Europe and Britain
Markets across the pond joined in the celebration when the Fed lowered interest rates. British, French and German markets also seemed to have bottomed out before the move and had been rising since hitting their low points at the beginning of April. As everyone held their breath, earnings reports began to flow in. And they showed the extent to which the U.S. slowdown is affecting European companies and their profits. With a holiday shortened week for the FTSE, DAX and CAC, investors had 4 days to think about what they might do. Interestingly, the technology and telecommunications stocks were the focal points for investors. Some major companies reported earnings that were as bad as expected. However, reaction to the disappointing news was muted when compared with earlier reactions to earnings forecasts just a few weeks ago. Investors seem to be looking beyond this bad patch.

Asia
In the holiday shortened week for the Hong Kong Hang Seng and Australian all ordinaries, investors became more positive, thanks to the steady improvement in U.S. market performance. And they all celebrated the Fed rate cut in Thursday trading, but somewhat more reservedly than would have been expected. All indexes tracked here showed impressive gains on the week.

However, on Friday, investors decided to smell the profits after a series of recent gains. In Tokyo, the Nikkei slipped ahead of a string of earnings reports due next week and the outcome of Liberal Democratic Party leadership elections on Tuesday. The winner will become Japan's next prime minister replacing Yoshiro Mori. The Nikkei has crawled back almost to where it was at the beginning of the year.

The Hong Kong Hang Seng celebrated the Fed's interest rate deduction and a 50 basis point drop of their own to 7.5 percent. But on Friday there was some profit taking. The Hong Kong dollar is pegged to the U.S. dollar and the policy setting interest rate here moves in tandem with the United States. The Hang Seng has gained 12 percent since reaching its low point in the first week of April, but it is still down just under 11 percent since the beginning of the year.

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

The Bottom Line   •   Looking Ahead