The Global Investor Confidence Index increased to 81.4, up 3.8 points from February’s revised reading of 77.6. The increase was led by an 11.0 point rise in European ICI to 117.5, along with a smaller 0.9 point increase in North American ICI to 73.9.

Asian ICI, meanwhile, fell 6.3 points to 91.9. The Investor Confidence Index was developed at State Street Associates, State Street Global Markets research and advisory services business. It measures investor confidence or risk appetite quantitatively by analysing the actual buying and selling patterns of institutional investors.

The index assigns a precise meaning to changes in investor risk appetite: the greater the percentage allocation to equities, the higher risk appetite or confidence. A reading of 100 is neutral; it is the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets.

The index differs from survey-based measures in that it is based on the actual trades, as opposed to opinions, of institutional investors.

“In the face of heightened stress in the US banking sector, institutional investors continued to take a defensive stance with the Global ICI posting at 81.4 in March, well under the risk neutral level of 100,” commented Rajeev Bhargava, head of Investor Behavior Research, State Street Associates.

“While the aggregate sentiment remained weak, it is important to report that investor confidence did not deteriorate further in March but actually firmed a touch, with our global measure gaining around 4 points.

Indeed, the North American ICI remained steady through March albeit at weak levels, possibly supported by talks that the FDIC will extend insurance to all deposits, and in Europe investor optimism climbed sharply higher. With Asia being the only region that witnessed a decline is sentiment, the behavior of institutions in March demonstrated some level of resilience to the recent bout of market volatility.”

The index is released globally at 10 a.m. Eastern time in Boston on the last Wednesday of each month.

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The Global Investor Confidence Index decreased to 104.3, down 4.6 points from September’s revised reading of 108.9. The decrease was led by a sharp 14.4 point drop in European ICI to 86.2 as well as a 5.1 point drop North American ICI to 104.0. Asian ICI, meanwhile, rose 4.1 points to 104.5.

The Investor Confidence Index was developed at State Street Associates, State Street Global Markets’ research and advisory services business, in partnership with FDO Partners. It measures investor confidence or risk appetite quantitatively by analysing the actual buying and selling patterns of institutional investors. The index assigns a precise meaning to changes in investor risk appetite: the greater the percentage allocation to equities, the higher risk appetite or confidence. A reading of 100 is neutral; it is the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets. The index differs from survey-based measures in that it is based on the actual trades, as opposed to opinions, of institutional investors.

“Risk appetite contracted in October for the first time in five months as the Global ICI fell 4.6 points to 104.3,” commented Rajeev Bhargava, head of Investor Behavior Research, State Street Associates.

“The move was largely driven by weaker sentiment in Europe and US, with the former falling just over 14 points, likely driven by escalating concerns that the European Central Bank may be well behind in the tightening cycle and therefore bring hikes forward.

“In addition, growing unease around UK fiscal outlook contributed to the volatility across European markets and in turn to the decline in confidence locally.

Interestingly, confidence of Asia investors was more resilient in October as the regional ICI increased over 4 points.”

The index is released globally at 10 a.m. Eastern time in Boston on the last Wednesday of each month.

Read the Index.

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The Global Investor Confidence Index roses to 110.1, an increase of 8.9 points from July’s revised reading of 101.2. Investor confidence was up across all regions, led by the European ICI, which rose 11.6 points to 104.8, and the Asian ICI, which rose 11.2 points to 98.4. The North American ICI also increased, albeit by a more modest 5.1 points to 110.7.

The Investor Confidence Index was developed at State Street Associates, State Street Global Markets’ research and advisory services business, in partnership with FDO Partners. It measures investor confidence or risk appetite quantitatively by analyzing the actual buying and selling patterns of institutional investors. The index assigns a precise meaning to changes in investor risk appetite: the greater the percentage allocation to equities, the higher risk appetite or confidence. A reading of 100 is neutral; it is the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets. The index differs from survey-based measures in that it is based on the actual trades, as opposed to opinions, of institutional investors.

“In spite of ongoing concerns related to the delta variant and vaccine numbers, investor confidence remained remarkably resilient in August and the Global ICI recorded its highest reading in more than three years,” commented Rajeev Bhargava, head of Investor Behavior Research, State Street Associates. “The resurgence in risk appetite has been uniform across all regions globally, with North America up 5 points and Europe and Asia both gaining double digits relative to July’s readings. While the positive sentiment is certainly encouraging, it will be important to see if investors can maintain this level of enthusiasm for risk assets in the coming months should Covid infection rates continue to trend higher and the Fed messages a more hawkish stance.”

The index is released globally at 10 a.m. Eastern time in Boston on the last Wednesday of each month.

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State Street MediaStats Thematic Indicators expands its offering.

State Street Corporation (NYSE:STT) has announced the launch of a new Bitcoin Thematic Indicator series to help contextualize the rising popularity of Bitcoin and how it is impacting more traditional financial markets. The series quantifies media coverage of Bitcoin, measuring the intensity or prevalence relative to all news of the day, as well as the sentiment of news over a period of time.

This new indicator series expands the State Street MediaStats Thematic Indicators offering, which was launched in November 2020^[1] in partnership with MKT MediaStats, a big-data information technology company specializing in financial markets. The indicators analyze hundreds of thousands of digital news sources to generate daily sentiment signals for various assets to help institutional investors form a more complete picture of what factors are driving their portfolios and overall markets. The new Bitcoin Indicator will capture vast information around the asset as well as its linkages to traditional currencies and emerging trends, which investors can leverage for portfolio planning and to gain indirect exposure through equity baskets.

“Over the last few months, media coverage around Bitcoin has grown significantly relative to corporate, financial and economic media markets and continues to trend higher,” said Rajeev Bhargava, head of the Investor Behavior Research Team at State Street Associates. “Understandably, institutional investors are increasingly eager to learn how this rising attention is impacting traditional asset markets. Our newest Bitcoin series provides a quantitative and timely measure of the tone and intensity of media discussion and reveals additional transparency into this highly sentiment driven market, enabling our clients to make more informed investment decisions.”

“Our indicators are built on a decade’s worth of natural language processing research combined with a strong academic underpinning,” said , managing partner and founder of MKT MediaStats. “Now, harnessing the power of vast data to provide real-time perspectives, we’re able to offer investors a tool they can leverage to make tactical and strategic judgments on key narratives that drive financial markets.”

State Street MediaStats’ full range of indicators now includes:

• Thematic Indicators that track 77 overall broad market narratives, including Bitcoin.
• Central Bank Indicators that gauge the degree of hawkishness in the monetary tones of 12 global central banks.
• FX and Country Equity Media Indicators that use natural language processing and machine learning to analyze large sets of unstructured media data, comprising international and domestic media, social media, business news and trading media. These indicators measure intensity, sentiment and disagreement in media coverage to assist portfolio managers in assessing the outlook for 33 foreign currencies and 44 global equity markets.
• Macro Linkages Indicators that track inter-asset connectedness among country equity markets and currencies.
• Company Media Indicators that provide insights into company dynamics using proprietary algorithms to measure the abnormal intensity, conditional sentiment and disagreement in media coverage of approximately 3,000 US-listed individual companies.
• Media Indicators that generate measures of the abnormal intensity, conditional sentiment and disagreement in media coverage of US sectors, industry groups and industries.
• Linkages Indicators that gauge the strength and impact of inter-company relationships based on company co-mentions in media for approximately 500 US-listed large-cap companies.
• Aggregate Linkages Indicators that track the dynamic relationships between sectors, industry groups and industries based on constituent company co-mentions in media coverage.
• Earnings Prediction Technology, or EPTech, which analyzes large sets of consumer data to gauge patterns of digital consumption for approximately 350 large US-listed firms. These patterns, reflective of consumer behavior in the real economy, can provide investors with an additional, distilled input as they formulate quarterly earnings estimates.

The State Street MediaStats indicators build on the capabilities of State Street’s hub for data science and academic partnerships, State Street Associates (SSA). SSA is an academic think tank which bridges the worlds of financial theory and practice, develops proprietary investment indicators, differentiated analytics applications and tailored investment strategies for institutional investors around the world.

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[1] https://newsroom.statestreet.com/press-releases/press-release-details/2020/State-Street-Expands-MediaStats-Offering-with-Central-Bank-and-Thematic-Indicators/default.aspx

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