Our index fell back by two points in October and the drop was primarily down to one of its constituent factors - the performance of the Dow Jones Industrials.
| Investors Chronicle Confidence Index | |||
| Month | October | September | August |
| Index value | -28 | -26 | -29 |
The US stock market index was always going to throw a spanner in the works with the Presidential election looming and the uncertainty in the outcome it brings. US stocks ended the month lower even though there was an initial cheer for better than expected US employment data. But the mood quickly turned back and once again was overshadowed by the Presidential election. As a result, this factor's score fell by two points and returned into negative territory. This is naturally a very emotional time for investors but once the election is finished most individuals become more confident simply because there is a leader who has four years to make things better and there is nothing more investors can do about it. Historically, the Dow Jones responds after elections by rising for the rest of that year, so there could be a return to a positive score for this factor in November.
Our index would have been even lower had it not been for the factor that came from within the feel good category. According to Nationwide, house prices in the UK rose 0.6 per cent over the previous month in October and this pushed its score up by one point. The UK may have come out of recession, although economic conditions are still providing challenges for the housing market. The average price for a typical home is now £164,153.
