Stocks are rallying this morning as European finance ministers agreed overnight that Cyprus has met the terms of its bailout.
The bank deposit levy that angered so many is still in place. Deposits under 100,000 euros are still protected, but richer savers will get a much closer haircut than previously thought. Though it isn't completely clear yet, reports suggest that uninsured deposits and bondholders might be taxed by as much as 30-40%.
Laiki Bank, the island's second-largest lender, will be split up between normal accounts and those with uninsured deposits and toxic assets. The former portion will be merged into the Bank of Cyprus and the latter will be wound down gradually.
Essentially, this deal still rocks people's (and Russian money-launderers') trust in the banking system, since the tax doesn't only affect wrongdoers -- wealthy Cypriots will also bail-in their country. However, Cyprus did avoid the other possibility, a total financial meltdown and a messy exit from the euro.
Investors are reacting positively to the news from Brussels. Asian and European shares rose overnight and futures are higher after falling for the second week this year. Dow
(INDEXDJX:.DJI) futures are up 0.26% at 14,498. S&P 500
(INDEXSP:.INX) futures rose 0.41% to 1,558.30 and Nasdaq
(INDEXNASDAQ:.IXIC) futures gained 0.54% to 2,808.50.
No major US economic indicators are due out today aside from the Dallas Federal Reserve's Business Activity Index, which is projected to rise to 3.4 this month from 2.2 in February.
In corporate news, Blackstone Group
(NYSE:BX) and activist investor Carl Icahn both submitted bids to take Dell
(NASDAQ:DELL) private. Both offers exceeded the $24.4 billion bid from founder Michael Dell and Silver Lake Management, a private equity firm. Blackstone is sweetening the deal by offering to bring Mark Hurd, who once successfully led rival Hewlett-Packard
(NYSE:HPQ) and currently sits as president of Oracle
(NASDAQ:BBRY) could see heavy trading today. On Friday, the company's shares fell nearly 8% as the US debut of the new Z10 smartphone didn't attract much fanfare. Goldman Sachs
(NYSE:GS) downgraded the company to neutral from buy, sending shares down another 5.43% in the premarket.
(NYSE:VZ) can also see heavy trading on speculation that Vodafone
(NASDAQ:VOD) might either sell its 45% stake in Verizon, or merge itself into the US company.
The US Senate voted on Friday to allow states to charge sales taxes for online retailers with more than $1 million in annual revenues. For most states, no tax was due if the company in question doesn't have a presence within the state. Big online retailers like Amazon
(NASDAQ:AMZN) already pay sales taxes in several states.
Disclosure: Minyanville Studios, a division of Minyanville Media, has a business relationship with BlackBerry.
No positions in stocks mentioned.
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