Economy

Strong Job Growth Dampens Hopes for Interest Rate Cut

Published

7 years ago

05/07/2019

By Investors Hub

The major U.S. index futures are currently pointing to a lower opening on Friday as trading is set to resume following the Independence Day holiday on Thursday.

Stock futures came under pressure following the release of a Labor Department showing a substantial reacceleration in the pace of U.S. job growth in the month of June.

The report said employment surged up by 224,000 jobs in June after edging up by a downwardly revised 72,000 jobs in May. Economists had expected employment to increase by about 160,000 jobs.

While the data points to a rebound in the labor market following the weakness seen in May, the report has dampened investor hopes for a near-term interest rate cut by the Federal Reserve.

Stocks showed a strong move to the upside over the course of a holiday-shortened trading session on Wednesday. With the upward move, the major averages added to the modest gains posted on Tuesday to reach new record closing highs.

The major averages ended the session at their best levels of the day. The Dow jumped 179.32 points or 0.7 percent to 8,170.23, the Nasdaq advanced 61.14 points or 0.8 percent to 8,170.23 and the S&P 500 climbed 22.81 points or 0.8 percent to 2,995.82.

The strength on Wall Street came as a batch of largely disappointing U.S. economic data reinforced expectations for a near-term interest rate cut by the Federal Reserve.

Initial buying interest was generated in reaction to a report from payroll processor ADP showing private sector job growth reaccelerated in the month of June but still came in below economist estimates.

ADP said private sector employment climbed by 102,000 jobs in June after rising by an upwardly revised 41,000 jobs in May.

Economists had expected employment to increase by about 140,000 jobs compared to the addition of 27,000 jobs originally reported for the previous month.

“Even with the US-China trade talks back on track (for now at least) the evidence of a slowdown in employment growth should still be enough to persuade the Fed to cut rates in either July or September,” said Paul Ashworth, Chief U.S. Economist at Capital Economics.

CME Group’s FedWatch tool shows an interest rate cut of at least 25 basis points at the Fed’s July meeting is priced into the markets, although Ashworth said expectations of a 50 basis point cut “seem misplaced.”

Stocks saw further upside after a report from the Institute for Supply showing a notable slowdown in the pace of service sector growth added to the optimism about a rate cut.

The ISM said its non-manufacturing index dropped to 55.1 in June from 56.9 in May, hitting its lowest level since a matching reading in July of 2017.

While a reading above 50 still indicates growth in service sector activity, economists had expected the index to show a more modest decrease to 55.9.

A separate report released by the Commerce Department showed the U.S. trade deficit widened by more than anticipated in the month of May, as the value of imports jumped by much more than the value of exports.

The Commerce Department said the trade deficit widened to $55.5 billion in May from a revised $51.2 billion in April. Economists had expected the trade deficit to widen to $54.0 billion.

The wider trade deficit came as the value of imports surged up by 3.3 percent to $266.2 billion compared to a 2.0 percent jump in the value of exports to $210.6 billion.

Andrew Hunter, Senior U.S. Economist at Capital Economics, said the wider than expected deficit suggests net trade was a “slightly bigger drag on second-quarter GDP growth than we had previously anticipated.”

“Despite the recent ceasefire agreed between Presidents Donald Trump and Xi Jinping, we still think it is slightly more likely than not that the trade dispute with China will ultimately escalate further,” Hunter said.

He added, “The upshot is that net trade is likely to remain a modest drag on growth over the second half of this year, which we expect to compound a sharp slowdown in domestic demand growth.”

Interest rate-sensitive commercial real estate stocks turned in some of the market’s best performances on the day, driving the Dow Jones U.S. Real Estate Index up by 1.3 percent.

Significant strength was also visible among housing stocks, which would also benefit from lower interest rates. The Philadelphia Housing Sector Index climbed 1.1 percent to its best closing level in over a year.

Transportation, software and telecom stocks also saw notable strength, moving higher along with most of the other major sectors.

Economy

NASD Exchange Extends Bearish Run After 0.56% Drop

Published

2 days ago

03/04/2026

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange extended its stay in the south territory with a decline of 0.56 per cent on Wednesday, April 2.

This brought down the market capitalisation by N13 billion to N2.417 trillion from N2.430 trillion, and downed the NASD Unlisted Security Index (NSI) by 22.57 points to 4,062.87 points from the previous session’s 4,062.87 points.

It was observed that the NASD exchange ended with three price gainers and three price losers during the trading day.

MRS Oil Plc depreciated by N19.00 to close at N171.00 per unit compared with the previous price of N190.00 per unit, NASD Plc lost N4.14 to trade at N37.36 per share compared with Wednesday’s N41.50 per share, and Central Securities Clearing System (CSCS) Plc gave up N2.00 to sell at N78.00 per unit versus N80.00 per unit.

On the flip side, FrieslandCampina Wamco Nigeria Plc appreciated by 19 Kobo to N93.00 per share from N92.81 per share, Food Concepts Plc expanded by 15 Kobo to N2.87 per unit from N2.72 per unit, and Great Nigeria Insurance (GNI) Plc improved by 2 Kobo to 52 Kobo per share from 50 Kobo per share.

Yesterday, the volume of securities dipped by 91.8 per cent to 260.2 million units from 3.2 billion units, the value of securities went down by 98.1 per cent to N154.2 million from N8.3 billion, while the number of deals soared by 53.3 per cent to 46 deals from 30 deals.

GNI Plc was the most active stock by value on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by CSCS Plc with 56.9 million units valued at N3.9 billion, and Okitipupa Plc with 27.5 million units traded for N1.8 billion.

The most traded stock by volume on a year-to-date basis was also GNI Plc with 3.4 billion units sold for N8.2 billion, trailed by Resourcery Plc with 1.1 billion units exchanged for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units transacted for N1.2 billion.

Economy

Naira Slips to N1,380/$1 at Official Market, Remains N1,405/$1 at Black Market

Published

2 days ago

03/04/2026

Adedapo Adesanya

By Adedapo Adesanya

The Naira dropped N2.09 or 0.15 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, April 2, to trade at N1,380.79/$1 compared with Wednesday’s rate of N1,378.70/$1.

However, it appreciated against the Pound Sterling in the official market by N2.77 to quote at N1,824.86/£1 versus the N1,836.57/£1 it was traded at midweek, and improved its value against the Euro by N10.54 to N1,591.92/€1 from N1,602.46/€1.

Yesterday was the last trading session of the week for the local currency in the spot market, as the market will be closed on Friday and Monday for the Easter Holiday.

At the black market, the Nigerian Naira maintained stability against the greenback yesterday at N1,405/$1, but gained N8 at the GTBank FX counter to settle at N1,388/$1, in contrast to the previous session’s N1,396/$1.

Pressure eased on the domestic currency as strong policy indicators have helped calm the majority of worries within the financial systems. Particularly in the remittance segment, the apex bank has directed all International Money Transfer Operators (IMTOs) to route remittance transactions through designated Naira settlement accounts in banks, a move aimed at boosting transparency and channelling more foreign exchange into the formal market.

This helps take off pressure from the foreign reserves, which have fallen below the $50 billion mark as they are gradually decreasing rather than falling sharply.

Meanwhile, the cryptocurrency market was bullish on Thursday, as macro sentiment shifted against recent optimism after reports that Iran is drafting a protocol with Oman to manage traffic through the Strait of Hormuz, easing concerns about disruptions to a key global oil route.

The remarks came after U.S. President Trump on Wednesday night vowed to hit Iran “extremely hard” in the coming weeks and that the Strait of Hormuz would “open naturally” once the war ends.

Cardano (ADA) chalked up 1.9 per cent to trade at $0.2435, Dogecoin (DOGE) grew by 1.2 per cent to $0.0912, Ethereum (ETH) appreciated by 0.8 per cent to $2,066.37, Bitcoin (BTC) added 0.5 per cent to sell at $67,080.53, Solana (SOL) increased by 0.5 per cent to $79.91, and Ripple (XRP) jumped 0.2 per cent to $1.31.

Conversely, Binance Coin (BNB) dipped 0.7 per cent to $586.90, and TRON (TRX) depreciated by 0.3 per cent to $0.3147, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.

Economy

Bulls, Bears Share Customs Street’s Spoils Amid Bullish Investor Sentiment

Published

2 days ago

03/04/2026

Dipo Olowookere

By Dipo Olowookere

The local stock market was relatively flat on Friday, as the bears and the bulls shared the spoils of war, though investor sentiment turned bullish compared with the preceding session’s bearish posture.

Data from the Nigerian Exchange (NGX) Limited showed that the All-Share Index (ASI) was marginally down by 4.66 points as it ended at 201,698.89 points versus Wednesday’s 201,703.55 points, and the market capitalisation slightly contracted by N3 billion to N129.806 trillion from N129.809 trillion.

Customs Street was shut on Friday because of the public holidays declared by the federal government today and next Monday.

Business Post reports that John Holt declined by 9.91 per cent to N15.45, Abbey Mortgage Bank shed 9.60 per cent to trade at N8.95, International Energy Insurance slipped by 6.48 per cent to N3.32, Chams shrank by 5.30 per cent to N3.75, and Tantalizers depreciated by 5.18 per cent to N4.03.

On the flip side, Unilever Nigeria improved by 10.00 per cent to N103.40, Fortis Global Insurance gained 9.82 per cent to trade at N1.23, Multiverse appreciated 9.81 per cent to N20.15, Legend Internet advanced by 9.38 per cent to N6.30, and Zichis grew by 9.02 per cent to N14.14.

The market breadth index was positive during the trading session, as there were 35 appreciating stocks and 24 depreciating stocks.

Yesterday, investors traded 560.0 million equities valued at N19.3 billion in 49,676 deals, in contrast to the 815.5 million equities worth N33.3 billion transacted in 52,641 deals in the preceding day, representing a drop in the trading volume, value, and number of deals by 31.33 per cent, 42.04 per cent, and 5.63 per cent, respectively.

Secure Electronic Technology dominated the activity log with 59.7 million shares valued at N61.1 million, Wema Bank exchanged 52.0 million equities worth N1.4 billion, VFD Group transacted 36.0 million stocks for N410.5 million, Access Holdings sold 35.3 million shares valued at N914.8 million, and Chams traded 31.0 million equities worth N115.0 million.