Will Cyprus and Congress
slow down the market?
Markets finally snapped their winning streak on concerns of
Eurozone trouble with Cyprus. Despite the early sell-off, markets rose later in
the week to erase most of the losses. For the week, the S&P500 lost 0.24%,
the Dow slid just 0.01%, and the Nasdaq trimmed 0.13%.[i]
Equities began the week with a broad sell-off amid news
surrounding Cyprus Cyprus
was able to avert a disorderly default (and probable Euro exit), appropriating
funds from uninsured depositors, including wealthy Russians, will have
far-reaching consequences for Cyprus
On the home front, Congress finally ended the threat of government
shutdown by approving a bill funding the government through the end of 2013.
While sequestration cuts are still ongoing, the bill will ease some of the pain
of mandatory cuts.[iii] On
a related note, senators approved a non-binding $3.7 trillion 2014 budget
agreement late last week during a marathon voting session that lasted until the
early hours of Saturday morning. In stark contrast to the House budget, which
slashed government spending, the Senate budget increased government spending
while simultaneously increasing taxes on the wealthy. In some years, House and
Senate budgets are reconciled, but that is not likely to happen this year due
to the politically charged nature of the debate.[iv]
Regardless of what happens
far away in a country like Cyprus ,
or here at home in the U.S.
ECONOMIC CALENDAR:
Monday: Dallas
Tuesday: Durable
Goods Orders, S&P Case-Shiller HPI, New Home Sales, Consumer Confidence
Wednesday: Pending
Home Sales Index, EIA Petroleum Status Report
Thursday: GDP,
Jobless Claims, Chicago PMI
Friday: Personal
Income and Outlays, Consumer Sentiment
HEADLINES:
Housing starts made a partial comeback after
their drop in February. Even better, housing
permits jumped, indicating that builders are ramping up production this year.[v] Sales of existing homes also grew slightly in February, and sales
numbers for January were revised upwards, showing that the positive trend is holding
across the industry. The supply of available housing also increased as higher
prices are bringing more homes onto the market.[vi]
Manufacturing growth picks up in March. After solid February numbers, manufacturing growth and the pace of
hiring increased in March, indicating that the sector is still contributing to
economic growth.[vii]
Oil prices rose last week. Oil
traders took advantage of early weakness in oil prices and got back in, causing
oil prices to rise to $93.71. Domestic gasoline prices averaged $3.69 across the country, 19 cents cheaper
than the same period last year.[viii]
QUOTE OF THE WEEK:
“The only way of
finding the limits of the possible is by going beyond them into the impossible.” - Arthur C. Clarke
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