Surf's Up Abroad

Jim O'Neill is trying hard to keep his composure. The head of global research at Swiss Bank Corp. in London, O'Neill last year spotted signs of surprisingly strong corporate profits despite the Continent's worst recession in decades. So what did it get him? Exasperation. European stocks, hit by inflation worries and dimming hopes for new Bund-esbank interest-rate cuts anytime soon, followed the U.S. bond market south, tumbling 8% since Dec. 31. "The biggest dilemma hitting markets this year," says O'Neill, "is that we've got economic growth."

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