Monday, December 11, 2000
The suspense continues...
Market volatility continues to be a way of life for investors. Each new earnings warning produces new downward pressures, especially on technology stocks. The exception, at least last Friday, was Intel. Other market forces outweighed Intel's warning and equities rose anyhow. Of the equity indexes tracked here, only the Nikkei was down on the week. And for the year, only the Australian all ordinaries and the Toronto Stock Exchange composite 300 are up. The twists and turns in resolving the U.S. presidential election continue to be unsettling to market participants worldwide. And with the latest convolutions, the uncertainty of how this will all end continues to weigh on investors' minds and actions.
None of the central banks meeting last week, including the Bank of England, Reserve Bank of Australia and the Swiss National Bank, altered their interest rates. The Bank of Canada issued the first of its new interest rate and economic assessment reports and also left interest rates alone for now. This is an effort by the Bank of Canada to separate its interest rate decisions from those in the United States.
At the European Union three-day summit meeting in Nice, France, it appears as though none of the structural issues that are important to the euro were resolved (the meeting stretched into an unprecedented fourth day on Sunday). Thorny issues being discussed are in preparation for the inclusion of the former eastern European block countries over the next few years. The key issue is the weighting of each member's vote, especially those of the three largest - Germany, Italy and France - and how that might, in turn, effect the smaller countries' voting power.
Repeat - markets don't like uncertainty
