The market action today was dominated by headlines about Cyprus, which over the weekend, levied a tax against depositors in Cypriot banks. Accounts with less than 100,000 euros in deposits would receive a 6.75% tax while accounts over 100,000 would receive a 9.9% tax. The levy sparked fears of currency devaluation flows and spreading bank runs. However, European markets fell by less than 1% as they had been under pressure for the past two months. In the US, the uncertainty over the contagion effect in Cyprus prompted a 20-point drop in S&P futures at their 6:30 p.m. EDT open on Sunday night, but quickly rallied back by the the time equities opened for trading on Monday morning. The S&P 500 closed the day down after nearly reaching the unchanged mark.
The NAHB homebuilder sentiment survey dropped to a reading of 44 in March from last month's 46, well below the expected 47 reading. This is the second straight decline after 10 straight months of increases. The NAHB index is a survey of sales expectations for real estate agents and homebuilders.
Overnight, Chinese markets were weaker as Chinese property prices rose in 62 of 70 regions in February. This positive news was perceived as a negative. The Shanghai Composite fell 1.68% as the potential for monetary tightening increased. The industrial metals also didn't help the Asian stock sell-off. Copper was down 2.59% while palladium was down 1.72%. Gold also rose 0.72% as money sought safe haven assets.
Tomorrow's Financial Outlook
We will receive more housing data tomorrow morning in the form of February housing starts and building permits. Last month, housing starts showed a surprise decline to a seasonally adjusted annual rate of 890,000 from 973,000 in December. This month, economists expect that starts will expand to an annual rate of 915,000. Correspondingly, permits will remain unchanged at an annual rate of 925,000.
Globally, the UK will release producer and consumer inflation data, with the latter being key for the Bank of England's future policy decisions. Lately, the central bank has been hampered by rising inflation costs. Also, the ZEW institute will release its economic sentiment survey for the eurozone.
Tomorrow's notable earnings reports include Adobe
(NASDAQ:ADBE) and Cintas
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.