Global Investor Confidence Declines in December by 1.5 points to 94.8

Tuesday, December 26, 2017 10:26 am EST

Dateline:

BOSTON
"While the broader economic outlook appears increasingly rosy, as captured by measures of consumer and business confidence, the more cautious nature of investors hints at a concern that financial markets may have already discounted much of the good news."

State Street Global Exchange today released the results of the State Street Investor Confidence Index® (ICI) for December 2017.

The Global Investor Confidence Index decreased to 94.8, down 1.5 points from November’s revised reading of 96.3. The fall in sentiment was driven by a 6.2 point drop in the North American ICI to 94.9 and a 2.8 point fall in the Asian ICI to 94.8. However, the European ICI rose 16 points to 96.9.

The Investor Confidence Index was developed by Kenneth Froot and Paul O’Connell at State Street Associates, State Street Global Exchange’s research and advisory services business. It measures investor confidence or risk appetite quantitatively by analyzing the actual buying and selling patterns of institutional investors. The index assigns a precise meaning to changes in investor risk appetite: the greater the percentage allocation to equities, the higher risk appetite or confidence. A reading of 100 is neutral; it is the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets. The index differs from survey-based measures in that it is based on the actual trades, as opposed to opinions, of institutional investors.

“After peaking in July this year, investor confidence has now fallen for five consecutive months; the last three of which have seen investors reduce their holdings of risky assets (an index reading below 100),” said Michael Metcalfe, senior managing director and head of Global Macro Strategy, State Street Global Markets  “While the broader economic outlook appears increasingly rosy, as captured by measures of consumer and business confidence, the more cautious nature of investors hints at a concern that financial markets may have already discounted much of the good news.”.

“In Europe, healthy growth and continued ECB asset purchases may have helped to boost investor confidence,” said Froot. “Although the index remains below 100, it seems that European-based investors are becoming less concerned that political risks could derail the strong economic performance across the region.”

About the State Street Investor Confidence Index®

The index is released globally at 10 a.m. Eastern time in Boston on the last Tuesday of each month. More information on the State Street Investor Confidence Index is available at http://www.statestreet.com/ideas/investor-confidence-index.html.

About State Street

State Street Corporation (NYSE: STT) is one of the world's leading providers of financial services to institutional investors, including investment servicing, investment management and investment research and trading. With $32.1 trillion in assets under custody and administration and $2.67 trillion* in assets under management as of September 30, 2017, State Street operates in more than 100 geographic markets worldwide, including the US, Canada, Europe, the Middle East and Asia. For more information, visit State Street’s website at www.statestreet.com.

*AUM reflects approx. $36 billion (as of September 30, 2017) with respect to which State Street Global Advisors Funds Distributors, LLC serves as marketing agent; State Street Global Advisors Funds Distributors, LLC and State Street Global Advisors are affiliated.

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The views expressed in this material are the views of State Street through the period ended December 26, 2017 and are subject to change based on market and other conditions.

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