Cyprus NO Vote Chills Stocks

Index ETFs continued to cool today as the Cyprus Parliament again delayed and then voted NO to the €5.8 billion bank levy scheme demanded by the Eurozone. The SPDR Dow Jones Industrial Average ETF (DIA) added just .09%, the SPDR S&P 500 ETF (SPY) declined .23%, the PowerShares QQQ Trust Series 1 ETF (QQQ) declined .19%, and the iShares Russell 2000 Index ETF (IWM) lost .42%.

So, the Parliament of Cyprus has voted NO to pass the bank levy ultimatum as mandated by the Eurozone, which would require a 7% haircut on all bank accounts on the island in return for stock in those banks. With the final outcome in Cyprus still an unknown for now, the “NO” vote by the Cyprus Parliament today will likely send the global economic scheme into a frenzy of “what’s next” and “what can we do about it,” tomorrow. At any rate, the battle for Cyprus wealth and assets continues, and today is just another chapter in the long, terrible saga of the Eurozone debt crisis. And, as much as we may not like to admit it, US markets will likely react in a negative way if the Cyprus mess does not get cleaned up soon.

On a semi brighter note, today’s February Housing Starts Report released by the Commerce Department indicated an uptick in housing starts by .8%, while the Home Builders Index declined by two points.

Bottom Line: Cyprus is center stage and ready to rock and roll the world economic system. With the bailout of Cyprus now uncertain after their “no” vote today, we literally have no idea what the next few days will bring, but it will likely not be good.

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