State Street Global Markets, the investment research and trading arm of State Street Corp., reported that investor confidence increased to 86.9 in November, up from 78.6 in October, according to its Investor Confidence Index.
The confidence of North American institutional investors rose from a revised reading of 94.0 in October to 103.4 in November. European and Asian investors displayed slightly lower confidence, with the European Index falling from 70.6 to 69.9, and the Asian Index declining from 85.4 to 83.3.
The confidence index measures investor confidence on a quantitative basis, analyzing actual buying and selling patterns of institutional investors.
“We have seen that institutional investors have concurred with market prices and with consumers about higher confidence,” said Ken Froot, a Harvard professor, who partners with State Street on the index. “For our institutional investors, this translates to acquisitions of risky assets across their diversified portfolios.
Froot also predicted that some of the macroeconomic touch points in the U.S., such as inflation, appear to be under better control than previously thought, as the Fed targets inflation, as energy prices decline, and as the end to Fed rate increases draws near.
“European levels of confidence are very low and remain broadly unchanged this month, and Asian confidence, which has been more robust in the past, has fallen again,” said Paul O’Connell, a director at SSA. “It is helpful that the recent conservatism of US investors in taking risk is being reversed. We are still waiting for a meaningful upward change in confidence levels to take hold in the rest of the world.”