Investors continue to wear Teflon coats and deflect most bad news about economic performance, earnings and political uncertainties in favor of looking forward to a U.S. recovery next year. The difficulty in making forecasts under the current climate of risky political and economic conditions can't be overstated. The world virtually stopped for a few days in September and no one knows how quickly it will regain its equilibrium. True, the world economy was sagging prior to September 11, but it did seem to be stabilizing. How quickly it begins to steady again remains to be seen.

The ECB, while trying to build its independence and credibility, risks losing both by ignoring weakening EMU economic growth. The purchasing managers surveys to be released Friday are expected to show continuing declines in manufacturing growth. The weakening euro reflects, in part, the lack of confidence in the ECB, though it could also boost the competitiveness of manufacturers' exports.

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

The Bottom Line   •   Looking Ahead