Economy
Trade, Geopolitical Concerns May Lead to Pullback on Wall Street
By Investors Hub
The major U.S. index futures are pointing to a lower opening on Thursday following the rebound seen over the course of the previous session.
Lingering trade concerns may weigh on the markets following President Donald Trump?s recent comments downplaying expectations for a trade deal with China.
Potentially adding to the trade concerns, Commerce Secretary Wilbur Ross has initiated an investigation into whether imports of automobiles and parts threaten to impair U.S. national security.
?There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry,? Ross said in a statement.
He added, ?The Department of Commerce will conduct a thorough, fair, and transparent investigation into whether such imports are weakening our internal economy and may impair the national security.?
Continued uncertainty about the planned meeting between Trump and North Korean leader Kim Jong Un may also generate some selling pressure.
North Korean vice foreign minister Choe Son-hui raised the possibility of canceling the historic summit following what she called ?ignorant and stupid? comments by Vice President Mike Pence.
?Whether the U.S. will meet us at a meeting room or encounter us at nuclear-to-nuclear showdown is entirely dependent upon the decision and behavior of the United States,? Choe said, according to the state-run Korean Central News Agency.
She added, ?In case the U.S. offends against our goodwill and clings to unlawful and outrageous acts, I will put forward a suggestion to our supreme leadership for reconsidering the DPRK-U.S. summit.?
Stocks showed a notable turnaround over the course of the trading day on Wednesday after coming under pressure early in the session. The major averages climbed into positive territory following the release of the minutes of the latest Federal Reserve meeting.
The major averages ended the day just off their highs of the session. The Dow edged up 52.40 points or 0.2 percent to 24,886.81, the Nasdaq climbed 47.50 points or 0.6 percent to 7,425.96 and the S&P 500 rose 8.85 points or 0.3 percent to 2,733.29.
The upward move seen late in the session came as the minutes of the Fed’s monetary policy meeting earlier this month were seen as dovish.
The minutes showed some uncertainty about the outlook for inflation, with some questioning whether the rate of inflation will be sustained at the Fed’s 2 percent target.
Others noted a temporary period of inflation modestly above 2 percent would be consistent with the Fed’s symmetric inflation objective.
“While the economy is generally viewed as being strong by just about everyone, there remains uncertainty about inflation and therefore the path of interest rates,” said Joel L. Naroff, President and Chief Economist at Naroff Economic Advisors.
“The inflation hawks on the Fed seem to be outnumbered, at least right now, by the doves,” he added. “That does not mean there will not be a rate hike in June.”
The minutes said participants generally agreed with the assessment that continuing to raise interest rates gradually would likely be appropriate if the economy evolves about as expected.
“So, expect a hike in June,” Naroff said. “And if inflation continues to accelerate as the economy grows more strongly, additional increases this year are likely.”
On the U.S. economic front, the Commerce Department released a report showing a pullback in new home sales in the month of April.
The report said new home sales fell by 1.5 percent to an annual rate of 662,000 in April after jumping by 2 percent to a revised rate of 672,000 in March.
Economists had expected new home sales to drop to a rate of 679,000 from the 694,000 originally reported for the previous month.
The weakness seen earlier in the session partly reflected a negative reaction to earnings news from retail giant Target (TGT).
Shares of Target slumped by 5.7 percent after the company reported first quarter results that missed analyst estimates on both the top and bottom lines.
Gold stocks moved notably higher over the course of the session, driving the NYSE Arca Gold Bugs Index up by 1.5 percent. The index rebounded after ending the previous session at its lowest closing level in well over a month.
The strength among gold stocks came as the price of the precious metal turned positive in electronic trading.
Considerable strength also emerged among retail stocks, as reflected by the 1.2 percent gain posted by the Dow Jones Retail Index. With the gain, the index reached its best closing level in well over three months.
Tobacco, real estate, and utilities stocks also moved to the upside, while significant weakness remained visible among steel and telecom stocks.
By Adedapo Adesanya
Okitipupa Plc was the sole price gainer at the NASD Over-the-Counter (OTC) Securities Exchange on Friday, August 7, lifting the trading platform by 0.44 per cent at the close of transactions.
The share price of the palm oil producer appreciated during the trading session by N25.00 or 9.0 per cent to N277.00 per unit compared with the previous day’s N252.00 per unit.
As a result, the market capitalisation gained N12.29 billion to close at N2,807 trillion, in contrast to the previous session’s N2.795 trillion, while the NASD Security Index (NSI) added 93.63 points to finish at 4,678.08 points compared with Thursday’s 4,657.59 points.
The bourse recorded a price loser yesterday, and this was Mass Telecoms Innovation Plc, which crashed by 3 Kobo or 9.4 per cent to settle at 32 Kobo per share versus the previous day’s 35 Kobo per share.
The volume of securities traded by investors plunged by 81.5 per cent to 535,7560 units from 2.9 million units, the value of securities slumped by 93.9 per cent to N6.0 million from N99.2 million, and the number of deals decreased by 41.9 per cent to 36 deals from 62 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units transacted for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 77.0 million units exchanged for N5.5 billion.
GNI Plc also ended the day as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, trailed by Infracredit Plc with 2.3 billion units valued at N6.5 billion, and Resourcery Plc with 1.1 billion units sold for N415.7 million.
By Dipo Olowookere
A 0.15 per cent growth was achieved by the Nigerian Exchange (NGX) Limited, driven by continued buying interest in banking stocks such as First Holdco and others.
The banking index was up by 1.53 per cent during the session, offsetting the losses recorded by the others. The industrial goods segment fell by 0.37 per cent, the insurance counter shrank by 0.21 per cent, and the energy sector contracted by 0.04 per cent, while the consumer goods space closed flat.
At the close of business, the All-Share Index (ASI) moved up by 364.26 points to 245,573.60 points from 245,209.34 points, and the market capitalisation increased by N235 billion to N158.513 trillion from N158.278 trillion.
Despite the gains printed by Customs Street during the trading day, investor sentiment was weak, as there were 22 price gainers and 24 price losers, indicating a negative market breadth index.
UPDC surged by 9.23 per cent to N3.55, CWG soared by 6.56 per cent to N19.50, AXA Mansard appreciated by 4.80 per cent to N13.10, Neimeth advanced by 4.24 per cent to N8.60, and Cutix improved by 4.00 per cent to N2.60.
Conversely, Red Star Express lost 10.00 per cent to trade at N18.00, CAP declined by 9.98 per cent to N115.45, John Holt shrank by 9.82 per cent to N10.10, ABC Transport depreciated by 9.57 per cent to N5.20, and Legend Internet crashed by 8.70 per cent to N4.20.
A total of 1.5 billion equities worth N26.7 billion exchanged hands in 42,580 deals on Friday versus the 531.8 million equities valued at N20.5 billion traded in 44,826 deals on Thursday, representing a spike in the trading volume, value, and number of deals by 182.06 per cent, 30.24 per cent, and 5.01 per cent, respectively.
The busiest stock during the session was Fortis Global Insurance, with a turnover of 824.5 million units valued at N2.1 billion, FCMB traded 217.9 million units worth N2.8 billion, Access Holdings exchanged 176.2 million units for N4.7 billion, Chams sold 32.5 million units worth N132.1 million, and First Holdco transacted 25.0 million units valued at N3.7 billion.
By Adedapo Adesanya
The Naira further closed south against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, August 7, by 81 Kobo or 0.06 per cent to N1,365.69/$1 from N1,364.88/$1.
It was a similar situation for the Nigerian Naira in the official market during the session as against the Pound Sterling; it lost N1.08 to quote at N1,839.17 versus the previous day’s N1,838.09/£1, and against the Euro, it slipped by N1.23 to close at N1,575.73/€1, in contrast to the preceding session’s N1,574.80/€1.
Further, at the GTBank forex counter, the Nigerian currency weakened against the Dollar yesterday by N2 to settle at N1,371/$1 compared with Thursday’s N1,369/$1, and at the black market, it traded flat at N1,400/$1.
The country’s legal tender came under FX demand pressure on Friday, with turnover rising by 304.3 per cent to $399.5 million from $98.8 million the previous day, with the number of deals slightly up to 107 from 106.
Next week, traders expect the Naira to hold steady, buoyed by dollar sales by the Central Bank of Nigeria (CBN), whose presence in the market could help ease demand pressure.
As for the cryptocurrency market, Bitcoin (BTC) neared the $65,000-mark after it gained 0.8 per cent to trade at $64,968.05, as investors took advantage of recent drops to shore up their holdings.
Previously, the decision by the US Senate to delay a vote on the Crypto Clarity Act until at least September weakened the outlook. The bill, which would set out which US regulator oversees which digital assets, needs 60 votes to pass and it is unclear whether it currently has 50.
Solana (SOL) grew by 2.5 per cent to $74.81, Dogecoin (DOGE) rose by 1.3 per cent to $0.0702, Binance Coin (BNB) jumped by 1.1 per cent to $593.80, Ethereum (ETH) expanded by 0.5 per cent to $1,916.08, Ripple (XRP) also soared by 0.5 per cent to $1.03, and TRON (TRX) appreciated by 0.2 per cent to $0.3275.
However, Cardano (ADA) depreciated by 1.0 per cent to $0.1997, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
