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State Street Investor Confidence Hits a New All-Time Low


Global Investor Confidence as measured by State Street Corporation dropped to its lowest level ever this month.

State Street also assigns a North American Investor Confidence measure, which is less dire, albeit low and trending lower. The North American reading declined month over month to 79, which is the lowest level since December 2008!

In the below chart, the black line is the State Street North American Confidence Index plotted with the SPX.

Quoting State Street again "This shift is reflective of the changed investment outlook, with improved US prospects offset by slowing growth in the Asian region. The net effect is that institutional investors have little appetite for risky assets."

The contrarian in me is amazed by the resilience of equity markets such as the Standard & Poors 500 index in the face of this pervasive negativity. Every day we are reminded of another reason why the equity markets should head lower, not higher.

Maybe it is a hard-wired cognitive bias we as humans possess that has been freshly stoked by the recent crisis. Prepare for the worst, but, hope for the best. A "fool me once, shame on you; fool me twice, shame on me" attitude…

Where there is risk, there is opportunity and it is tough to imagine a bull market perishing in the face of despondency and disbelief.

This article by Chris Prybal was originally published on Schaeffer's Investment Research.

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Twitter: @schaeffers
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