State Street’s Global Investor Confidence Index (ICI) has continued creeping up every month this year--from a low of 76.0 in December 2022 to 96.2 in July 2023. This is up 0.8 points from the June reading.

“Investor confidence continued to recover towards neutral, as the Global ICI improved to its highest level since last fall,” commented Marvin Loh, senior global macro strategist at State Street Global Markets, in a  published on 26 July. “However, overall investor tone remained defensive, with all our global and regional indicators registering a sub-100 reading.”

“North America saw the greatest improvement with respect to investor sentiment, rising to its highest level in nine months as recessionary risk faded while inflation surprised to the downside,” said Loh. “In contrast, the Europe ICI fell back below 100, with deteriorating data spreading across the region’s largest economies.”

The European investor confidence index was at 104.9 in June--above the neutral 100 reading, and considered to be risk-seeking territory--but dropped 5.4 points to 99.5 in July. It did, however, remain the highest reading amongst State Street’s regional indices.

North American investor confidence increased a bit, rising 1.3 points to reach 90.8 in July.

“Finally, the Asia ICI was largely unchanged as weak Chinese data prompted the government to engage in more aggressive stimulus efforts,” said Loh. The APAC index was at 97.3, up slightly from the 96.6 reading in June.

State Street’s investor confidence index measures investor confidence, or risk appetite, by looking at the buying and selling patterns of institutional investors. A higher percentage allocation to equities means a higher risk appetite, or confidence. A reading of 100 is neutral.

As of 30 June 2023, State Street has $39.6trn in assets under custody and/or administration and $3.8trn in assets under management. The company is active in more than 100 geographic markets and employs approximately 43,000 people, including roughly 1,000 in Luxembourg.