State Street Investor Confidence Index June & July 2021

June 2021 Investor Confidence Scores - fall

Investor confidence decreased to 96.3, a drop of 2.1 points in June from May 2021’s 98.4, according to the State Street Global Markets Global Investor Confidence Index. Investor confidence declined across all regions, with Asian investor confidence suffering the most, falling 9.0 points to 91.7. North American investor confidence sat at 95.3, a drop of 3.4 points, while European confidence dropped 2.0 points to 9.10.

Commentary from State Street for June’s results included:

“Risk appetite dipped slightly in June as was evident by our Global ICI that ticked down a couple of points from its modified May reading,” commented Rajeev Bhargava, head of Investor Behavior Research, State Street Associates.

“The move was partially driven by weaker sentiment from US investors, likely in response to heightened expectations of policy normalization given the Feds update to their dot plot guidance this month. In addition, increased tightening fears out of China combined with greater uncertainly around the impact of the delta variant may have steered confidence sharply lower amongst Asia investors, with Asian ICI fully retracing its gains from the prior month.”

July 2021 Investor Confidence Scores - rise

Investor confidence was up in July, jumping 4.0 points to 100.6 from June’s score. Global Investor Confidence Index increased from June’s revised reading of 96.6. The rise was driven mostly by a 9.3 jump in North America’s confidence to 105.1. Europe’s confidence increased 1.8 points to 92.8, while Asian confidence declined further on June, falling 4.8 points to 87.0.

Commentary from State Street for July’s results includes:

“Risk appetite improved in July as the Global ICI ticked higher on confidence of continued reopening tailwinds,” commented Marvin Loh, senior macro strategist at State Street Global Markets.

“U.S. investor sentiment reversed all of last month’s weakness with longer-term inflation expectations stabilizing despite higher than expected current price readings.

“Interest rates also fell by their widest margins in over a year, which kept financial conditions supportive of risk assets. In contrast, however, Asian investor confidence retreated to its lowest levels in a year, likely due to the region’s vaccination levels lagging much of the developed markets and growth concerns starting to emerge in China.

“And, of course, we will need to keep an eye out moving into the fall if Delta variant concerns continue to grow.”