By Anne D. Picker, International Economist,Econoday
Monday, March 19, 2001

Just a year ago all news, good or bad, could not affect the equity climb. Now good news, what little there is, gets lost as investors run for the exit. Equities started the week off on the left foot and couldn't seem to get in step. All the jitters that appeared to be under control erupted into a massive selling spree. Surprisingly, the dollar defied conventional wisdom and rose against both the euro and yen providing once again a safe haven for distressed investors - probably because everyone else was doing so poorly as well. Underlying the dollar's rise is continued confidence that interest rate cuts by the U.S. Federal Reserve will eventually succeed in reviving economic growth.

Attempts by the equity markets to rally in recent weeks have repeatedly been frustrated by bad news from the corporate sector, as the long run of gloomy statements especially from the technology sector continues unabated. Weak economic numbers did nothing to cheer investors. None of the markets tracked here ended the week on the plus side. Since the beginning of the year, only the Australian all ordinaries, the South Korean Kospi and Mexican Bolsa are on the plus side - all others are on the losing side of things.

The European Central Bank kept its policy making interest rate at 4.75 percent. This, despite growing evidence of a slowdown in EMU growth. The ECB's major concern is controlling inflation, which is currently running above their two percent inflation target. The impact on inflation from mad cow and now hoof and mouth disease is unknown. But what is sure is that the effects will go beyond food costs. Embargoes on meats and dairy products by the United States and other countries already are affecting export and tourist earnings, major sources of revenue for EMU countries.

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

The Bottom Line   •   Looking Ahead