 EUROPE
Slow and Steady
"Whatever kind of landing the U.S. has, Europe's will be softer," says Michael Levy of Deutsche International Equity fund. European growth for 2001 doesn't figure to be much better than that in the U.S. The difference is that for Europe, this means almost holding steady, whereas the U.S. is crashing down from the heights. Consumers in Europe aren't nearly as rattled by market drops and higher fuel prices as those in the States. After all, unemployment is still on the downtrend and European personal savings are high. A stronger euro — it could be worth more than a dollar by the end of the year — will make consumers feel a bit richer and central bankers less hawkish on rates. Look for a rate cut by the European Central Bank as early as April. Just don't expect market fireworks.
HSBC
Here's a financial play with fairly modest exposure to the U.S. The giant bank (which trades on the London, Hong Kong and New York exchanges) does most of its business in Europe and Asia. In Europe, HSBC will be poised to take advantage of falling interest rates, and it's also a big consolidator in Asia.
Buhrmann
Deutsche's Levy likes this Netherlands office-supply wholesaler because it combines the defensive with the trendy. The company has operations in the U.S., but despite a slowdown, it will be tough for companies to cut back on essentials like paper and printer toner. Growth will come as more corporations decide to outsource quotidian tasks like keeping the supply closet full.
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