The State Street Investor Confidence Index for November (just released) fell -0.3pts to 98.9, driven by a -4.6pt fall in the Asian index to 116.1 and a -2.6pt fall in the European index to 86.5, while the American index was basically unchanged at 95.7. At a headline level it still shows a degree of skepticism by institutional investors to deploy cash towards risk assets such as equities, despite the almost 20% rebound in the MSCI All Countries World Index since the low in February, and the recent Trump-tear in US equities.
However, as mentioned in a previous note the upturn in the global investor confidence index is a positive sign. Historically when you see the global State Street Investor Confidence Index fall below the 100 point mark (a sign of institutional investors reducing exposure to equities, and therefore representative of skepticism/pessimism and generally low investor confidence)... and then turn up, it can often be a sign of a bottom in the market. Indeed, the depressed levels of the North American and European institutional investor confidence indexes may be reflecting still elevated levels of political risk and uncertainty - something that has the scope to be cast aside after key near term risk events such as the Italian referendum, ECB meeting, OPEC talks, and December FOMC meeting are all taken off the table. If these risk events come and go without causing any real damage it's quite likely that the passing of the shroud of political risk could pave the way for a flows driven rally as institutional investors return.