By Anne D. Picker, International Economist,Econoday
Monday, September 30, 2002

Most equities indexes followed here faltered last week - not surprising given the number of uncertainties that continue to dog investors. Earnings guidance has been mixed leading up to the end of the quarter as has U.S. and international economic indicators. The close German election and escalating war rhetoric didn't help investors either. On the week, five indexes rose anywhere from 0.2 percent (Mexican Bolsa) to 2.1 percent (Paris CAC). On the downside, losses ranged from 0.4 percent (Hong Kong Hang Seng) to 5.7 (South Korean Kospi). The Dow and Nasdaq were down for a fifth consecutive week while the Frankfurt DAX, down 43.4 percent this year, holds the dubious distinction of being the worst performer of the major indexes. (For a review of third-quarter equities performance, read this week's short take on Wednesday, October 2.)

Gerhard Schroeder, who won a second term as German Chancellor by the narrowest of margins, now has to tackle the issues that almost lost him the election: rising unemployment and a faltering economic recovery. With only a nine seat majority vs. the 21 seat edge his coalition held previously, traders and analysts quickly decided that Schroeder's ruling coalition with the Green Party would face difficulty in passing economic reforms that are seen key to revitalizing the stagnant German economy.

Group of Seven finance ministers met on Friday and as usual took turns giving press conferences. The traditional communiqué did not single anyone out as needing to improve performance. However, Treasury Secretary Paul O'Neill did criticize Japan and its newly proposed stimulus plans; Finance Minister Masajuro Shiokawa and Bank of Japan Governor Masaru Hayami defended the plans.

Last Week's Highlights   •   Global Stock Market Indexes   •   Recap of Global Markets   •   Currencies   •  Indicator Scoreboard

The Bottom Line   •   Looking Ahead