Europe and Britain
European stocks rose as optimism about U.S. economic growth gathered pace and buoyed companies with U.S. exports. Analysts think that the U.S. is where the economic recovery will be the strongest. Although first quarter GDP growth in the U.S. registered an anemic annualized rate of 1.9 percent, it looks a lot better than the growth of large EMU members. (This did not prevent the dollar from sinking Thursday, however.) One needs to go to two decimal places to find that the EMU grew, up 0.03 percent at an annualized rate. France managed the best performance of the big three. French GDP rose an annualized 1.0 percent, while both Italy and Germany sank 0.4 percent and 0.9 percent, respectively.

European and British stocks rose on the week. The FTSE managed to climb above 4,000 again and remained above year-end levels. The DAX, notably the most volatile of the three indexes, managed to claw above its year-end level again as May ended. Only the CAC remains below year-end.

Asia
Asian equity investors followed U.S. news intently. Their export-driven economies rely on this nation. Japanese stocks recovered somewhat, but primarily because of the falling yen. Exporters have been hurt by weaker sales and declining profits, both thanks to the yen's strength. Sales have weakened because prices in U.S. dollar terms rise and profits fall when U.S. dollars are repatriated to Japan. Asian economies, especially China, Singapore and Hong Kong, are still assessing the damage from SARS that have set their economies reeling.

The Nikkei index has risen 10.7 percent from the trough it hit at the end of April. Though Japan's economy shows no sign of improvement. Fiscal year results show that companies are cutting losses if not returning to profit.

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