Economy
Global Economic Worries Weigh on Wall Street
By Investors Hub
The major U.S. index futures are currently pointing to a lower opening on Monday, with stocks likely to extend the downward move seen last Friday.
Renewed concerns about the global economic outlook may generate some selling pressure following the release of disappointing European economic data.
Survey data from IHS Markit showed the euro area private sector was close to stalling at the end of the third quarter. The flash composite output index unexpectedly fell to a 75-month low of 50.4 in September from 51.9 in August.
Germany’s private sector contracted the most since late 2012 as a downturn in manufacturing deepened and service sector growth lost momentum.
Waning optimism about a potential U.S.-China trade deal may also weigh on the markets after the Chinese cut short a visit to the U.S. last week and President Donald Trump indicated he is not in a hurry to reach an agreement.
Overall trading activity may be somewhat subdued, however, as a lack of major U.S. economic data may keep some traders on the sidelines.
Reports on consumer confidence, new home sales, durable goods orders and personal income and spending are likely to attract attention in the coming days.
After seeing modest strength throughout the morning, stocks once again came under pressure in afternoon trading on Friday. The major averages pulled back well off their best levels of the day and firmly into negative territory.
The major averages ended the day off their lows of the session but stuck in the red. The Dow fell 159.72 points or 0.6 percent to 26,935.07, the Nasdaq slid 65.20 points or 0.8 percent to 8,117.67 and the S&P 500 dropped 14.72 points or 0.5 percent to 2,992.07.
With the downturn on the day, the major averages also moved lower for the week, the Dow slumped by 1 percent, while the Nasdaq and the S&P 500 fell by 0.7 percent and 0.5 percent, respectively.
Stocks showed a notable move to the downside on news Chinese trade negotiators canceled a scheduled visit to U.S. farm states next week.
The Chinese delegation was in Washington this week for deputy-level trade talks and had been scheduled to visit American farms next week as a gesture of goodwill.
However, the Montana Farm Bureau revealed that the visit has been canceled, as the delegation is heading back to China sooner than expected.
The news offset some of the recent optimism about a potential end to the U.S.-China trade war, with the deputy-level talks expected to help pave the way for more productive high-level talks next month.
Comments from President Donald Trump indicating he is not interested in a “partial deal” with China also dashed hopes of a possible “interim deal.”
Trump also told reporters he doesn’t think he needs to reach a trade deal with China before the 2020 elections, claiming the U.S. is not being affected by the trade war.
Uncertainty about the outlook for interest also weighed on stocks, with Boston Federal Reserve President Eric Rosengren arguing that it is not necessary and potentially risky for the central bank to continue lowering rates.
Rosengren noted in a speech at the Stern School of Business at New York University that the U.S. economy has held up well in the face of trade-related impediments.
“Additional accommodation is not needed for an economy where labor markets are already tight – and risks further inflating the prices of riskier assets, and encouraging households and firms to take on what may be too much leverage,” Rosengren said.
Reflecting a divide at the Fed, Rosengren’s speech came the same day St. Louis Fed President James Bullard released a statement explaining his preference for cutting interest rates by 50 basis points at the Fed meeting earlier this week.
Bullard cited signs that U.S. economic growth is expected to slow in the near horizon as well as continued indications of low inflation.
Semiconductor stocks showed a significant move to the downside on the day, dragging the Philadelphia Semiconductor Index down by 1.8 percent.
Xilinx (XLNX) posted a steep loss after the chipmaker said its CFO Lorenzo Flores is stepping down from his position to pursue another executive opportunity.
Considerable weakness also emerged among computer hardware stocks, as reflected by the 1.4 percent drop by the NYSE Arca Computer Hardware Index.
Retail, tobacco, and oil service stocks also came under pressure over the course of the session, while gold and pharmaceutical stocks showed strong moves to the upside.
By Modupe Gbadeyanka
The Dangote Refinery located in the Lekki area of Lagos State has been described as a game-changer for Nigeria’s economy because of its significance to the country’s sustainable growth.
This was the view of the Ogun State Chamber of Commerce, Industry, Mines, and Agriculture (OGUNCCIMA) through its president, Mr Niyi Oshiyemi.
“The Dangote Refinery is a game-changer for Nigeria’s economy. With a capacity to refine 650,000 barrels of crude oil daily, it has reduced Nigeria’s reliance on imported petroleum products, conserved foreign exchange, and fortified our energy security.
“This milestone reinforces the critical role the private sector plays in national development,” Mr Oshinyemi said, noting that, “The refinery’s operations have created employment for Nigerians at all levels while fostering technology transfer and skills acquisition. This has strengthened local businesses and equipped them with the tools to compete in domestic and global markets.”
The emphasis on local content has been a cornerstone of Dangote Refinery’s strategy. By sourcing materials locally and partnering with indigenous companies, the refinery has supported the growth of Nigerian enterprises and encouraged investments in infrastructure, engineering, and technology.
The ripple effects of the Dangote Refinery extend beyond the energy sector. Its presence has catalyzed industrialization by attracting investments in related sectors such as petrochemicals, manufacturing, and transportation. This multiplier effect has significantly expanded Nigeria’s industrial base and enhanced the nation’s economic competitiveness.
“This refinery is a shining example of what can be achieved through visionary leadership and investment in strategic sectors. It demonstrates Africa’s potential to compete globally and foster regional integration,” Mr Oshiyemi remarked.
In addition to its economic contributions, Dangote Refinery has maintained a strong commitment to corporate social responsibility. The Dangote Group’s investments in education, healthcare, and infrastructure have improved the quality of life for many Nigerians and strengthened community resilience.
“Dangote Refinery exemplifies the role of private sector enterprises in driving social progress alongside economic development. Its initiatives in healthcare and education are building a brighter future for Nigerians,” the OGUNCCIMA chief noted.
He urged stakeholders across public and private sectors to emulate the Dangote Refinery’s innovative approach to development. By fostering partnerships and investing in transformative projects, Nigeria can achieve sustainable economic growth and reduce its reliance on external resources.
“This refinery stands as a model for what is possible when the private sector leads with vision and commitment. We call on all stakeholders to collaborate and replicate such success stories to build a resilient, self-reliant, and prosperous Nigeria,” Mr Oshiyemi concluded.
By Adedapo Adesanya
The House of Representatives on Wednesday passed the Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for the next three years (2025-2027).
In passing the MTEF, the lower chamber’s committees on Finance, Petroleum Upstream, and Petroleum Downstream were tasked to investigate reports from the Revenue Mobilization, Allocation, and Fiscal Responsibility Commission (RMAFC) alleging that the Nigerian National Petroleum Company (NNPC) Limited’s withheld N8.48 trillion as claimed subsidies for petrol.
Additionally, the investigation will address the Nigeria Extractive Industries Transparency Initiative (NEITI) report that claimed the NNPC failed to remit $2 billion (N3.6 trillion) in taxes to the federal government.
The committees were further directed to verify the total cumulative amount of unremitted revenue (under-recovery) from the sale of Premium Motor Spirit (PMS) by the NNPC between 2020 and 2023.
Some of the recommendations in the MTEF as adopted by the house are; that the projected oil benchmark prices are $75, $76.2 and $75.3 per barrel in 2025, 2026 and 2027, respectively.
Three-year projections for domestic crude oil production are 2.06 million barrels per day, 2.10 million barrels per day and 2.35 million barrels per day for the subsequent years of 2025, 2026 and 2027.
The country’s economic growth rate forecast, measured by the gross domestic product (GDP) was put at 4.6 per cent, 4.4 per cent and 5.5 per cent for the years 2025, 2026 and 2027, respectively.
By Adedapo Adesanya
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has said the price of Premium Motor Spirit, also known as petrol, being sold by the old Port Harcourt Refinery, which resumed production on Tuesday, is N75 per litre higher than that sold by the Dangote Refinery.
This was revealed by the association’s Public Relations Officer, Mr Joseph Obele, during the official reopening ceremony of the refinery, which is now operating at a capacity of 60,000 barrels per day.
Business Post reports that the lifting price of Dangote’s petrol product is N990 per litre. However, the refinery announced a N20 discount on Sunday, which is only available to marketers buying a minimum of 2 million litres of the fuel.
Mr Obele, a former chairman of the Independent Petroleum Marketers Association of Nigeria (IPMAN) at the Port Harcourt Deport who initially applauded the federal government for revitalising the old refinery, expressed concern over the pricing disparity between petrol supplied by the Nigerian National Petroleum Company (NNPC) Limited and the Dangote Refinery.
According to him, while Dangote Refinery sells petrol to marketers at N970 per litre, NNPC’s price stands at N1,045, a difference of N75 per litre.
He said the N75 price differential is a steep margin for businesses, particularly for an industry where profitability hinges on competitive pricing.
However, Mr Obele described the refinery’s restoration as a significant step in reducing Nigeria’s dependence on imported petroleum products.
He revealed that the Group Chief Executive Officer of NNPC Limited, Mr Mele Kyari, has promised to address the issue and harmonise prices to mitigate the impact on marketers and consumers.
The reopening of the Port Harcourt Refinery I is expected to enhance local production capacity and reduce reliance on imports, a move welcomed by stakeholders across the sector.
However, concerns over pricing disparities underscore the need for continuous reforms to stabilise the downstream sector of the petroleum industry.
The reopening has also sparked anticipation for the rehabilitation of other state-owned refineries including the second refinery in Port Harcourt as well as the Warri and Kaduna structures.
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