The main event today continued to be Cyprus. The lows of the day were reached after news filtered out that the Cyprus ruling party would not support the deposit levy that was proposed yesterday by the EU in exchange for a $13 billion bailout. The bill had modifications that made the levy less onerous to smaller account holders, but it was still nearly fully opposed by the Cyprus parliament. Now, Cyprus is seeking a potential loan from Russia as more than 30% of Cyprus' deposit base comes from Russia. At the end of the day, the ECB reiterated its commitment to providing liquidity to Cyprus, but the precondition is that Cyprus must first accept the bank levy.
US economic data this morning saw a slight increase in February housing starts and a sizable jump in building permits. Annualized housing starts rose to 917,000 from last month's 890,000, above the 915,000 estimate. Building permits rose to 946,000 from last month's 925,000 and the 925,000 estimate. However, the prior months in both had offsetting revisions as January housing starts were revised up to 910,000 from 890,000 and building permits revised down to 904,000 from 925,000. In Europe, February car sales dropped 10% YoY to 829,539 vehicles, down from 923,553 a year earlier. The decline was attributed to a severe drop in sales Italy and the unease over the Italian election results.
Treasuries mounted a strong rally today as the 10-year yield fell by 5 basis points. Industrial commodities continued to weaken; copper declined by 1% and palladium was down 3.93%. WTI crude fell 1.71% and Brent crude dropped 1.80%.
(NASDAQ:DELL) edged up slightly as Blackstone
(NYSE:BX) was said to be a potential buyer for the company for more than Dell's original $24.4 billion LBO price. The company has a "go shop" clause that allows it to seek higher buyout prices by March 22.
Tomorrow's Financial Outlook
Tomorrow's highlight will come from the FOMC, which will issue its monthly rate decision. No reduction in its current asset purchase plan is expected. The FOMC will likely reiterate its dovish stance and remain steadfast on its mandate of lowering the unemployment rate. The FOMC will also release its economic projections and Chairman Ben Bernanke will hold a press conference at 2:30 p.m. EDT.
Global economic data releases include eurozone consumer confidence and UK employment figures. The UK unemployment rate is expected to remain unchanged at 7.8%. Eurozone consumer confidence is expected to remain relatively unchanged month-to-month.
The major earnings reports on the calendar include General Mills
(FDX), Jabil Circuit (
JBL), and Oracle
No positions in stocks mentioned.
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