Investor confidence down 0.9 points to 79.2 in December
State Street’s Global Investor Confidence Index decreased to 79.2 in October, down 0.9 points from September’s revised reading of 80.1.
The decrease in investor sentiment was driven by a 4.3 point drop in the North American ICI to 67.6 and a 1.5 point drop in the Asian ICI to 85.6. Meanwhile in contrast, the European ICI increased substantially for the second month in a row, rising from 107.4 to 132.9.
“Even with the stock market reaching new highs, US investor confidence declined further in October,” says Marvin Loh, senior macro strategist, State Street Global Markets. “Despite a more accommodative Fed, deepening geopolitical risks coupled with historically rich equity valuations in the US appear to be having a detrimental effect on investor sentiment right now.”
“European investor confidence rose sharply again in October as positive developments in Brexit negotiations and trade war talks sparked large-scale equity purchases in the region,” says State Street’s Kenneth Froot who developed the index in conjunction with Paul O’Connell. “These events have prompted institutions to reduce cash levels; purchasing both equities to capitalise on pro-risk developments, and bonds to capitalise on an increase in yields.”