A measure of actual buying and selling in global markets shows investors have become more concerned about the economic outlook.

All regions are down in the latest monthly report, with Europe leading the pessimism.

State Street's monthly Global Investor Confidence Index fell to 84.4 in October, dropping 3.4 points from September’s already revised 87.8, which was viewed then as an early indicator of a bumpy ride ahead.

European investors led last month’s decline, dropping from 100.2 to 90.9 on persistent political risk and disappointing growth. The North America index was down 2.6 points to 81.8 for the month; while Asia stayed steady dropping a fraction at 0.3 points to 99.6. The index measures investor confidence or risk appetite by analyzing the actual buying and selling patterns of institutional investors.

The figures reflect a fairly swift turnabout from major markets enjoying “record highs” at the end of the summer to institutional investors quickly signaling a readiness to reduce their exposure risk.

There’s been little let up since. Autumn brought further pain for equities, with the VIX volatility index running high and October’s US sell-off wiping out equity gains for the year, the report said for anyone needing reminding.

What’s rattling investors are “the high valuations” and “whether earnings may have peaked”, said ICI’s co-founder Kenneth Froot.

Confidence has dipped the last two months, but October stands out for the fact the ICI is no longer the only one “pointing to potential vulnerabilities”, said State Street’s global macro strategist Michael Metcalfe. “Business and consumer confidence are also beginning to wobble,” he said.

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. State Street argues that the index differs from survey-based measures because it is based on the actual trades, as opposed to opinions, of institutional investors.

“As major stock indices were hitting record highs near summer’s end, there were signs that institutional investors were reducing risk exposure. As we’ve progressed into fall, equities have declined further as the VIX has doubled. In the US, this month’s sell-off erased all 2018 year-to-date equity market gains. And amid concerns about high valuations and whether earnings may have peaked, some market participants seem to be anxious over a prolonged period of risk aversion,” Froot added.