The news is so bad in Japan that the stock market should be making new lows everyday, but the opposite is true.

Business confidence in the Asian nation hit a 34-year low yesterday. According to the FT, "Sentiment among Japanese manufacturers has suffered its sharpest fall in more than three decades, according to the Bank of Japan much-watched Tankan quarterly survey." That goes all the way back to the brutal global recession which was brought on by Arab cuts in the supply of oil.

The Nikkei was up over 5% after the news came out. This might be attributed to the belief that the U.S. car makers will be bailed out, but big auto firms are only a small part of the Japanese economy. After falling sharply for months and being down 45% over the last year, during the last 30 days, the Nikkei is up about 6%.

None of this seems to make any sense unless the move is based on the old adage that stock markets look out six months and trade on where they think the economy will be then. If that is true, Japanese traders believe there will be an economic and earnings recovery beginning in the third quarter.

Japan's economy has fallen more sharply than many during this recession, and it may be the first to recover among the large industrial nations. At least its traders think so.

Douglas A. McIntyre is an editor at 247wallst.com.

Overseas markets got remarkable worse overnight. The Japanese Nikkei dropped 11.4% to 8,458. The Hang Seng in Hong Kong moved down 6.1% to 15,027. The Shanghai Composite dropped 4.3% to 1,910.

In early trading in Europe, the British FTSE fell 5.8% to to 3,842. The German DAX was off 5.4% to 4,602, and the French CAC 40 dropped 5.9% to 3,182.

Data from Reuters.

Douglas A. McIntyre is an editor at 247wallst.com.

The US markets did have a furious rally, rising 11% on major indexes. Overnight, Japan's Nikkei was up over 14%. The move to put money into banks and credit markets appears to be working.

But, don't forget the recession, which many economists see lasting longer than any downturn since 1974. Unemployment went to nearly 9% then. That is about 50% higher than the current 6.1% rate.

Yesterday, General Motors Corporation (NYSE:GM) said it would cut production more. Who would be surprised if the auto industry cut more jobs? The financial sector has lost tens of thousand of jobs, and as bank mergers go through, that is likely to go up sharply.

If there is on element which could pull the stock market back down, it is the realization that the economy is getting much, much worse and that corporate earnings will suffer accordingly.

A new wave of data about the economy will be coming soon. According to The Wall Street Journal, "The biggest data point is: the Census Bureau's retail sales report for September, on Wednesday. Economists expect sales tumbled for the third straight month, led by abysmal auto sales."

Investors who pour their money back into the market now, do so at their own peril. Don't forget the recession.

Douglas A. McIntyre is an editor at 247wallst.com.

Following the Dow and the NASDAQ here in the Americas, European and Asian markets almost unilaterally lost any previous gains, as the major indexes all fell. Both Henry Paulson and Ben Bernanke were both being pitched in the media as potentially saying the credit market losses were hurting the U.S. economy. As a result, the U.S. dollar was at a record low against the euro.

If it's not one thing with the U.S. economy, it's another, when it comes to the complete mess the mortgage overextension problem has created. Said Roberto Mialish from Unicredit Markets & Investment Banking: "The markets are reacting negatively to the renewed credit crisis in the U.S. and that's hurting the dollar across the board ... the market is speculating that Bernanke will offer a gloomy outlook for the U.S. economy.''

Below is a foreign market review for this morning:

European markets:

• The Dow Jones Euro Stoxx 50 Pr: at 3,132.37, down 83.87 (-2.61%)
• The FTSE 100 Index: at 5,173.10, down 127.30 (-2.40%)
• The DAX 30: at 6,049.42, down 150.83 (-2.43%)
• The S&P/MIB Index: at 27,059.00, down 689.00 (-2.48%)

Asia/Pacific markets:

• Nikkei 225 Average: closed at 12,754.56, down 255.60 (-1.96%)
  
• The S&P/ASX 200 Index: closed at 4,815.70, down 105.30 (-2.14%)
  
• Hang Seng Index: closed at 21,174.77, down 839.69 (-3.81%)

Hong Kong markets fell along with most Asian indexes as Foxconn International led a tech stock slump and HSBC led finance stocks lower yet again on fears originating out of the U.S.

Bloomberg quoted Nisu Harajchi from N1 Asset Management as saying "I'd want to stay away from the entire equity market ... if you look at the U.S. economy, housing market, and these newly created problems, which is the credit crisis, this is a big thing, taking the entire financial industry down.''

InBev will indeed acquire U.S. alcoholic beverage maker Anheuser-Busch for $52 billion after a month of court battles and what was appearing to be the start of a hostile takeover. This puts the 156 year-old American icon under Belgian control for the first time ever.

Below is a foreign market review for this morning:

European markets:

• The Dow Jones Euro Stoxx 50 Pr: at 3,227.57, up 39.79 (1.24%)
• The FTSE 100 Index: at 5,360.70, up 99.10 (1.88%)
• The DAX 30: at 6,231.66, up 78.36 (1.27%)
• The S&P/MIB Index: at 27,893.00, up 217.00 (0.78%)

Asia/Pacific markets:

• Nikkei 225 Average: closed at 13,010.16, down 29.53 (-0.23)
  
• The S&P/ASX 200 Index: closed at 4,921.00, down 58.90 (-1.18%)
  
• Hang Seng Index: closed at 22,014.26, down 170.09 (-0.77%)

Citigroup decided to sell its German retail banking division to France's Credit Mutuel for $7.7 billion as the financial behemoth continues reeling from the mortgage loan mess. In addition, analysts speculated that the European-region probably shrank for the first time since the single-currency Euro was formed almost 10 years ago.

In Japan, Shinsei Bank agreed to buy General Electric's consumer financing arm for $5.4 billion as GE continues to seek the sale of non-core operating units, such as its global appliance business months ago.

Below is a foreign market review for this morning:

European markets:

• The Dow Jones Euro Stoxx 50: at 2,819.21, down -14.51 (-0.51%)
• The FTSE 100 Index: at 5,391.40, down -15.40 (-0.28%)
• The DAX 30: at 6,234.31, down -70.69 (-1.12%)
• The S&P/MIB Index: at 28,590.00, down -181.00 (-0.63%)

Asia/Pacific markets:

• Singapore Straits Times: closed at 2,926.84, up 25.26 (0.87%)
  
• Nikkei 225 Average: closed at 13,039.69, down 27.52 (0.21%)
  
• The S&P/ASX 200 Index: closed at 4,979.90, up 42.50 (0.86%)
  
• Hang Seng Index: closed at 22,184.25, up 362.77 (1.66%)

European markets slumped and Asian markets held steady on the back of Wednesday's 236-point drop in the Dow Jones industrial average.

European markets:

• The Dow Jones Euro Stoxx: closed at 3,293.85, down -48.63 (-1.45%)
• The FTSE 100 Index: closed at 5,435.70, down -93.90 (-1.70%)
• The CAC 40 Index: closed at 4,258.26, down -81.40 (-1.88%)
• the S&P/MIB Index: closed at 28,590.00, down -181.00 (-0.63%)

Asia/Pacific markets:

• The MSCI Asia-Pacific Index: virtually flat at 132.05 after a drop of about 0.6%. Tech stocks were the decliners, while financial stocks were the advancers
• Nikkei 225 Average: up to 13,067.21, a gain of 0.1%. Singapore's economy expanded at the slowest pace in five years while New Zealand's manufacturing industry shrunk for the third time in four months in June. Said Chua Hak Bin with Deutsche Bank Private Wealth, "We think growth will be sub-par until the end of next year and there are signs the slowdown in the U.S. is broadening." Mitsushige Akino with Ichiyoshi Investment Management in Tokyo added, "Investors have realized there's no reason to sell Japanese banks based on the U.S. credit crisis ... they've been picking up more business overseas.''
• Hang Seng Index: up to 21,821.78, a climb of 0.073%. The Hang Seng's decline since November's high of over 31,000 isn't showing any decent recovery as of late. No surprise there.

After days of losses mirroring U.S. markets, China-related plays soared and other Asian markets also got a lift in Wednesday trading. Japan's Nikkei 225 Average rose 0.2% to 13,052 . China's Shanghai Composite jumped 3.8% and the Hang Seng China Enterprises Index saw a spike of 4.5% to 11,797. The word was that the rally in Shanghai was caused by speculation of a possible ban of pension fund managers from leaving their jobs less than a month before the Beijing Olympics begin.

Benjamin Collett with Daiwa Securities told MarketWatch, "What's (also) providing support to the (Shanghai) market is that valuations [are] at crisis levels and the Chinese economy isn't."

With the DJIA rallying 152 points yesterday, for, the streak is set to continue again today, taking some foreign markets along with it.

Japan's Nikkei Index, the weighted average of 225 stocks in major companies, fell for the 10th day. That has not happened since 1965.

According to the FT, "Rising fears about the impact of inflation on slowing economies took their toll on Japanese and other Asia-Pacific markets." That sounds a bit like the current trouble in the US.

A number of other indicies have had sharp declines lately. The Shanghai Composite has fallen by more than half since late last year. Rising energy and food costs in China have not helped it. Neither have concerns that a recession in the West could cut demand for its exports.

The Nikkei news says two things. The first is that the economies in other large nations may be as troubled as that in the US. Traders often look out several quarters when they make their buying or selling decisions. But, the second, more ominous sign from the Nikkei's decline is that it says that the smart money in Japan believes that the price of oil is not likely to fall. Japan is relies more on imports of crude that the US does.

The tough run for the Nikkei is not restricted to Japan. US and EU markets are likely to set records of their own, and not the kind that traders look forward to.

Douglas A. McIntyre is an editor at 247wallst.com.

Most markets in Asia sold off sharply.

The Nikkei fell 4.5% to 12,992. Canon was down 5.2% to 4570 yen. Honda (NYSE:HMC) was down 5.8% to 3070. Toyota (NYSE:TM) was down 3.3% to 5560.

The Hang Seng dropped 3.1% to 23,585. China Netcom (NYSE:CN) fell 23.5 yuan. PetroChina (NYSE:PTR) fell 4.9% to 11.26.

The Shanghai Composite moved up 2.1% to 4,438.

Data from Reuters.

Douglas A. McIntyre is an editor at 247wallst.com.

As bad news mounts and fears grow about the impending recession, stock markets dropped around the world in Monday trading. Adding to the woes, analysts expect that the Bank of China may have to write off at least 25% of its $8 billion [subscription required] mortgage securities holdings in the U.S. Prior to these reports, the bank had only admitted to the need for a $322 million provision for losses, according to today's Wall Street Journal.

Europe's Dow Jones Stoxx 600 Index took its steepest fall since its Sept. 11, 2001 tumble, dropping 4.2%. Since it reached its 6 1/2 year high in June, the index has dropped 22%. A drop of more than 20% puts this market officially into bear territory.

Other key losers today include:

• France's CAC 40 lost 5.1%
  
• UK's FTSE 100 dropped 4%
• Germany's DAX went down 5.9%
• MSCI Asia Pacific Index lost 3.7% and the MCSI Emerging Markets Index fell 5.1%
• Hong Kong's Hang Seng Index gave up 5.5%
• Japan's Nikkei 225 Stock Average lost 5.1%

With this type of global bloodbath, expect U.S. stocks to tank when they reopen tomorrow. They are closed today for the holiday. Investors are seeking safe havens in bonds and currencies.

Lita Epstein has written more than 20 books including "Trading for Dummies."

Markets in Asia rung up tremendous gains after a rate cut by the US Federal Reserave.

Share in Tokyo rose 3.7% and in Hond Kong the Hang Seng index was up 4.3%. According to Reuters, the gain in Japan's Nikkei was the largest in a single day since 2002.

Douglas A. McIntyre is a partner at 247wallst.com

If anyone on Wall Street is up at this hour, they were probably holding their collective breath as the clock ticked toward the open of China's markets today. Would more losses come out of the East? Would the Dow enter a spiral, instead of a "correction"? And at the opening bell, the Shanghai Composite was, indeed, down. But soon the market rallied and, by the end of the trading day, a nice 3.94% gain had been registered for a close of 2881.07.

You can let out your breath, now. Well, maybe not entirely; though China is doing well for the moment, Japan's Nikkei 225 Index fell 2.85%, or 515.80 points, to close at 17,604.12. Markets throughout Asia, in fact, were down in amounts ranging from tiny (Sri Lanka) to severe (the Phillipines), but for Taiwan (up 0.02%) and China.

What would Europe do? Evidently, continue along the downward path. At the FTSE's market open, the index fell, and at 3:24 a.m. EST was already down 2.31%. Will the markets keep tumbling, each one in reaction to the other, like so many global dominoes? Or will the U.S. again follow China and bounce back? Either way, the Dow Jones Industrial Average is still awfully close to record territory; I think we have a few percentage points to fiddle with before I'm hitting any panic buttons.