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August 26, 2014 at 11:42 AM
Confidence in the economy and labor market among global investors and consumers generally has increased over the past month, according to three different investor or consumer confidence indexes, with marginal changes seen among North American and affluent investors.
The State Street Investor Confidence Index for August is up 7.2 points globally versus July, but domestic investors’ confidence decreased minimally. The global index rose to 122.8 in August from July’s revised reading of 115.6, State Street Global Exchange announced Tuesday.
While the risk sentiment in North America fell one point to 110.3, State Street attributes the global improvement in sentiment to an increase in the Asian ICI from 92.1 to 101.7 and a six-point increase in the European ICI to 127.7.
“Despite a bout of risk aversion driven by geopolitical tensions in the early days of August, global institutional investor confidence remains resilient,” said Jessica Donohue, senior managing director and head of research and advisory services for State Street Global Exchange, in a press release. “With benign developed market inflation, institutions may be positioning for continued accommodative policy from central banks.”
The State Street Investor Confidence Index, unlike survey-based measures, gauges investor confidence or risk appetite by analyzing the actual buying and selling patterns of institutional investors. State Street assigns a precise meaning to changes in investor risk appetite: the greater the percentage allocation to equities, the higher risk appetite or confidence.
Meanwhile, Spectrem Group, a market research and consulting firm specializing in the affluent and retirement markets, found its affluent investor confidence index unchanged in August and its millionaire investor confidence index up 1 point from July.
According to George H. Walper Jr., president of Spectrem Group, these results indicate continued caution and wariness among affluent investors.
“For the third consecutive month, there wasn’t a significant increase in affluent investors who said they intend to hold on the investment sidelines in the coming month rather than invest,” said Walper in a statement. “While the market continued flirting with unprecedented highs in August, crises overseas have tempered investor optimism. Affluent investors are telling us that developments in Ukraine, Israel and Iraq are at present the news stories having the most impact on their economic outlook.”
The August Spectrem Affluent Household Outlook, another measure of affluent investor confidence, edged downward for the third consecutive month, particularly among millionaires, who generally have a more optimistic outlook.
The Spectrem Affluent Investor Confidence Index is based on 250 monthly online interviews with the financial decision-makers in households with $500,000 or more in investable assets, and the Spectrem Millionaire Investor Confidence Index is based on a subset of the overall survey group.
