Of course, the real action in recent days has been among the Tiger markets in Asia. This may not seem a good advertisement for efficient markets. The release of much higher official estimates for problem loans prompted speculation of more decisive policy measures to jumpstart the economy. Investors have repeatedly been disappointed once government plans are made public. However, with the financial year-end approaching, many commentators expect the market's current uptrend to continue for a few more weeks.
European markets promise strong earnings.
Once currency movements are taken into account, the performance of European stock markets so far this year has been only slightly better than elsewhere. However, it is in European markets where the present rally seems to have most justification. Not only have European stocks better earnings prospects, they are, on average, more cheaply valued and have less debt than do stocks in the US and Japan. This fact has been well recognized by US companies. If American companies are able to make the judgement that Europe represents better value, portfolio investors should do the same.