Cyprus deal could mean boom for U.S. stock market

bcb8mf Cyprus deal could mean boom for U.S. stock market

The last-ditch effort to save the banking system in Cyprus should bring a rally when U.S. stock markets open on Monday, according to several investment managers.Cyprus secured a 10 billion euro ($13 billion) package of rescue loans in tense, last-ditch negotiations early Monday, In return for the bailout, Cyprus’ second-biggest bank, Laiki, will be restructured, and holders of deposits exceeding 100,000 euros will have to take losses.It was unclear just how big of a hit big depositors will have to take, but the tax on deposits was expected to net several billion euros.U.S. investors won’t care too much about who takes losses in Cyprus, as long as there’s a bailout that stops the run on banks in the Mediterranean island nation and keeps the eurozone stable, said Karyn Cavanaugh, market strategist at ING Investment Management in New York.”If this works out, regardless of the terms, this is going to be good for the market,” she said Sunday night.Without a deal by Monday night, the tiny Mediterranean island nation of about 1 million would have faced the prospect of bankruptcy, which could have forced it to become the first country to abandon the euro currency. That precedent would have roiled markets and spurred turmoil across the entire eurozone.Continue Reading…

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Cyprus deal could mean boom for U.S. stock market


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