Economy
US Stocks May Show Lack of Direction After Tuesday’s Sell-Off
By Investors Hub
The major U.S. index futures are pointing to a mixed opening on Wednesday following the sell-off seen in the previous session. While the Dow futures are up by 18 points, the Nasdaq futures dare own by 7.5 points.
The futures came under pressure early this morning as the yield on the benchmark ten-year note climbed more firmly above 3 percent.
The ten-year yield rose above 3 percent for first time since early 2014 in intraday trading on Tuesday before giving back ground.
Concerns rising inflation may lead the Federal Reserve to hike interest rates faster than previously expected have recently pushed yields higher.
Nonetheless, the futures significantly pared their losses following the release of quarterly results from aerospace giant Boeing (BA).
Boeing reported first quarter results that beat analyst estimates on both the top and bottom lines and raised its full-year guidance.
Overall trading activity may be somewhat subdued, however, as a lack of major U.S. economic data may keep some traders on the sidelines.
After failing to sustain an initial upward move, stocks moved sharply lower over the course of the trading session on Tuesday. With the pullback on the day, the Dow closed lower for the fifth consecutive session.
The major averages climbed off their worst levels in late-day trading but remained firmly negative. The Dow tumbled 424.56 points or 1.7 percent to 24,024.13, the Nasdaq plunged 121.25 points or 1.7 percent to 7,007.35 and the S&P 500 slumped 35.73 points or 1.3 percent to 2,634.56.
The sell-off on Wall Street came as traders shrugged off an initial positive reaction to earnings news from several big-name companies.
Shares of Caterpillar (CAT) showed a notable downturn after the heavy equipment maker reported better than expected first quarter results but executives said the quarter would be the “high watermark for the year.”
Conglomerate 3M Corp. (MMM) also showed a significant move to the downside after reporting first quarter earnings that matched estimates but lowering its full-year guidance.
Shares of Google parent Alphabet (GOOGL), Travelers (TRV) and Coca-Cola (KO) also moved lower after the companies reported their quarterly results.
Selling pressure may also have been generated by a continued increase in U.S. treasury yields, with the yield on the benchmark ten-year note climbing above 3 percent for the first time since early 2014.
The increase in treasury yields came following the release of some upbeat economic data, including a report from the Commerce Department showing a bigger than expected increase in new home sales in the month of March.
The report said new home sales soared by 4.0 percent to an annual rate of 694,000 in March after surging up by 3.6 percent to a revised rate of 667,000 in February. Economists had expected new home sales to climb by 1.9 percent.
With the bigger than expected increase, new home sales rose to their highest annual rate since hitting 711,000 last November. New home sales were up by 8.8 percent year-over-year.
A separate report from the Conference Board showed an unexpected improvement in consumer confidence in the month of April.
The Conference Board said its consumer confidence index rose to 128.7 in April from a revised 127.0 in March. Economists had expected the index to dip to 126.1.
Chemical stocks moved sharply lower over the course of the trading session, dragging the S&P Chemical Sector Index down by 2.5 percent.
DowDuPont (DWDP), Ingevity (NVGT) and Huntsman (HUN) turned in some of the chemical sector’s worst performances on the day.
Significant weakness also emerged among transportation stocks, as reflected by the 2.1 percent slump by the Dow Jones Transportation Average.
Retail, biotechnology, housing, and tobacco stocks also saw considerable weakness, while gold stocks bucked the downtrend amid an increase by the price of the precious metal.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed higher by 1.41 per cent on Friday, May 15, supported by four securities on the platform.
During the session, FrieslandCampina Wamco Plc added N14.24 to its share price to sell for N159.00 per unit, in contrast to the previous day’s N144.76 per unit.
Further, Central Securities and Clearing System (CSCS) Plc appreciated by N1.34 to N72.34 per share from N71.00 per share, Geo-Fluids Plc improved its price by 4 Kobo to N2.94 per unit from N2.90 per unit, and Industrial and General Insurance (IGI) Plc gained 1 Kobo to trade at 61 Kobo per share compared with Thursday’s closing price of 60 Kobo per share.
As a result, the NASD Unlisted Security Index (NSI) rose by 58.20 points to 4,188.41 points from 4,130.21 points, and the market capitalisation soared by N34.82 billion to N2.506 trillion from N2.471 trillion on Thursday.
During the session, the volume of trades went up by 180.8 per cent to 1.2 million units from 417,349 units, and the value of transactions increased by 29.8 per cent to N29.8 million from N23.2 million, while the number of deals fell by 22.6 per cent to 24 deals from 31 deals.
Great Nigeria Insurance (GNI) Plc ended the day as the most traded stock by value on a year-to-date basis with 3.4 billion units sold for N8.4 billion, followed by CSCS Plc with 60.8 million units exchanged for N4.1 billion, and Okitipupa Plc with 27.9 million units valued at N1.9 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by Resourcery Plc with 1.1 billion units transacted for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units traded for N1.2 billion.
By Dipo Olowookere
The bears overpowered the Nigerian Exchange (NGX) Limited on Friday, sinking it further by 0.76 per cent when the closing gong was struck by 4 pm.
The nation’s flagship equity market was under selling pressure during the session, as investors booked profits after the shares witnessed price appreciation in the past trading sessions.
The energy sector was the most impacted, as it shed 4.43 per cent. The consumer goods index declined by 0.90 per cent, the banking counter decreased by 0.15 per cent, and the industrial goods sector lost 0.08 per cent, while the insurance counter gained 2.42 per cent, which was not enough to salvage the situation.
Consequently, the All-Share Index (ASI) contracted by 1,912.19 points to 250,330.92 points from 252,243.11 points, and the market capitalisation moderated by 1.225 trillion to N160.444 trillion from N161.669 trillion.
Zichis was the worst-performing stock for the session after it gave up 9.97 per cent to close at N29.43, FTN Cocoa slipped by 9.95 per cent to N8.96, The Initiates slumped by 9.90 per cent to N32.30, LivingTrust Mortgage Bank tumbled by 9.88 per cent to N3.83, and International Energy Insurance dropped 9.71 per cent to trade at N2.79.
The best-performing stock was ABC Transport, which grew by 10.00 per cent to N6.27. May and Baker also appreciated by 10.00 per cent to N47.30, SCOA Nigeria surged by 9.98 per cent to N33.05, Trans-Nationwide Express expanded by 9.97 per cent to N7.06, and DAAR Communications jumped 9.76 per cent to N2.25.
Yesterday, investors traded 1.1 billion shares worth N44.3 billion in 65,744 deals compared with the 1.0 billion shares valued at N41.6 billion transacted in 74,822 deals a day earlier. This indicated a dip in the number of deals by 12.13 per cent, and a rise in the trading volume and value by 10.00 per cent and 6.49 per cent, respectively.
Chams was the busiest equity for the day, with 328.5 million units sold for N1.1 billion. UBA traded 61.6 million units worth N2.7 billion, First Holdco transacted 58.7 million units valued at N4.2 billion, Secure Electronic Technology exchanged 51.9 million units worth N45.0 million, and Access Holdings traded 51.8 million units valued at N1.3 billion.
By Adedapo Adesanya
The last trading session of the week at the Nigerian Autonomous Foreign Exchange Market (NAFEX) ended on a negative note for the Naira on Friday, May 15, as it lost N15 Kobo or 0.1 per cent against the Dollar to trade at N1,371.04/$1 compared with the previous day’s N1,370.89/$1.
However, it further appreciated against the Pound Sterling in the same market segment yesterday by N20.77 to close at N1,830.61/£1 versus Thursday’s value of N1,851.38/£1, and gained N7.91 against the Euro to settle at N1,595.07/€1 versus N1,602.98/€1.
At the GTBank FX desk, the Naira lost N2 against the US Dollar during the session to sell at N1,383/$1 compared with the preceding session’s N1,381/$1, and at the black market, it remained unchanged at N1,385/$1.
The Naira is forecast to be broadly stable, supported by Dollar sales by the Central Bank of Nigeria (CBN) amid steady, higher oil receipts, with the market settling into a balance.
Policy direction is also expected to give the market some boost as the CBN said the new edition of the FX market guidelines will deepen liquidity, improve transparency and strengthen confidence in the country’s foreign exchange market.
According to the Governor of the CBN, Mr Yemi Cardoso, the update is due to changing global economic realities, domestic reforms and the need for a more coherent and forward-looking regulatory framework. According to him, the last edition of the FX manual was issued in 2018, making the latest review both timely and necessary.
Meanwhile, the cryptocurrency market plunged into the red zone as rising bond yields hit risk assets across markets, while traders are increasingly betting the Federal Reserve may need to raise rates again. Rising energy prices and resurging inflation could force central banks back into tightening mode.
Cardano (ADA) shrank by 4.4 per cent to $0.2557, Dogecoin (DOGE) slid by 3.7 per cent to $0.1104, Ripple (XRP) depreciated by 3.5 per cent to $1.41, Solana (SOL) crashed by 3.5 per cent to $87.81, and Binance Coin (BNB) slumped by 3.4 per cent to $659.64.
Further, Bitcoin (BTC) declined by 2.6 per cent to $78,547.49, Ethereum (ETH) lost 2.1 per cent to quote at $2,209.19, and TRON (TRX) tumbled by 0.7 per cent to $0.3509, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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