Institutional investor confidence in decline

Confidence amongst North American institutional investors has declined from its recent uptick, according to the latest State Street Investor Confidence Index for June, 2017.

The index declined to now stand at 101.0, down from 102.6 in May, with confidence among both Asian and North American institutional investors falling by 4.4 points and two points respectively.

By comparison, the European index increased by 1.7 points.

Commenting on the June index, State Street Associates Kenneth Froot noted the decline in North American sentiment.

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"May's note of optimism after months of de-risking did not strengthen in June, with the Global ICI numbers hovering over the neutral 100-level mark,” he said. “Even in North America, while the index remains in a ‘risk-on’ territory, the decline in investor confidence was likely driven by intensified concerns around overvaluation, oil prices and the US energy policy, as the Fed delivered its second rate hike in 2017.” 

State Street Global Markets head of macro strategy, EMEA, Timothy Graf said sentiment remained rather subdued across regions as investors did not appear to enthusiastically endorse the steady climb of risky asset valuations.

“The neutral read on investor behaviour disproves the notion of market complacency in the face of many latent risks,” he said.