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Pre-Market Primer: Cyprus Has Until Monday to Find Funding


Stocks are mixed ahead of lots of US data.

Cyprus is still scrambling to put together a palatable bailout deal after members of Parliament rejected the old one because of its provision to tax bank deposits. The new plan will only tax deposits over 100,000 euros. This tax would be more squarely aimed at rich Russians that use Cyprus as a tax haven. The country is also seeking an alternative loan from Russia. Nationalizing pension funds of state companies is also on the table.

The European Central Bank Announced that it will continue to supply Cyprus with emergency liquidity assistance through Monday. If the country hasn't agreed to a bailout by then, the ECB will stop helping.

Jeroen Dijsselbloem, the Dutch finance minister that chaired the committee that designed the unpopular tax, warned members of the European Parliament that Cyprus is "definitely a systemic risk, and the unrest of the last couple of days have proved that, unfortunately." Dijsselbloem also said that it is fairer to only tax the ultra-rich non-residents.

After the Federal Reserve pledged yesterday to keep pumping money into the economy despite recent improvements, stocks are mixed in pre-market trading. Dow (INDEXDJX:.DJI) futures are up 0.09% at 14,421. S&P 500 (INDEXSP:.INX) futures sank 0.02% to 1,548.80 and Nasdaq (INDEXNASDAQ:.IXIC) futures fell 0.07% to 2,783.25.

Today is also packed with US economic data. Jobless claims in the US ticked up to 336,000 last week. The four-week moving average of claims for unemployment insurance fell to 339,750 from 346,750.

Later this morning, US flash manufacturing PMI is expected to cool by 0.2 points to 55. (PMI readings above 50 signal expansion.) The Federal Housing Finance Agency is expected to report that home prices rose 0.7% in January. Existing home sales for February is likely to have risen to a seasonally adjusted annualized rate of 5.01 million from 4.92 million.

European shares declined today on the turmoil in Cyprus and lousy economic data. Markit's flash eurozone services and manufacturing PMI showed yet another sign of downturn. The indicator fell to 46.5 this month from 47.9. The index shows that the region's economy is falling faster than economists believed. Germany's growth slowed to 51 from 53.3 and France dropped to a 41.9, its worst reading since 2009.

Asian shares advanced overnight. Despite news that Japanese trade deficit increased, the Nikkei (INDEXNIKKEI:.NI225) rose 1.34% to its highest level in over four years. Investors are expecting more aggressive easing from the new Bank of Japan head who held a press conference outlining his plans as he took his seat today. Japan's exports fell 2.9% on a yearly basis in February, falling short of expectations of a rise. Imports were 11.9% higher year over year. HSBC's China flash manufacturing PMI blew past expectations to a two-month high of 51.7 from 50.4 last month.

In corporate news, Oracle (NASDAQ:ORCL) shares fell 7.65% after missing earnings expectations. The enterprise software company earned $0.65 per share excluding some items on sales of $8.97 billion in the fiscal third quarter. Sales fell short as corporate customers transition to cloud-based solutions and buy fewer products. President Safra Katz blamed the salespeople for the weak outcome.

Yahoo (NASDAQ:YHOO) advanced 1.61% after Oppenheimer analysts upgraded the shares to outperform. They said that they were optimistic about a possible offering and the value of Yahoo Japan shares that the company owns.

Google's (NASDAQ:GOOG) YouTube passed 1 billion monthly unique visitors.

Twitter: @vincent_trivett
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