State Street Global Exchange says investors worldwide are slightly more optimistic in December – but not those in the United States.
The group’s Investor Confidence Index for the last month of 2015 rose 1 point from November to 108.3, according to a report released Tuesday.
“The improvement in sentiment was driven by an increase in the European ICI from 96.2 to 103.7, along with the Asian ICI rising 4.6 points to 105.1. By contrast, the North American ICI decreased by 5.9 points to 106.6,” State Street said in a press release.
In November, the Global Investor Confidence Index declined by 7.2 points, moving down to 106.8 from 114 in October. In North America, it fell nearly 12 points to 112.9 from 124.8 in October.
“U.S. investors have been showing an appetite for risk for much of 2015, but have been increasingly risk averse into year-end as uncertainty about global growth, weak commodity prices and the beginning of the Fed tightening cycle have eroded confidence to take risk,” explained Ken Froot, a co-developer of the index, in a statement.
“The knee jerk reaction from European equity and bond markets was to sell off together when the European Central Bank eased but failed to increase its asset purchases program in early December,” said Michael Metcalfe, senior managing director and head of global-macro strategy for State Street Global Markets, in a press release. “It appears European long-term investors were more forgiving as their allocation to risky assets went up over the course of the month.”
State Street’s Investor Confidence Index was developed by Froot and Paul O’Connell to measure investors’ confidence or risk appetite quantitatively by analyzing the actual buying and selling patterns of institutional investors.