Stocks: Eyes on Cyprus
POSTED: Sunday, March 24, 2013 - 8:00pm
UPDATED: Sunday, March 24, 2013 - 8:04pm
NEW YORK (CNNMoney) — All eyes will be on Cyprus in the final week of the first quarter, as investors wait to see how the financial crisis in the tiny island nation is resolved and if it could set a precedent for other troubled European nations in the future.
U.S. markets will be closed on Friday in observance of Good Friday.
Negotiations between Cyprus and its would-be bailout partners in the European Union and International Monetary Fund continued through the weekend. Banks remained closed in the beleaguered nation, and are expected to open after a 10-day hiatus on Tuesday.
Cyprus needs to find a way to raise nearly €6 billion to satisfy the conditions of a €10 billion EU rescue or face economic meltdown.
After much debate, the Cyprus parliament passed bills late Friday to nationalize pension assets and impose strict limits on the movement of capital. The government has yet to resolve one of the most controversial parts of the bailout plan -- a tax on bank deposits.
While much focus will be on Europe, a smattering of data this week will update investors on the state of the U.S. economy.
News of improvements in the housing market could be further bolstered this week with from the Case Shiller 20-city index, new and pending home sales and the MBA mortgage index.
Last week, reports showed that previously owned homes sold at the strongest pace in more than three years. The housing market has been bolstered by a drop in foreclosures and near record low mortgage rates. A decline in the nation's unemployment rate has also given the market a boost.
Investors will know if a better real estate market has translated to Americans feeling good about the nation's economic health. Consumer confidence, personal income and spending and Michigan sentiment will be released this week.
These reports will be closely watched, as they will shed light on whether consumers have pulled back as a result of the payroll tax and a delay in tax refunds.
A third estimate of U.S. gross domestic product in the fourth quarter will also be released this week. Economists surveyed by Briefing.com expect that the U.S. economy expanded by 0.3% in the last three months of 2012.
This would be a change from two earlier estimates. Last month, the Commerce Department reported that GDP, the broadest measure of the nation's economic growth, grew at an annual rate of 0.1% in the fourth quarter, after initially reporting that the economy contracted 0.1% in the period.
Last week, the Dow Industrial Average, S&P 500 and Nasdaq ended the week down a little less than 0.5%. All three indexes are up between 7% and 11% so far in 2013.