Investor Confidence Index Falls

Global institutional investors sharply accelerated their reduction of exposure to equities in January, according to State Street, whose Investor Confidence Index based on actual portfolios of their institutional clients fell to 70.2, down 9.4 from the revised December reading. The decline in the overall index was broad-based, but led by a plunge in confidence among North American investors, whose sub-index fell 7.7 points to a very low 66.8, while the European sub-index fell 2.6 points to 90.3 and the index for Asia fell 10.3 points to 100.2. State Street noted that the "warp speed" deterioration in confidence among professional managers continued through the third week in January even as stock prices partially recovered from Christmas-eve lows, and that while weaker Chinese data and rising recession risks in Europe are the focus, it is striking that confidence has deteriorated more in the U.S. than in other regions.