Economy
Global Economic Worries Weigh on US Stocks
By Investors Hub
The major U.S. index futures are currently pointing to a lower opening on Friday, with stocks likely to see further downside after moving sharply lower over the course of the two previous sessions.
Concerns about the outlook for the global economy may continue to weigh on the markets after President Donald Trump announced plans to impose a 10 percent tariff on the remaining $300 billion worth of Chinese imports.
The new tariffs announced by Trump represent the latest escalation in the trade war between the U.S. and China, which has been a dark cloud over the global economy for over a year.
Traders are also digesting a closely watched Labor Department report showing U.S. job growth slowed in the month of July but came in line with economist estimates.
After moving significantly higher over the course of morning trading on Thursday, stocks pulled back sharply after President Donald Trump announced plans to impose a 10 percent tariff on the remaining $300 billion worth of Chinese imports.
The major averages climbed off their worst levels going into the close but remained firmly negative. The Dow jumped more than 300 points in morning trading but ended the day down 280.85 points or 1.1 percent at 26,583.42.
The tech-heavy Nasdaq also slid 64.30 points or 0.8 percent to 8,111.12 and the S&P 500 slumped 26.82 points or 0.9 percent to 2,953.56.
With the downturn, the major averages extended the steep drop seen late in the previous session, ending the day at their worst closing levels in a month.
The afternoon pullback came as Trump announced his plans to impose new tariffs on Chinese goods in a series of posts on Twitter.
Trump revealed the plan shortly after U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin wrapped up the latest round of trade talks in Shanghai.
“Our representatives have just returned from China where they had constructive talks having to do with a future Trade Deal,” Trump tweeted. “We thought we had a deal with China three months ago, but sadly, China decided to re-negotiate the deal prior to signing.”
Trump accused China of failing to follow through on pledges to buy large quantities of U.S. agricultural products and stop the sale of Fentanyl to the U.S.
“Trade talks are continuing, and during the talks the U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country,” Trump said.
He added, “We look forward to continuing our positive dialogue with China on a comprehensive Trade Deal, and feel that the future between our two countries will be a very bright one!”
Trump noted that products targeted by the new tariffs do not include the $250 billion worth of Chinese goods already being tariffed at 25 percent.
The new tariffs announced by Trump represent the latest escalation in the trade war between the U.S. and China, which has led to increasing concerns about the outlook for the global economy.
The Federal Reserve’s decision to cut interest rates by a quarter point on Wednesday was partly due to the potential impact of the ongoing trade dispute.
Stocks had rallied earlier in the session as weaker than expected U.S. economic data resurrected investors’ hopes for future interest rate cuts.
Shortly after the start of trading, the Institute for Supply Management released a report unexpectedly showing a continued slowdown in the pace of growth in U.S. manufacturing activity in the month of July.
The ISM said its purchasing managers index dipped to 51.2 in July after edging down to 51.7 in June. While a reading above 50 still indicates growth in manufacturing activity, economists had expected the index to inch up to 52.0.
With the continued decrease, the purchasing managers index dropped to its lowest level since hitting 49.6 in August of 2016.
A separate report from the Commerce Department showed U.S. construction spending plunged by 1.3 percent to in June after falling by 0.5 percent in May.
The data reignited optimism about future rate cuts that was dashed by yesterday’s comments from Federal Reserve Chairman Jerome Powell.
The Fed cut interest rates as expected on Wednesday, but Powell spooked the markets by suggesting the move may not be the first in a series of rate cuts.
Energy stocks saw substantial weakness on the day, moving sharply lower along with the price of crude oil. Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index and the NYSE Arca Natural Gas Index plunged by 5.5 percent and 4.9 percent, respectively.
Significant weakness also emerged among banking stocks, as reflected by the 3.7 percent nosedive by the KBW Bank Index.
Steel, transportation, semiconductor and networking stocks also came under considerable selling pressure over the course of the session.
On the other hand, gold stocks bucked the downtrend, driving the NYSE Arca Gold Bugs Index up by 5.2 percent. The strength in the sector came as the price of the precious metal rallied in extended trading.
By Dipo Olowookere
Investors at the Nigerian Exchange (NGX) Limited have continued to show excitement for the full-year earnings of companies on the exchange so far.
On Friday, Customs Street further appreciated by 1.01 per cent as more organization released their financial statements for the 2025 fiscal year.
During the session, traders continued their selective trading strategy, with the energy sector going up by 2.47 per cent at the close of business despite profit-taking in the banking counter, which saw its index down by 0.11 per cent.
Yesterday, the insurance space grew by 2.16 per cent, the industrial goods segment expanded by 1.70 per cent, and the consumer goods industry jumped by 0.42 per cent.
Consequently, the All-Share Index (ASI) increased by 1,722.13 points to 171,727.49 points from 170,005.36 points, and the market capitalisation soared by N1.106 trillion to N110.235 trillion from the N109.129 trillion it ended on Thursday.
Business Post reports that there were 59 appreciating stocks and 19 depreciating stocks on Friday, representing a positive market breadth index and strong investor sentiment.
The trio of Omatek, Deap Capital, and NAHCO gained 10.00 per cent each to sell for N2.64, N6.82, and N136.40 apiece, as Zichis and Austin Laz appreciated by 9.98 per cent each to close at N6.72 and N5.40, respectively.
Conversely, The Initiates depreciated by 9.74 per cent to N19.45, DAAR Communications slumped by 7.32 per cent to N1.90, United Capital crashed by 6.55 per cent to N18.55, Coronation Insurance lost 5.71 per cent to quote at N3.30, and First Holdco shrank by 5.53 per cent to N47.00.
The activity chart showed an improvement in the activity level, with the trading volume, value, and number of deals up by 33.77 per cent, 93.27 per cent, and 10.63 per cent, respectively.
This was because traders transacted 953.8 million shares worth N43.1 billion in 51,005 deals compared with the 713.0 million shares valued at N22.3 billion traded in 46,104 deals a day earlier.
Fidelity Bank was the most active with 92.4 million units sold for N1.8 billion, Chams transacted 69.2 million units valued at N310.9 million, Deap Capital exchanged 59.1 million units worth N382.7 million, Access Holdings traded 57.2 million units valued at N1.3 billion, and Tantalizers transacted 48.6 million units worth N228.2 million.
By Adedapo Adesanya
The value of the Naira contracted against the United States Dollar on Friday by 13 Kobo or 0.01 per cent to N1,366.19/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEX) from the previous day’s value of N1,366.06/$1.
According to data from the Central Bank of Nigeria (CBN), the Nigerian currency also depreciated against the Pound Sterling in the same market window yesterday by N2.37 to N1,857.75/£1 from the N1,855.38/£1 it was traded on Thursday, and further depleted against the Euro by 57 Kobo to close at N1,612.52/€1 versus the preceding session’s N1,611.95/€1.
In the same vein, the exchange rate for international transactions on the GTBank Naira card showed that the Naira lost N8 on the greenback yesterday to N1,383/$1 from the previous day’s N1,375/$1 and at the black market, the Nigerian currency maintained stability against the Dollar at N1,450/$1.
FX analysts anticipate this trend to persist, primarily influenced by increasing external reserves, renewed inflows of foreign portfolio investments, and a reduction in speculative demand.
In the short term, stability in the FX market is expected to continue, supported by policy interventions and improving market confidence.
Nigeria’s foreign reserves experienced an upward trajectory, increasing by $632.38 million within the week to $46.91 billion from $46.27 billion in the previous week.
The Dollar appreciation this week appears to be largely technical, serving as a correction to the substantial losses experienced from mid- to late January.
Meanwhile, the cryptocurrency market slightly appreciated, with Bitcoin (BTC) climbing near $68,000, up nearly 5 per cent since hitting $60,000 late on Thursday after investor confidence in crypto’s utility as a store of value, inflation hedge, and digital currency faltered.
The sell-off extended beyond crypto, with silver plunging 15 per cent and gold sliding more than 2 per cent. US stocks also fell.
The latest recoup saw the price of BTC up by 4.7 per cent to $67,978.96, as Ethereum (ETH) appreciated by 6.3 per cent to $2,021.10, and Ripple (XRP) surged by 9.5 per cent to $1.42.
In addition, Solana (SOL) grew by 7.3 per cent to $85.22, Cardano (ADA) added 6.1 per cent to trade at $0.2683, Dogecoin (DOGE) expanded by 5.4 per cent to $0.0958, Litecoin (LTC) rose by 5.2 per cent to $53.50, and Binance Coin (BNB) jumped by 2.3 per cent to $637.79, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
By Adedapo Adesanya
Oil prices settled higher on Friday as traders worried that this week’s talks between the US and Iran had failed to reduce the risk of a military conflict between the two countries.
Brent crude futures traded at $68.05 a barrel after going up by 50 cents or 0.74 per cent, and the US West Texas Intermediate (WTI) crude futures finished at $63.55 a barrel due to the addition of 26 cents or 0.41 per cent.
Iran and the US held negotiations in Muscat, the capital of Oman, on Friday to overcome sharp differences over Iran’s nuclear programme.
It was reported that the talks had ended with Iran’s foreign minister saying negotiators will return to their capitals for consultations and the talks will continue.
Regardless, the meeting kept investors anxious about geopolitical risk, as Iran wanted to stick to nuclear issues while the US wanted to discuss Iran’s ballistic missiles and support for armed groups in the region.
Any escalation of tension between the two nations could disrupt oil flows, since about a fifth of the world’s total consumption passes through the Strait of Hormuz between Oman and Iran.
Saudi Arabia, the United Arab Emirates, Kuwait and Iraq export most of their crude via the strait, as does Iran, which is a member of the Organisation of the Petroleum Exporting Countries (OPEC).
According to Reuters, Iran objected to the presence of any US Central Command (CENTCOM) or other regional military officials, saying that would jeopardise the process.
The current confrontation was sparked by more than two weeks of unrest in Iran that saw authorities launch a deadly crackdown that killed thousands of civilians and shocked the world. As reports of the deaths trickled out of Iran, US President Donald Trump threatened to strike Iran if any of the tens of thousands of protesters arrested were executed.
Meanwhile, Kazakhstan’s planned oil exports could fall by as much as 35 per cent this month via its main route through Russia, as the country’s top oil company, Tengiz oilfield, slowly recovers from fires at power facilities in January.
ING analysts have pointed out Iran’s neighbour, Iraq, and a disagreement with the US as another bullish factor for oil prices. It seems Iraqi politicians favour Mr Nouri al-Maliki as the country’s next Prime Minister, but the US thinks Mr al-Maliki is too close to Iran. President Trump has already threatened the oil producer with consequences if he emerges as PM.
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