JP Morgan Asset Management believes that a fall in house prices and consumer spending has contributed to decreased investor confidence in the past few weeks. In its monthly confidence survey, the company saw its index fall to a four month low, from 69 in April to 67 in May. The number of negative responses towards the stock market increased from 18% to 22%.
These results were ascribed to pessimism over economic conditions - 27%, fear of falling house prices - 18% and high oil prices -18%.
Investors had contrasting beliefs concerning the future of interest rates, with 19% saying that they would fall, and the same number of respondents fearing an increase.
Our view
As ever, people get nervous and positive almost on a daily basis. The long term view is that of confidence.