Investor confidence down in January

The State Street Investor Confidence index (ICI) slid 3.8 points to 100.7 in January, driven down by a 7.3 point decline in North American ICI.

At the same time, the European ICI and Asian ICI both increased, with the European ICI rising 7.1 to 94.8 and the Asian ICI rising 3.1 to 115.9, respectively.

Although the investors’ confidence remained globally stable in the first month of the year, with vaccine rollouts and the prospect of additional stimulus in the US having provided additional support, the increases in the number of new COVID-19 cases and uneven vaccination rollouts hindered further gains, according to SSGM’s senior macro strategist, Marvin Loh.

“The decline in confidence in North America stands in contrast with the continued improvements in Asia, which has been buoyed by a more rapid return to economic expansion relative to western countries,” he said.

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“The pace and efficacy of vaccine efforts over the coming months will certainly set the tone for investors at the start of this new year.”

The index measures quantitatively investors’ risk appetite and an index reading of 100 is considered neutral and is the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets.