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Investor Confidence Index

July 9, 2003 14:22 GMT

State Street Investor Confidence

State Street Investor Confidence

Confidence rises as year comes to a close

Author Name, Title, State Street Global Markets
email@statestreet.com, 617 664 xxxx

State Street's Investor Confidence Index? rose moderately in December. The index now stands at 94.0 (1998=100), compared to 92.1 in November. The index remains above the 21-month lows reached in July and August 2002, and suggests that investors are gaining confidence as they look towards 2003. The State Street Investor Confidence Index? measures the attitude of investors to risk. Unlike other survey-based confidence measures that focus on expectations for future prices and returns, the SSIC index is a quantitative measure of the willingness of global investors to invest in risky assets, based on aggregated data encompassing 15% of the world's tradable assets. Information through December 18th was incorporated in this month's calculation. "The sharp decline in sentiment that occurred in November reflected a reduced willingness to take on risk, even as fundamentals improved" says Paul O'Connell, Partner of State Street Associates. "In December, investors are displaying some renewed optimism as the year draws to a close."

Chart 1: State Street Investor Confidence Index (1998=100)

Market prices reflect both fundamentals and investor risk preferences. While timely information on fundamentals is available from multiple sources, the State Street Investor Confidence Index is the first direct and timely measure of investor sentiment. For further information, see the State Street white paper, The State Street Investor Confidence Index.