Economy
Trade War Once Again in Focus on Wall Street
By Investors Hub
The major U.S. index futures are pointing to a lower opening on Friday, with stocks likely to extend the pullback seen in the previous session.
Renewed trade war concerns may weigh on the markets after President Donald Trump indicated a willingness to impose tariffs on all Chinese imports to the U.S.
“I’m ready to go to 500,” Trump said in an interview with CNBC that aired this morning, apparently referring to the $505.5 billion of Chinese imports to the U.S. in 2017.
“I?’ not doing this for politics, I’m doing this to do the right thing for our country,” Trump said. “We have been ripped off by China for a long time.”
The Trump administration previously imposed tariffs of $34 billion worth of Chinese imports and has threatened to impose tariffs on another $200 billion worth of goods.
Trump argued the strength in the stock market since his election has allowed him to be more aggressive on trade, claiming, ?We?re playing with the bank?s money.”
Stocks moved mostly lower during trading on Thursday, giving back some ground after trending higher over the past several sessions. The major averages moved to the downside early in the session and remained stuck in the red throughout the day.
The major averages ended the day firmly in negative territory. The Dow slid 134.79 points or 0.5 percent to 25,064.50, the Nasdaq fell 29.15 points or 0.4 percent to 7,825.30 and the S&P 500 dropped 11.13 points or 0.4 percent to 2,804.49.
Profit taking contributed to the pullback on Wall Street, as some traders cashed in on the upward move seen in recent sessions.
Recent strength in the markets lifted the Nasdaq to a record closing high on Tuesday, while the S&P 500 ended the previous session at its best closing level in over five months. The Dow also reached a monthly closing high.
A negative reaction to disappointing earnings news from several big-name companies also weighed on the markets on the day.
Shares of eBay (EBAY) moved sharply lower after the e-commerce giant reported better than expected second quarter earnings but provided disappointing full-year guidance.
Insurance giant Travelers (TRV) also came under pressure after reporting second quarter earnings below analyst estimates.
Shares of American Express (AXP) also moved to the downside after the credit card giant reported second quarter earnings that beat expectations but on weaker than expected revenues.
On the other hand, shares of IBM Corp. (IBM) jumped after the tech giant reported second quarter results that exceeded analyst estimates on both the top and bottom lines.
Traders were also reacting to comments by President Donald Trump, who said in an excerpt of an interview with CNBC that he is “not thrilled” with interest rate hikes by the Fed.
“I’m not thrilled,” Trump said in the interview set to air in full on Friday. “Because we go up and every time you go up they want to raise rates again. I don’t really ? I am not happy about it.”
At the same time, Trump noted he is letting the Fed do “what they feel is best,” and a subsequent statement from the White House said the president respects the independence of the central bank.
Meanwhile, traders largely shrugged off a report from the Labor Department showing initial jobless claims unexpectedly dropped to their lowest level in almost five decades in the week ended July 14th.
The Labor Department said initial jobless claims fell to 207,000, a decrease of 8,000 from the previous week’s revised level of 215,000. Economists had expected jobless claims to inch up to 220,000.
With the unexpected decrease, jobless claims dropped to their lowest level since hitting 202,000 in December of 1969.
A separate report from the Conference Board also showed a slightly bigger than expected increase by its index of leading U.S. economic indicators in the month of June.
Steel stocks turned in some of the market’s worst performances on the day after moving sharply higher over the two previous sessions. Reflecting the weakness in the sector, the NYSE Arca Steel Index slumped by 2 percent.
Considerable weakness was also visible among financial stocks, with the NYSE Arca Broker/Dealer Index and the KBW Bank Index both falling by 1.4 percent.
Pharmaceutical, telecom, and gold stocks also moved notably lower, while natural gas, real estate, and housing stocks moved to the upside.
By Dipo Olowookere
A 1.08 per cent growth was further printed by the Nigerian Exchange (NGX) Limited on Friday on improved appetite for Nigerian stocks.
Data showed that the insurance sector lost 0.61 per cent yesterday due to profit-taking as the energy space gave up 0.08 per cent, while the commodity counter closed flat.
However, the industrial goods landscape appreciated by 2.06 per cent, the banking index improved by 1.31 per cent, and the consumer goods sector expanded by 0.83 per cent.
At the close of business on Customs Street, the All-Share Index (ASI) increased by 1,563.92 points to 147,040.07 points from 145,476.15 points and the market capitalisation went up by N996 billion to N93.722 trillion from N92.726 trillion.
UAC Nigeria led the advancers’ log yesterday after it grew by 10.00 per cent to N96.80, Transcorp Hotels jumped by 9.71 per cent to N172.80, Royal Exchange appreciated by 8.89 per cent to N1.96, Ikeja Hotel soared by 8.74 per cent to N31.10, and Veritas Kapital leapt by 8.07 per cent to N1.74.
On the flip side, Union Dicon declined by 10.00 per cent to N6.30, ABC Transport slipped by 9.88 per cent to N3.10, AXA Mansard depreciated by 7.19 per cent to N12.90, FTN Cocoa lost 4.62 per cent to trade at N4.75, and Guinea Insurance dropped 3.36 per cent to finish at N1.15.
A total of 38 stocks ended on the gainers’ table and 17 stocks finished on the losers’ table, representing a positive market breadth index and strong investor sentiment.
Traders transacted 361.6 million equities for N14.8 billion in 21,051 deals yesterday versus the 1.9 billion equities worth N19.2 billion traded in 23,369 deals a day earlier, showing a decline in the trading volume, value, and number of deals by 80.97 per cent, 22.92 per cent, and 14.20 per cent, respectively.
The busiest stock for the session was Zenith Bank with 59.5 million units worth N3.6 billion, Access Holdings traded 46.1 million units valued at N973.0 million, Fidelity Bank exchanged 29.4 million units for N560.4 million, FCMB transacted 27.9 million units worth N293.9 million, and Tantalizers sold 13.0 million units valued at N29.8 million.
By Adedapo Adesanya
Energy stocks influenced the 4.76 per cent loss recorded by the NASD Over-the-Counter (OTC) Securities Exchange on Friday, December 5.
The culprits were the duo of 11 Plc and Nipco Plc,with the former shedding N32.17 to end at N291.83 per share compared with the previous day’s N324.00 per share, and the latter down by N21.00 to sell at N195.00 per unit versus the previous session’s N216.00 per unit.
Consequently, the NASD Unlisted Security Index (NSI) slumped by 170.16 points to 3,401.37 points from 3,571.53 points and the market capitalisation lost N101.81 billion to close at N2.035 billion from the N2.136 trillion quoted in the preceding session.
The OTC securities exchange suffered the decline yesterday despite the share prices of three companies closing green.
Central Securities Clearing System (CSCS) Plc was up by N1.80 to close at N39.80 per share compared with Thursday’s price of N38.00 per share, Air Liquide Plc appreciated by N1.09 to N11.99 per unit from N10.90 per unit, and FrieslandCampina Wamco Nigeria Plc grew by 78 Kobo to N56.57 per share from N55.79 per share.
During the session, the volume of transactions rose by 6,885.3 per cent to 18.2 million units from 4.3 million units, the value of transactions ballooned by 10,301.7 per cent to N389.7 million from N347.2 million, but the number of deals declined by 29.7 per cent to 26 deals from 37 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc ended the day as the most traded stock by value on a year-to-date basis with 5.8 billion units worth N16.4 billion, followed by Okitipupa Plc with 170.4 million units valued at N8.0 billion, and Air Liquide Plc with 507.5 million units worth N4.2 billion.
InfraCredit Plc also finished the day as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units worth N524.9 million.
By Adedapo Adesanya
The Naira depreciated further against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, December 5, as FX demand pressure mounts.
The Nigerian currency lost N2.60 or 0.18 per cent against the greenback to close at N1,450.43/$1 compared with the previous day’s N1,447.83/$1.
Equally, the domestic currency declined against the Pound Sterling in the official forex market during the session by N4.48 to trade at N1,935.45/£1, in contrast to Thursday’s closing price of N1,930.97/£1 and shrank against the Euro by 43 Kobo to end at N1,689.17/€1 versus the preceding session’s rate of N1,688.74/€1.
Similarly, the local currency performed badly against the US Dollar at the GTBank FX counter by N2 to close at N1,455/$1 versus Thursday’s N1,453/$1 but traded flat at the parallel market at N14.65/$1.
As the country gets into the festive period, pressure mounted on the local currency reflecting higher foreign payments and lower FX inflows.
However, there are expectations that the Nigerian currency will be stable, supported by interventions by to the Central Bank of Nigeria (CBN) in the face of steady dollar Demand and inflows from Detty December festivities that will give the Naira a boost after it depreciated mildly last month.
Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450/$1 next week, buoyed by improved FX interventions by the apex bank.
As for the crypto market, it was down yesterday due to profit-taking associated with year-end trading. However, the December 1-Year Consumer Inflation Expectation by the University of Michigan fell to 4.1 per cent from 4.5 per cent previously and 4.5 per cent expected. The 5-Year Consumer Inflation Expectation fell to 3.2 per cent from 3.4 per cent previously and 3.4 per cent expected.
With the dearth of official economic data of late, these private surveys have taken on a new level of significance and the market banks of them to make decisions.
Cardano (ADA) depreciated by 5.7 per cent to $0.4142, Dogecoin (DOGE) slid by 5.1 per cent to $0.1394, Ethereum (ETH) dropped by 3.9 per cent to $3,039.75, Solana (SOL) declined by 3.8 per cent to $133.24, and Litecoin (LTC) fell by 3.7 per cent to $80.59.
Further, Bitcoin (BTC) went down by 2.6 per cent to sell at $89,683.72, Binance Coin (BNB) slumped by 2.2 per cent to $883.59, and Ripple (XRP) shrank by 2.1 per cent to $2.04, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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