EconoIndicators

Investor Confidence At a Glance

• Global Index: 74.3
• Monthly Change: Down 7.7
• Year-to-year Change: Down 7.9
• North America Index: 78.9
• Monthly Change: Down 10.3
• Europe Index: 84
• Monthly Change: Down 0.9
• Asia Index: 86.9
• Monthly Change: Down 0.8

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Investor Confidence Index Falls From 82.0 to 74.3 in November

11/20/2007

Boston, November 20, 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 November 2007.

Global Investor Confidence fell by 7.7 points to a level of 74.3, from last month’s revised reading of 82.0. North American investors were the key drivers of this decline, as their confidence fell from 90.4 to its second lowest reading ever of 78.9. In other regions, risk appetitive remained broadly unchanged, with European investors recording a small decline of 0.9 points to 84.0, and Asian investors recording a small increase of 0.8 points to 86.9.

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’s decline in Investor Confidence takes place against a backdrop of deteriorating fundamentals, including a diminished outlook for consumer spending and global growth, and some acute credit pressures on the financial sector,” commented Froot. “While institutional investors were happy to provide liquidity to other market participants during the market turmoil of August, they have now decided that the risks to the underlying economy are much greater than before, and have reduced their allocations to risky assets with purpose,”

“The underlying data produced by State Street Associates shows that US investors have reduced their allocations to equities, particularly in the emerging markets, but also in the US,” added O’Connell.

Source: State Street Associates