Euro-zone Confidence Improving

Ian Cheshire,CEO of Kingfisher,the world's third-largest home improvement retailer behind Home Depot and Lowe's,says they're seeing consumer confidence improve in the Euro-zone.They're not seeing big numbers.Kingfisher's sales were up one percent.Most people are waiting for unemployment to at least top out.There's a slight sense of wait and see,Mr.Cheshire noted.
To respond to the situation,Kingfisher is keeping very flexible in its supply chain.There's been a huge increase in shipping rates from Asia,necessitating the flexibility.Kingfisher is also focused on innovation in a flat market.People are going for bold patterns in wallpaper and the green trend.
You get big shocks,sudden spikes in business,Mr.Cheshire explained,and you have to be able to react.The first half of this year looks pretty tough.At best,we're looking for a second-half recovery,in Ian Cheshire's view.

Singapore Expects Solid Growth

Leo Yip of the Singapore Economic Development Board is expecting 4.5-6.5% growth this year,in tandem with the rest of Asia.That's exciting for us,he said.We think Singapore can play a role in companies expanding their Asian footprint.Singapore has excellent connectivity.It sits in the center of rising Asia,a global business city with a business infrastructure.As Asia rises,Asia is gonna demand more and more products and services that suit its own tastes.Singapore provides companies an excellent way to test those products and services for Asia.
We see the growth of Asia as a medium to long term trend,Mr.Yip explained.Singapore presents those companies with a useful proposition.We encourage companies to have a medium to long term Asian strategy.Singapore offers companies a place to integrate their Asian operations,in Mr.Yip's opinion.

Greek Crisis Looking Better

At least for the moment,the Greek debt problem seems to be closer to resolution.German Chancellor Angela Merkel praised Greece for reigning in spending in a remarkably short time.If necessary,she said,they will defend their euro together.Dominique Struass-Kahn,Managing Director of the International Monetary Fund,believes the problem is unlikely to spread.Half of Greece's outlay had been for public sector wages and benefits.Big cuts to that spending have led to rioting,to which police responded with tear gas and batons.
Greek finance minister George Papaconstantinou said they took some difficult measures to show their determination.There is absolutely no question that they will meet this year's target.It's not just a Greek problem;it's a bigger problem.The unrest is normal and expected when they have such difficult reforms.It is encouraging that opinion polls are broadly supportive of the government.The biggest deficit they face is a credibility deficit,in Mr.Papaconstantinou's opinion.

A Morgan Stanley Analysis

Henry McVey,Chief Investment Strategist at Morgan Stanley,thinks Germany's in pretty good shape.The UK may be the next problem.There's tension between high leverage and sustaining growth in Europe.What's really a risk-free asset?The U.S. is gonna be somewhat of a safe haven.Treasuries haven't sold off,and the dollar has rallied.
Mr.McVey still thinks most of the emerging market currencies are a good bet.They've been owning some high yield growth stocks outside the U.S. such as Nestle.A lot of the most levered companies are pretty expensive right now.
I don't think the sovereign debt issue is going away,Mr.McVey said.It's a multi-year issue.It's tough medicine to bring down your leverage.It's the first time in the capital markets that Asian inflation exceeds that of the developed nations.There's more stress to come for the pound and the euro,Mr.McVey predicted.

A Complex Recovery

Europe accounts for 29% of U.S. exports and 8% of U.S. revenues.That is why the Eurozone debt crisis is such a concern across the Atlantic.The domino effect is much on the minds of financial leaders in America.
Spain contributes 12% to the Eurozone economy,while Greece yields 3%.The fiscal problems in Spain are not as bad as in Greece,says Nariman Behravesh,Chief Economist at IHS Global Insight.Spain is in the second year of a recession,with 20% unemployment.The big question is,what are they reasonably gonna do?None of the countries has come up with a credible debt reduction program.A Greek default has to some extent been priced in the market,but a Spanish default could split up the Eurozone.That has not been priced in.We're talking about a multi-speed recovery,a "LUV" recovery,with Europe being the L;the U.S. being the U;and Asia being the V,in Mr.Behravesh's opinion.
Greek Prime Minister George Papandreou announced a second round of budget cuts yesterday.The first round prompted rioting.Without the promise of cuts,Greece would not receive aid from its neighbors or the International Monetary Fund.