The terrorist attacks on the United States compounded already high uncertainty about the world economic outlook. The risks to growth remain on the downside even after the concerted central bank rate cuts earlier this week. Long before September 11 overall equity prices had been falling, a drop that had accelerated immediately before the attack. We must remember that it is extremely hard to make economic assessments right now because of the unusual level of uncertainty; separating short term from long term consequences is unusually difficult.

Investors hate uncertainty but for some time to come they will have to control their emotions and get on with the business of providing capital to business. Economic growth was already teetering on the brink of recession in Germany, Italy and the United States. Japan has been mired in recession with barely any growth for about 10 years. Reciting statistics that compare market performance with the unrealistic highs at the end of the nineties doesn't serve much of a purpose. Investors weaned on the heady 90's are beginning a new learning curve.

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

The Bottom Line   •   Looking Ahead