Investor Confidence Index Falls from 75.8 to 65.9 in December(Graphic: Business Wire)
December 18 2007 - 10:00AM
Business Wire
State Street Global Markets, the investment research and trading
arm of State Street Corporation (NYSE:STT), today released the
results of the State Street Investor Confidence Index� for December
2007. Global Investor Confidence fell by 9.9 points to a level of
65.9, from last month�s revised reading of 75.8. North American
investors were once again the key drivers of this decline, as their
confidence fell over 10 points from 75.4 to reach an all-time low
of 65.3. Elsewhere, European investor appetite improved from 83.9
to 85.0, while the confidence of Asian investors fell from 86.6 to
85.8. Developed through State Street Global Markets� research
partnership, State Street Associates, by Harvard University
professor Ken Froot and State Street Associates Director Paul
O�Connell, the State Street Investor Confidence Index measures
investor confidence on a quantitative basis by analyzing the actual
buying and selling patterns of institutional investors. The index
is based on financial theory that assigns precise meaning to
changes in investor risk appetite, or the willingness of investors
to allocate their portfolios to equities. The more of their
portfolio that institutional investors are willing to devote to
equities, the greater their risk appetite or confidence. �This
month, our quantitative measure of global investor confidence
established a new low, cementing the evidence that investor risk
appetite has been strongly impacted by the one-two punch of the
August and November credit crises,� commented Froot. �In very
recent days, we do see institutional investors following more of a
holding pattern than a selling pattern, but the overwhelming
conclusion from the data is that they are much more skeptical about
fundamentals than they were in the first half of the year.�
�Continuing the pattern established two months ago, it is the North
American investor who has the bleakest outlook,� added O�Connell.
�European and Asian institutional investors have maintained their
risk appetite again this month, albeit at lower levels than we saw
a year ago. The North American pessimism is mirrored almost exactly
in the behavior of US Consumer Confidence over recent months, the
first time since 2003 that we have seen such congruence.� About
State Street Global Markets: State Street Global Markets provides
specialized investment research and trading in foreign exchange,
equities, fixed income and derivatives. Its goal is to enhance and
preserve portfolio values for asset managers and asset owners. From
its unique position at the crossroads of the global markets, it
creates and unlocks value for its clients with original flow-based
research, innovative portfolio strategies, trade process
optimization, and global connectivity across multiple asset classes
and markets. State Street Global Markets� research team of leading
academic and industry experts is committed to continually advancing
the science, including theory and application of its proprietary
investor behavior research and innovative portfolio & risk
management technologies to help its clients challenge conventional
thinking, shape ideas, make more informed investment decisions and
deliver measurable results. About the State Street Investor
Confidence Index�: The index is released globally at 10 a.m.
Eastern time in Boston on the second to last Tuesday of each month.
More information on the State Street Investor Confidence Index,
including frequently asked questions and a calendar of release
dates, is available at
http://www.statestreet.com/investorconfidenceindex. The previous
month�s calculations for the index are revised to account for
trading activity through the end of the reporting period. About
State Street: State Street Corporation (NYSE: STT) is the world's
leading provider of financial services to institutional investors
including investment servicing, investment management and
investment research and trading. With $15.1 trillion in assets
under custody and $2.0 trillion in assets under management at
September 30, 2007, State Street operates in 26 countries and more
than 100 geographic markets worldwide. For more information, visit
State Street�s web site at www.statestreet.com. This news
announcement contains forward-looking statements as defined by
United States securities laws, including statements about the
financial outlook and business environment. Those statements are
based on current expectations and involve a number of risks and
uncertainties, including those related to the pace at which State
Street adds new clients or at which existing clients use additional
services, the value of global and regional financial markets, the
pace of cross-border investment activity, changes in interest
rates, the pace of worldwide economic growth and rates of
inflation, the extent of volatility in currency markets,
consolidations among clients and competitors, State Street�s
business mix, the dynamics of markets State Street serves, and
State Street�s success at integrating and converting acquisitions
into its business. Other important factors that could cause actual
results to differ materially from those indicated by any
forward-looking statements are set forth in State Street's 2006
annual report and subsequent SEC filings. State Street encourages
investors to read the corporation's annual report, particularly the
section on factors that may affect financial results, and its
subsequent SEC filings for additional information with respect to
any forward-looking statements and prior to making any investment
decision. The forward-looking statements contained in this press
release speak only as of the date hereof, December 18, 2007, and
the company will not undertake efforts to revise those
forward-looking statements to reflect events after this date.
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