Economy
Lingering Trade Concerns May Weigh on Wall Street
By Investors Hub
The major U.S. index futures are pointing to a lower opening on Tuesday, with stocks likely to move back to the downside after ending the previous session mostly higher.
Lingering trade concerns may weigh on the markets even after President Donald Trump announced a new trade deal between the U.S., Mexico, and Canada to replace the North American Free Trade Agreement.
Trump praised the new United States-Mexico-Canada Agreement as an ?historic transaction? but also said it is ?too early to talk? with China about the escalating trade dispute between the two countries.
?Can’t talk now because they’re not ready,? Trump said of China. ?Because they have been ripping us for so many years, it doesn’t happen that quickly.?
He added, ?If politically, people force it too quickly, you’re not going to make the right deal for our workers and for our country.?
Reports of the last-minute cancellation of U.S. Defense Secretary Jim Mattis? trip to China have added to the concerns about rising tensions.
After an early move to the upside, stocks gave back some ground over the course of the trading session on Monday. The major averages pulled back off their highs of the session, with the tech-heavy Nasdaq sliding into negative territory.
The major averages eventually ended the day mixed. While the Nasdaq edged down 9.05 points or 0.1 percent to 8,037.30, the Dow climbed 192.90 points or 0.7 percent to 26,651.21 and the S&P 500 rose 10.61 points or 0.4 percent to 2,924.59.
The initial strength on Wall Street came amid easing trade concerns after U.S. and Canadian officials agreed on a trade deal to replace the North American Free Trade Agreement shortly before a midnight deadline.
The new trade deal, called the United States-Mexico-Canada Agreement, or USMCA, will reportedly provide more market access to U.S. dairy farmers and effectively cap Canadian automobile exports to the U.S.
A joint statement by U.S. Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland said the agreement will “strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home.”
President Donald Trump, a harsh critic of NAFTA, also praised the USMCA as a “historic transaction” in a post on Twitter on Monday.
“It is a great deal for all three countries, solves the many deficiencies and mistakes in NAFTA, greatly opens markets to our Farmers and Manufacturers, reduces Trade Barriers to the U.S. and will bring all three Great Nations together in competition with the rest of the world,” Trump tweeted.
The leaders of the U.S., Canada, and Mexico are expected to sign the new agreement before the end of November, although it will still need to be approved by Congress.
However, the optimism about trade may have been partly offset by Trump’s subsequent remarks calling it “too early to talk” with China about a new trade agreement.
Traders largely shrugged off a report from the Institute for Supply Management showing a modest slowdown in the pace of growth in the U.S. manufacturing sector.
The ISM said its purchasing managers index fell to 59.8 in September from 61.3 in August, although a reading above 50 still indicates growth in the manufacturing sector. Economists had expected the index to edge down to 60.3.
The slightly bigger than expected decrease by the index came after it reached its highest level in over fourteen years in the previous month.
Energy stocks saw significant strength on the day, benefiting from a sharp increase by the price of crude oil. Reflecting the strength in the energy sector, the NYSE Arca Oil Index jumped by 1.8 percent and the Philadelphia Oil Service Index climbed by 1.3 percent.
Considerable strength was also visible among chemical stocks, as reflected by the 1.3 percent gain posted by the S&P Chemical Sector Index.
Praxair (PX) led the chemical sector higher after Chinese regulators approved the company’s proposed merger with Linde AG.
On the other hand, networking stocks came under pressure on the day, dragging the NYSE Arca Networking Index down by 2.5 percent.
By Adedapo Adesanya
The Organisation of the Petroleum Exporting Countries (OPEC) has once again trimmed its 2024 and 2025 oil demand growth forecasts.
The bloc made this in its latest monthly oil market report for December 2024.
The 2024 world oil demand growth forecast is now put at 1.61 million barrels per day from the previous 1.82 million barrels per day.
For 2025, OPEC says the world oil demand growth forecast is now at 1.45 million barrels per day, which is 900,000 barrels per day lower than the 1.54 million barrels per day earlier quoted.
On the changes, the group said that the downgrade for this year owes to more bearish data received in the third quarter of 2024 while the projections for next year relate to the potential impact that will arise from US tariffs.
The oil cartel had kept the 2024 outlook unchanged until August, a view it had first taken in July 2023.
OPEC and its wider group of allies known as OPEC+ earlier this month delayed its plan to start raising output until April 2025 against a backdrop of falling prices.
Eight OPEC+ member countries – Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman – decided to extend additional crude oil production cuts adopted in April 2023 and November 2023, due to weak demand and booming production outside the group.
In April 2023, these OPEC+ countries decided to reduce their oil production by over 1.65 million barrels per day as of May 2023 until the end of 2023. These production cuts were later extended to the end of 2024 and will now be extended until the end of December 2026.
In addition, in November 2023, these producers had agreed to voluntary output cuts totalling about 2.2 million barrels per day for the first quarter of 2024, in order to support prices and stabilise the market.
These additional production cuts were extended to the end of 2024 and will now be extended to the end of March 2025; they will then be gradually phased out on a monthly basis until the end of September 2026.
Members have made a series of deep output cuts since late 2022.
They are currently cutting output by a total of 5.86 million barrels per day, or about 5.7 per cent of global demand. Russia also announced plans to reduce its production by an extra 471,000 barrels per day in June 2024.
By Aduragbemi Omiyale
A minority equity stake in Chappal Energies Mauritius Limited has been acquired by a Nigerian energy firm, Aradel Holdings Plc.
This deal came a few days after Chappal Energies purchased a 53.85 per cent equity stake in Equinor Nigeria Energy Company Limited (ENEC).
Chappal Energies went into the deal with Equinor to take part in the oil and gas lease OML 128, including the unitised 20.21 per cent stake in the Agbami oil field, operated by Chevron.
Since production started in 2008, the Agbami field has produced more than one billion barrels of oil, creating value for Nigerian society and various stakeholders.
As part of the deal, Chappal will assume the operatorship of OML 129, which includes several significant prospects and undeveloped discoveries (Nnwa, Bilah and Sehki).
The Nnwa discovery is part of the giant Nnwa-Doro field, a major gas resource with significant potential to deliver value for Nigeria.
In a separate transaction, on July 17, 2024, Chappal and Total Energies sealed an SPA for the acquisition by Chappal of 10 per cent of the SPDC JV.
The relevant parties to this transaction are working towards closing out this transaction and Ministerial Approval and NNPC consent to accede to the Joint Operating Agreement have been obtained.
“This acquisition is in line with diversifying our asset base, deepening our gas competencies and gaining access to offshore basins using low-risk approaches.
“We recognise the strategic role of gas in Nigeria’s energy future and are happy to expand our equity holding in this critical resource.
“We are committed to the cause of developing the significant value inherent in the assets, which will be extremely beneficial to the country.
“Aradel hopes to bring its proven execution competencies to bear in supporting Chappal’s development of these opportunities,” the chief executive of Aradel Holdings, Mr Adegbite Falade, stated.
By Adedapo Adesanya
Afriland Properties Plc helped the NASD Over-the-Counter (OTC) Securities Exchange record a 0.04 per cent gain on Tuesday, December 10 as the share price of the property investment rose by 34 Kobo to N16.94 per unit from the preceding day’s N16.60 per unit.
As a result of this, the market capitalisation of the bourse went up by N380 million to remain relatively unchanged at N1.056 trillion like the previous trading day.
But the NASD Unlisted Security Index (NSI) closed higher at 3,014.36 points after it recorded an addition of 1.09 points to Monday’s closing value of 3,013.27 points.
The NASD OTC securities exchange recorded a price loser and it was Geo-Fluids Plc, which went down by 2 Kobo to close at N3.93 per share, in contrast to the preceding day’s N3.95 per share.
During the trading session, the volume of securities bought and sold by investors increased by 95.8 per cent to 2.4 million units from the 1.2 million securities traded in the preceding session.
However, the value of shares traded yesterday slumped by 3.7 per cent to N4.9 million from the N5.07 million recorded a day earlier, as the number of deals surged by 27.3 per cent to 14 deals from 11 deals.
Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units worth N5.3 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.
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