EconoIndicators

Investor Confidence At a Glance

• Global Index: 92.1
• Monthly Change: Down 7.5
• Year-to-year Change: Up 8.6
• North America Index: 106
• Monthly Change: Down 11.1
• Europe Index: 82.3
• Monthly Change: Down 4.3
• Asia Index: 86.5
• Monthly Change: Up 1.6

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Investor Confidence Index Falls From 99.6 to 92.1 in September

Boston, September 18, 2007 – 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 September 2007.

Global Investor Confidence fell by 7.5 points to a level of 92.1. As with last month, North American institutional investors were responsible for a large portion of this global move, as their confidence declined from 117.1 to 106.0. European investors also played a role, as confidence in that region fell from 86.6 to 82.3. The confidence of Asian institutions showed a small up-tick, rising by 1.6 points to 86.5.

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.

“The behavior of institutional investors this past month reflected a return to more normal liquidity conditions,” commented Froot. “In the latter part of July and the early part of August, institutions accumulated equities globally as their risk appetite became relatively strong compared with other market participants who were selling aggressively. This accumulation by institutions proved worthwhile, as markets rallied steadily from August 16 onwards. In September, institutions were more selective in their purchases, and this is reflected in the latest confidence reading.”

“Evidence from data on short-sales compiled by State Street Global Markets is consistent with this view,” added O’Connell. “It suggests that, globally, institutional investors have been a steadying force during the recent market upheaval.”

September Results

Global 92.1
N. America 106.0
Europe 82.3
Asia-Pacific 86.5

State Street Investor Confidence Summary September 2007 [PDF]

Source: State Street Associates