Friday, May 29, 2009

Confidence Game: Consumer, CEO and Investor Confidence May 2009 (Final)

This post combines the latest results of the Rueters/University of Michigan Survey of Consumers, the Conference Board’s Index of CEO Confidence and the State Street Global Markets Index of Investor Confidence indicators into a combined presentation that will run twice monthly as preliminary data is firmed.

These three indicators should disclose a clear picture of the overall sense of confidence (or lack thereof) on the part of consumers, businesses and investors as the current recessionary period develops.

Today’s final release of the Reuters/University of Michigan Survey of Consumers for May showed a another bump up for consumer sentiment with a reading of 68.7 an increase of 14.88% above the level seen in May 2008.

The Index of Consumer Expectations (an important component of the Conference Board’s Index of Leading Economic Indicators) increased to 69.4 climbing 35.81% above the result seen in May 2008.

As for the current circumstances, the Current Economic Conditions Index declined to 67.7 or -7.64% below the result seen in May 2008.

The latest quarterly results (Q1 2009) of The Conference Board’s CEO Confidence Index increased to a value of 30, but still remains near the lowest reading in the history of the index.

The May release of the State Street Global Markets Index of Investor Confidence indicated that confidence for North American institutional investors increased 9.6% since April while European confidence increased 7.5% and Asian investor confidence decreased 4.9% all resulting in an increase of 3.1% to the aggregate Global Investor Confidence Index which now rests 5.74% above the result seen last year.

It’s important to note that with the May release, State Street revised the entire series in an effort to “provide a better guide as to the level of risk tolerance”.

In the release they suggest that the only change that made was a re-basing of the series to 100 but the curve seems to reflect a change in the methodology too.

In any event, the current series appears to confirm that since 2000 the trend has been consistently down as investor’s sentiment and apparently “tolerance for risk” has continually eroded.

The chart below (click for larger version) shows the Global Investor Confidence aggregate index.