Surveys
Investor Confidence Sours Further In August - State Street

Global investor interest continues to deteriorate, according to a measure of buying and selling tracked by the US firm.
Investors in Asia, Europe and North America grew gloomier about
the economic outlook in August, weighted by concerns about trade
wars and the risks of a “hard Brexit”, according to a barometer
by State
Street.
The Global Investor Confidence Index decreased to 75.9, down by
8.7 points from July’s revised reading of 84.6. Investor
confidence across all regions weakened, with the North American
ICI decreasing from 80.3 to 72.5, the European ICI dropped from
98.6 to 89.0, and the Asian ICI fell from 91.8 to 89.2.
Sentiment about the state of global markets and the economy has
been turning more cautious for some time. A few days ago, UBS
announced that it had
turned underweight on global equities.
The index 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 August, institutional investor sentiment declined once more
against a backdrop of downside risks to the economy, increased
political uncertainty in Italy, and the possibility of a hard
Brexit,” Rajeev Bhargava, managing director and head of Investor
Behavior Research, State Street Associates, said
"Monetary and trade policy uncertainty is reducing risk appetite,
and investors are watching for changes in interest rate
expectations following this year’s Federal Reserve conference in
Jackson Hole,” Bhargava said.
“This month's investor confidence index results reflect
investors' growing concerns about the global economic slowdown
and widespread declines in global manufacturing as the trade war
between the world’s two largest economies continues to escalate,”
Kenneth Froot said. “Investors are expressing renewed risk
aversion in the midst of heightened volatility in the financial
markets and a renewed inversion of the treasury yield curve.”