figures such as politicians and German World War II soldiers as people of color. Google has acknowledged the need for adjustments to Gemini, which had been generating images with varying ethnicities and genders. “We’re working to improve these kinds of depictions immediately. Gemini’s AI image generation does generate a wide range of people. And that’s generally a good thing because people around the world use it. But it’s missing the mark here,” said Google in a statement. The move comes amid ongoing concerns about bias in AI, with previous examples showing negative impacts on people of color. As efforts to mitigate bias continue, experts emphasize the complexity of the issue and the need for ongoing improvement in AI technology.
Where companies have adopted AI—and where they are planning to do so in the near future
Where companies have adopted AI—and where they are planning to do so in the near future
On Nov. 30, 2022, OpenAI launched ChatGPT, a chatbot driven by artificial intelligence. The app spread like wildfire. Not only did it provide an entertaining companion to chat with, but it also showed promise as a piece of productivity software.
ChatGPT allows users to ask questions about myriad topics and get useful responses in a way that search engines like Google cannot provide. Similar technologies have emerged in all kinds of domains, including image generation, language translation, transcription, computer programming, and more.
Firms across the U.S. are embracing artificial intelligence. To find out which regions are the most enthusiastic about AI, Verbit analyzed data from surveys taken by the Census Bureau in December 2023. Overall, 4.9% of businesses said they were using AI to produce goods or services in the past two weeks, while 6.7% say they plan to within the next six months.
Unsurprisingly, information technology companies are the most eager to use artificial intelligence—22% of respondents from American tech companies said they had used AI for their products or services within the past two weeks. That number actually understates AI’s impact in the field. A survey of computer programmers conducted by JetBrains, a software company, found that 77% of respondents used ChatGPT, while 46% used GitHub Copilot, an AI coding assistant.
Professional, scientific, and technical services were the second-most likely type of firm to respond that they used AI tools, according to the Census Bureau. Law firms are using tools to scan through thousands of past cases. And, according to Tess Bennett, a technology reporter for Financial Review, consultants and accountants are using AI to create PowerPoint presentations and conduct exploratory data analysis.
Top adopters
Some businesses have been quicker to adopt AI than others. Companies in Rhode Island lead the way on this front—8.7% of businesses in the state are currently using AI, nearly twice the rate of companies in the United States as a whole.
Companies on the West Coast and the Southwest tended to be more AI-friendly, while companies in the Rust Belt were likelier to have the lowest interest in using AI tools.
This story matches the Census survey numbers with data on what kinds of companies each state has within its borders and the education level of its workforce to understand why these disparities across states exist.
In general, states with a higher share of businesses in the technology sector also were likely to have more businesses use AI to produce goods and services. However, the weak correlation suggests that despite all of the hype surrounding AI, companies have still been slow to change their practices to adopt the technology.
Getting on the bandwagon
Businesses in Washington D.C., were the most likely to say they planned to adopt AI in the next six months, at 13.7%. Meanwhile, about 9% of businesses in Maryland, Alaska, New Mexico, Rhode Island, and Florida said they planned on implementing AI. Alabama and Delaware were the least enthusiastic about AI adoption—only 3.3% of businesses in the two states reported plans to implement AI.
This analysis of Census data found a much stronger correlation between how many of a state’s firms are in the tech sector and their willingness to implement AI in their business practices in the near future.
Similar trends were found when it came to states with highly educated workforces—in general, the higher the share of a state’s residents with college degrees, the more likely its businesses were to say they were planning on implementing AI. Artificial intelligence might be the future. But Census data reveals it is still early days.
Story editing by Ashleigh Graf. Copy editing by Kristen Wegrzyn.
This story originally appeared on Verbit and was produced and distributed in partnership with Stacker Studio.
Mark Grywacheski is an expert in financial markets and economic analysis and is an investment adviser with Quad-Cities Investment Group, Davenport.
Disclaimer: Opinions expressed herein are subject to change without notice. Any prices or quotations contained herein are indicative only and do not constitute an offer to buy or sell any securities at any given price. Information has been obtained from sources considered reliable, but we do not guarantee that the material presented is accurate or that it provides a complete description of the securities, markets or developments mentioned. Quad-Cities Investment Group LLC is a registered investment adviser with the U.S. Securities Exchange Commission.
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