Europe and Britain
The FTSE 100 reached the 4000 level and after several attempts managed to stay there. The FTSE is holding above its year-end 2002 mark, up by 2.8 percent. The DAX also managed to remain above year-end, up 3.3 percent, while the CAC continues to struggle. It is down 2.25 percent since December 31st. Both the CAC and DAX were higher on the week, despite the continuing stream of depressing economic data. The gross domestic product of Germany, Italy and the Netherlands shrank in the first quarter while flash EMU GDP was flat, signaling that Europe could be on the brink of recession. Investors appear to be looking beyond the current soft spots, which they are attributing to the war, to more robust growth later in the year.

Asia
Asian equities were weak last week, as the economies there continued to be badgered by the unending SARS epidemic. As if shaky growth wasn't enough, countries such as Japan that are extremely export oriented now are worried that exports will decline because people in China, for example, are not shopping. China is a major export market for Japan along with the United States. Japanese GDP was unchanged in the first quarter, dragged down ominously by weak exports. Japanese companies that do business in the U.S. are being hurt by the weak dollar, which plunged below 115 yen, its lowest since July. A weaker U.S. currency means exporters get less for their dollar-denominated sales, while their products become less competitive. Both the Nikkei and Topix declined on the week for their first weekly declines in three.

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