Stocks Fall on Europe Fears (Bloomberg)
As Cyprus rejected an unpopular bank levy, fear about Europe’s debt crisis managed to increase, sending U.S. stocks down for the day. “Obviously the situation in Europe is not what we want it to be,” John Manley, chief equity strategist for Wells Fargo Advantage Funds in New York, said. “The next couple weeks will be more periods of chopping around. I don’t think it’s more than 2 to 4 percent in terms of risk on the market.” He continued, “The housing market does seem to be on a bit more steady ground and that helps U.S. consumer.”
Some Maunfacturers Shifting to Mexico (CNBC)
With China slowly increasing its costs, many manufacturers are looking towards the much closer Mexico to do the job and keep prices low. “When you look at total costs, you’re pretty much at parity,” says Robert Moser, president of Casabella, based in Congers, N.Y., which is moving some production from China to South of the border.
Cyprus Hullabaloo Lowers Euro (Reuters)
In addition to causing the aforementioned decline in U.S. stocks, the mere proposal of Cyprus’ bank levy has lowered the euro close to a four-month low against the dollar. “It leaves Pandora’s Box wide open,” said Mike Moran, senior currency strategist at Standard Chartered in New York. “If policymakers initially thought it was OK to tax depositors as heavily as they first suggested, one just doesn’t know what plan B or C might be. Unless we have a swift resolution, this will weigh on the outlook for the currency, and peripheral bond yields will come under pressure.”