State Street Global Markets today released the results of the State Street Investor Confidence Index* (ICI) for September 2021. The Global Investor Confidence Index decreased to 105.9, a drop of 4.0 points from August’s revised reading of 109.9. The decrease in investor confidence was driven by European ICI, which fell 9.2 points to 95.6. North American ICI dropped a more modest 4.4 points to 106.1, while Asian ICI ticked down 0.8 points to 97.7.
“ Investor confidence was marginally weaker in September, although despite the drop the Global ICI remained near its highest level in 3-years,” commented Marvin Loh, senior macro strategist at State Street Global Markets. “However, all three regions contracted from strong results in the ICI reported in August, with Europe falling 9 points, while North American and Asia both declining by low single-digits.
Resurgent infections from the delta variant has resulted in lowered growth expectations globally, although the economic backdrop continues to look attractive for above trend growth in 2022. Additionally, numerous central banks, including the Fed, have indicated that they will slow asset purchases in the coming months, with some expected to wind down their QE operations by mid-2022, which may provide an ongoing headwind until the timeline for rate hikes becomes clearer.”
*The Investor Confidence Index was developed at State Street Associates, State Street Global Markets’s research and advisory services business, in partnership with FDO Partners. 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.
