Global Markets and Economic Update

FOREIGN STOCK MARKETS

Stock index trends in native currencies and in dollars adjusted for currency fluctuations. The dollar-adjusted returns are what U.S. investors would realize.

Last week Year to Date Market Native In dollars Native In dollars Argentina +6.9% +6.8% +40.4% +40.1% Australia +2.7 +2.8 +30.3 +25.1 Brazil -2.7 -8.5 +2,032 +72.1 Britain +0.9 -1.2 +12.6 +11.5 Canada +4.0 +4.1 +15.5 +10.5 Chile +0.4 +0.6 +20.6 +11.7 France +0.2 -2.0 +17.9 +13.2 Germany +1.2 -0.2 +32.1 +31.5 Hong Kong +11.1 +11.1 +61.6 +61.9 Indonesia +3.4 +3.4 +64.5 +61.7 Italy +1.6 +1.2 +40.7 +30.8 Japan -0.4 -1.6 +25.2 +45.2 Korea +3.1 +3.4 +10.6 +7.5 Malaysia +0.7 +0.6 +57.2 +61.7 New Zealand +3.9 +3.7 +44.5 +55.1 Singapore +5.2 +4.9 +34.4 +40.2 Spain +2.2 +1.8 +47.2 +29.0 Taiwan +5.0 +5.0 +20.8 +14.3 Thailand +1.2 +0.9 +34.3 +35.8 U.S. +1.4% +7.1%

Source: Morgan Stanley Capital International

MEXICAN STOCKS

* The Bolsa index sold off Tuesday after more than a week of consecutive daily gains. The index slumped 30.98 points from Monday’s all-time high of 1,991.61, pulled lower by Wall Street’s decline.

* The recent buying wave was spurred by growing belief that the North American Free Trade Agreement will be ratified by Congress in November. Sentiment was helped last week when U.S. Sen. Sam Nunn, usually a hard-liner on trade, said he will support NAFTA.

* Assuming the U.S. market stabilizes and NAFTA passage continues to appear likely, traders believe the Bolsa index should easily top 1,200 soon.

Source: D.A. Campbell

SPOTLIGHT: SOUTH AFRICA

South Africa’s struggling economy will derive little immediate benefit from the progress toward dismantling apartheid. A weaker currency and the suspension of economic sanctions will spur some growth, but political violence and tight government monetary and fiscal policies will weaken any recovery.

Sources: Bank of America; World Information Services