Confession season takes its toll
	International Perspective – June 24, 2002
	Anne D. Picker, International Economist, Econoday

Last Week’s Highlights

As the pre-earnings season unfolds, investors are even more jittery than usual. Stepped up terrorist attacks in the Middle East and terrorist warnings here have everyone edgy. And when investors think there are no more skeletons in the corporate closet, another one pops out, eroding confidence in virtually everything and anything business. Despite the soaring euro and pound sterling, equities in France, Germany and Britain have yet to benefit from currency inflows. Rather, stocks everywhere are being pounded by doubts. On the week, indexes followed here were down anywhere from 0.6 percent (the London FTSE 100) to 5.3 percent (the South Korean Kospi). The Nikkei sank 5.2 percent.

A rash of merchandise trade data were released last week. The U.S. deficit soared to the benefit of exporters everywhere. Global economies are reviving again thanks to relatively strong U.S. growth, market confidence or not.

In Germany, labor negotiations continue to be fractious. Thousands of building workers have abandoned their posts in the country's first post-war construction strike. For Chancellor Schroeder, who faces national elections in less than one hundred days, the construction strike is potentially the most damaging of the disputes that have swept the nation since April. Many building firms are facing bankruptcy, the result of one of the deepest construction recessions on record. Despite this, a weekend ballot result showed more than 98 percent of trade union members backing a strike.