New figures released by the Sentix Institute in Frankfurt show that investors’ view of conditions in the eurozone and the world is now at its worst since May 2020.
“The ongoing uncertainty surrounding the gas and energy situation this winter has not diminished following the attack on Nord Stream pipelines. In addition to economic concerns, there is now an increased potential for an escalation of the military conflict in Ukraine.”
“Globally, there is no reason to be hopeful,” Syntex says.
Pessimism about the level of the financial crisis
The Eurozone investor confidence index shows minus 38.3 points for October, down from minus 31.8 in September. According to Reuters, the index of 34.7 points was expected in advance.
The current conditions sub-index fell from minus 26.5 in September to minus 35.5 in October, the lowest level since August 2020 — and according to the institute, this is a clear sign that the economy is in recession.
The expectations component is at its lowest level since December 2008, as it fell from minus 37.0 to minus 41.0.
“In previous recessions, monetary and fiscal policy actors would have taken action at this point at the latest to provide light at the end of the tunnel,” says Sentex, who believes measures taken so far may not be enough to rein in inflation and deflation.
Disastrous in Germany
The numbers for Germany refer to what Sentix refers to as “catastrophic conditions.” The overall confidence index fell to 37.4 points, the lowest level since March 2009. It is the fourth consecutive month that the index has fallen. The same applies to the sub-index of current conditions.
However, the expectations index fell to a new all-time low reading in October at -41.3, down from -36.0 the previous month.
“Politicians have already been released from their duties for less,” Sentix comments on the record low expectations poll.
“Strong Hitting Side”
Investor valuations are also on the decline in the US. The status indicator is now 0.3 points – thus negative for the first time since February 2021. In addition, the expectations component drops further to negative 24.3.
This contributes to the fact that the Sentix global confidence index fell from minus 18.7 in September to minus 20.3 in October, the lowest level since May 2020. Here, the expectations portion is decreasing with the lowest measure since January 2009.
“The global economic ship has suffered a severe setback, and there are currently no indications of forces that can correct it again,” Sentix wrote.
The Sentix index for October was based on a survey of 1,331 private and institutional investors from October 6 to October 8.
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