A leading indicator of how institutional investors feel about market conditions, State Street’s Global Investor Confidence Index, posted a small increase this month, driven by optimism in North America. The July 2022 index was 102.2 points, up from 94.2 points in June 2022. It had been sub-100 since March 2022.

A score above 100 indicates positive institutional investor sentiment.

Lee Ferridge, head of multi-asset strategy, the Americas for State Street Global Markets, said in a : “Global sentiment has been boosted by hopes that central bank rates will not need to rise as much as previously feared, as activity data shows signs of slowing. Whether the much hoped for soft-landing can be achieved, however, remains a major uncertainty.”

Europe was the most pessimistic region and remained in negative territory; the European Investor Confidence Index gained 0.7 points month on month, to 85.7.

The index increased from 96.4 to 104.5 in North America and from 88.8 to 93.2 in Asia.

According to State Street: “A reading of 100 is neutral; it is the level at which investors are neither increasing nor decreasing their long-term allocations to risky assets. The index differs from survey-based measures in that it is based on the actual trades, as opposed to opinions, of institutional investors.”

State Street has a large business as a bank for institutional investors, with $38.2trn is assets under custody or administration. Its own fund business has €3.5trn in assets under management, as of 30 June 2022. The firm employs 40,000 staff globally, including roughly 1,000 in Luxembourg.