Recap of global markets

Europe and Britain

The London FTSE 100, Paris CAC and Frankfurt DAX swooned in May and June as they continued to track the ups and downs of U.S. equities. Although the three indexes rallied Thursday and Friday, they still have a long way to go to recoup their losses. At the end of the first quarter both the FTSE and DAX were up on the year. Now they are down 10.8 percent and 15.1 percent respectively. The CAC, which was down only 2.4 percent at the end of the first quarter, is now down 15.7 percent on the year. Contributing to the declines was an overall anemic economic performance in Europe, which essentially relied on exports for the little expansion that it saw. Even the prospect that U.S. growth will slow from its unsustainable pace of the first quarter, the European outlook for growth still lags that of the United States.

Asia

The hero in Asia remains the South Korean Kospi, although too it is not immune to the downward slide in global stocks. It still managed to be up 7.1 percent at second quarter’s end. However, this compares unfavorably to the heady 32.3 percent gain that the Kospi recorded at the end of the first quarter.

Both the Nikkei and Topix have given back much of their appreciation that occurred prior the close of their fiscal year on March 31. Although the Nikkei barely has its head above water, up 0.8 percent, it has lost most of the 7.5 percent first quarter rise. Ironically, the Nikkei outperformed indexes in the United States and Europe. The Topix has lost all of its 5.4 percent first quarter rise and then some. It was down 0.7 percent at the close of business Friday.

The Singapore Strait Times index dropped just under 14 percent in the second quarter and is down 4.4 percent on the year. At first quarter’s end, the index was up 9.6 percent.

Finally, the Hong Kong Hang Seng, despite a rally in May, succumbed to the downward pressures and ended the second quarter down 7 percent. The Hang Seng was down 5 percent at the end of the first quarter.

Americas

Investors’ confidence has been severely eroded by the continual barrage of corporate travesties. Now, only the Mexican Bolsa stands — just barely — above year-end levels. At the end of the first quarter, only the Nasdaq was on the minus side, down 9.3 percent. Now, it has lost 24.9 percent when compared with year-end 2001. The Dow, which was up 2.5 percent at the end of the first quarter, is now down 7.8 percent. The Toronto S&P/TSX composite, which tracks the Dow, was up by 1.2 percent at the end of the first quarter but now is down 7.1 percent. Stocks have been hammered brutally at each new corporate revelation. This coupled with the earnings confession season created a very volatile atmosphere as the quarter ended.

Foreign investors bought $17.6 billion more U.S. stocks than they sold in the first quarter, according to Treasury Department figures. That's down from $46.7 billion a year earlier. Net purchases by foreigners of U.S. corporate debt dropped to $48.6 billion, from $68.5 billion a year earlier.