By Anne D. Picker, International Economist,Econoday
Monday, June 4, 2001

It was unanimous. All equities markets tracked here dropped on the week. Earnings warning season has arrived and investors' confidence of the last two months now shows signs of wavering. Some took profits that had accumulated in the April/May run up in stock prices. The steady stream of disappointing economic indicators worldwide also didn't help market players. In Europe, key manufacturing indexes sank as markets for manufacturing goods have dried up and unemployment showed signs of rising in France and elsewhere. In Asia, the Nikkei continues to erode as investors fret about reforms that are on the horizon somewhere, but have no substantive form or timetable. In the Americas, while Canadian first quarter gross domestic product surprised on the upside, manufacturing continued to be in recession in the United States.

The Bank of Canada lowered its benchmark lending rate a quarter point to 4.75 percent, the fourth cut this year aimed at bolstering consumer spending to offset weaker U.S. demand for Canadian exports. The central bank also said trimmed its target rate for overnight loans between banks by the same amount, taking it to 4.5 percent. That's 50 basis points above the comparable rate set by the U.S. Federal Reserve. The Canadian economy has always been quite sensitive to the vicissitudes of economic swings south of the border, and NAFTA has accentuated that vulnerability.

Introduction   •   Global Stock Market Indexes   •   Recap of Global Markets   •   Currencies   •  Indicator Scoreboard

The Bottom Line   •   Looking Ahead