By Anne D. Picker, International Economist,Econoday
Monday, November 4, 2002

Once again, investors looking for the definitive direction of the U.S. economy were disappointed. A wave of data flooded investors but the waters were murky. Yes, the economy is growing - albeit slowly. Some measures are stagnant and moving sideways, others declining. The biggest reaction to Friday's employment data was in the currency markets. The dollar sank despite a rise in the stock market where investors were relieved that things were not worse. Considering the alternatives - virtually no growth in Europe and less in Japan - the dollar's weakness mystified all.

The Japanese government announced policies mid-week aimed at revitalizing the financial system and dealing with deflation. The plan to revitalize the Japanese economy once again disappointed. The plan represents a compromise between aggressive reform and gradualism. Although those in power say they remain committed to cleaning up bad loans, the original plan was too strong for politicians especially after being pressured by special interest groups such as banks.

Stock indexes ended the week mixed. Asian indexes fell with the exception of the Australian all ordinaries (which was unchanged for the second week); the London FTSE and Canada's S&P/TSX composite also fell. The declines ranged from 0.6 percent (Japan Topix) to 3.2 percent (Hong Kong Hang Seng).

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