EconoIndicators

Investor Confidence At a Glance

• Global Index: 81
• Monthly Change: Up 8.7
• Year-to-year Change: Down 11
• North America Index: 85
• Monthly Change: Up 8
• Europe Index: 76.3
• Monthly Change: Down 0.5
• Asia Index: 86.4
• Monthly Change: Up 0.2

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Investor Confidence Index Rises from 72.3 to 81.0 in May
5/20/2008

Boston, May 20, 2008 – 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 May 2008.

Global Investor Confidence rose by 8.7 points to 81.0 from a revised April level of 72.3. North American investors were the key drivers of this, as their risk appetite increased by 8.0 points from 77.0 to 85.0. In other regions, the confidence levels saw negligible changes from the previous month, with European investor confidence falling by 0.5 points to 76.3 and Asian investor confidence rose by 0.2 to 86.4.

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 Indexmeasures 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.

“While not quite as big as the bounce seen after August 2007, this month’s increase in Global represents a significant move,” commented Froot. “It continues the improvement in sentiment that our Index first registered in January, and suggests that the outlook of institutional investors is brighter than it has been for some time.”

“With European confidence remaining essentially flat this month, we note something of a divergence in the timing of the cycle on each side of the Atlantic,” added O’Connell. “The confidence of European institutions remained buoyant right up through the first quarter, prompting some talk of ‘European de-coupling.’ Our latest data suggests that it is not so much that Europe is de-coupled, as it is that Europe is delayed relative to the US in experiencing the effects of the current slow-down.”

Source: State Street Associates