The US markets dipped slightly. This was the reaction around the world (I'm quoting Bloomberg):
The Nikkei Index suffered on Friday its single biggest drop of the year, plunging 3.19%. Hong Kong sank 4.8% before recovering to close down 2.9% at 13,102.73. Among other notable drops Friday, Sydney fell 2.91%; ditto Wellington; Kuala Lumpur 2.74%; Bangkok 2.38%; Taipei 1.63%, and Singapore 1.07%. By contrast, Shanghai advanced 3.89%, Shenzhen gained 3.64% and Bombay rose 0.5%.Doesn't it read like a B-grade novel -- the kind of thing that would happen if the hardened agent doesn't get to the supercomputer within three nanoseconds?It was a similar story Friday in Europe. Helsinki and Istanbul posted fractional gains. They were the exceptions. Frankfurt took the booby prize, falling 4.05%. Paris declined 2.26%, Oslo 2.17%, London 2.12% and Zurich 2%. Also retreating were Vienna (off 1.99%), Milan (off 1.98%), Amsterdam (off 1.94%), Copenhagen (off 1.81%), Dublin (off 1.71%), Stockholm (off 1.58%), Prague (off 1.09%), Lisbon (off 1.06%), Brussels (off 1.04%) and Athens (off 0.49%). Madrid was shut. Johannesburg Industrials fell 2.28% but golds rose 1.06%.
For the week ended Friday, Asia-Pacific (10 off, six up) outperformed Europe (12 off, six up).
The markets, by the way, are rather exuberant. Not irrationally so. Current financial theory holds that stock prices follow earnings. The stock market, on the other hand, has discounted future earnings. Rather than push up a stock whose earnings are higher than expected, the markets now push down a stock whose earnings barely meet expectations.
How do you characterize a stock market that has discounted all the good news? Exuberant. Give the fellow credit. He chooses his words well.
