Investor confidence up in July

Investor confidence continued to recover towards neutral as evidenced by the Global Investor Confidence Index (ICI) which was up 0.8 points in July to 96.2, driven by a growth in confidence among North American investors.

While European ICI dropped 5.4 points in to 99.5, its North American counterpart grew by 1.3 points to 90.08 together with Asian ICI which saw a 0.7 point rise in July.

Marvin Loh, senior global macro strategist at State Street Global Markets, said that although investor confidence continued to recover towards neutral, as the Global ICI improved to its highest level since last fall, overall investor tone remained defensive, with all our global and regional indicators registering a sub-100 reading.

The index assigns a precise meaning to changes in investor risk appetite, with a reading of 100 being neutral and meaning the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets.

“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. In contrast, the Europe ICI fell back below 100, with deteriorating data spreading across the region’s largest economies,” Loh said.

“Finally, the Asia ICI was largely unchanged as weak Chinese data prompted the government to engage in more aggressive stimulus efforts.”