Economy
Trade Deal Pessimism Weigh on US Stocks
By Investors Hub
The major U.S. index futures have erased an earlier advance and are currently pointing to a roughly flat opening on Monday following last week?s climb to record highs.
The pullback by the futures came after a tweet from CNBC?s Beijing Bureau Chief Eunice Yoon suggested Chinese officials have grown pessimistic about the chances for a trade deal.
?Mood in Beijing about #trade deal is pessimistic, government source tells me. #China troubled after Trump said no tariff rollback. (China thought both had agreed in principle.)? Yoon tweeted.
She added, ?Strategy now to talk but wait due to impeachment, US election. Also prioritize China economic support.?
The futures had previously benefited from a weekend report from Chinese state media indicating the U.S. and China had ?constructive discussions? regarding a phase one trade deal in a high-level phone call.
U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin reportedly talked with Chinese Vice Premier Liu He about the core issues for an agreement.
Traders have recently put tremendous faith in reports and comments about the trade talks, highlighting the importance of a trade deal to the global economic outlook.
Optimism a trade agreement will eventually be reached has helped propel stocks to record highs, although it remains to be seen if a deal will be finalized and actually benefit U.S. producers.
Following the lackluster performance seen over the past several sessions, stocks showed a strong move to the upside during trading on Friday. With the upward move on the day, the major averages all reached new record highs.
The major averages saw continued strength going into the close, ending the session at their best levels of the day. The Dow jumped 222.93 points or 0.8 percent to 28,004.89, the Nasdaq climbed 61.81 points or 0.7 percent to 8,540.83 and the S&P 500 advanced 23.83 points or 0.8 percent to 3,120.46.
For the week, the Dow surged up by 1.2 percent, while the Nasdaq and the S&P 500 climbed by 0.8 percent and 0.9 percent, respectively.
The strength on Wall Street came amid renewed optimism about a U.S.-China trade deal following comments from White House officials.
White House economic adviser Larry Kudlow said Thursday that U.S. and Chinese negotiators are in contact every single day and are “getting close” to a phase one trade deal.
“It’s not done yet, but there has been very good progress and the talks have been very constructive,” Kudlow said at an event at the Council on Foreign Relations.
In an appearance on the Fox Business Network on Friday, Commerce Secretary Wilbur Ross said the talks are “down to the last details” and a deal will be completed “in all likelihood.”
Adding to the positive sentiment, China has lifted a nearly five-year ban on imports of U.S. poultry in a goodwill gesture that could lead to more than $1 billion in annual shipments to China.
Traders also reacted positively to a report from the Commerce Department showing U.S. retail sales rebounded by slightly more than expected in the month of October.
The Commerce Department said retail sales climbed by 0.3 percent in October, reversing the 0.3 percent drop in September. Economists had expected retail sales to rise by 0.2 percent.
Excluding a rebound in auto sales, the report said retail sales rose by 0.2 percent in October after edging down by 0.1 percent in September. Ex-auto sales had been expected to increase by 0.4 percent.
Meanwhile, traders shrugged off a report from the Federal Reserve showing a steep drop in industrial production in October, as the decrease was partly due to the since-resolved strike at General Motors (GM).
Healthcare stocks turned in some of the market’s best performances on the day, resulting in a 2.2 percent jump by the Dow Jones U.S. Health Care Index. The index ended the session at a new record closing high.
Significant strength was also visible among biotechnology stocks, as reflected by the 2 percent gain posted by the NYSE Arca Biotechnology Index. The advance lifted the index to its best closing level in over three months.
Oil service stocks also saw considerable strength on the day, driving the Philadelphia Oil Service Index up by 1.9 percent. The strength among oil service stocks came amid a notable increase by the price of crude oil.
Natural gas, steel, pharmaceutical and computer hardware stocks also turned in strong performances amid broad based buying interest.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Wednesday, August 5, as the market witnessed weaker trading activity with only two deals executed.
In the midweek session, the volume of securities exchanged by investors dropped 99.9 per cent to 802 units from the 1.6 million units recorded on Tuesday. The value of securities further decreased by 99.6 per cent to N208,240 from the preceding session’s N47.6 million, and the number of deals significantly went down by 93.9 per cent to two deals from the 33 deals recorded a day earlier.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 76.9 million units transacted for N5.5 billion.
GNI Plc was also the most active stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
There were no price gainers or losers yesterday.
As a result, the market capitalisation stood unmoving at N2.739 trillion, while the NASD Security Index (NSI) remained unchanged at 4,563.96 points.
By Adedapo Adesanya
The Naira slid against the US Dollar by N2.28 or 0.17 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Wednesday, August 5, to N1,363.85/$1 from N1,362.55/$1.
The local currency also declined against the Pound Sterling in the official market during the session by N5.97 to close at N1,837.38/£1 compared with Tuesday’s closing rate of N1,831.41/£1, and against the Euro, it crashed by N6.54 to quote at N1,575.25/€1 versus the preceding session’s N1,568.71/€1.
But at the black market, the Nigerian Naira traded flat against the greenback yesterday at N1,400/$1, and also remained unchanged at the GTBank FX desk at N1,373/$1.
The Central Bank of Nigeria (CBN) says rates have narrowed to below two per cent, while the country’s external reserves have risen above $52.5 billion, reflecting the impact of its ongoing monetary and foreign exchange reforms.
CBN Governor Yemi Cardoso, represented by the Acting Director of Corporate Communications and Investor Relations, Mrs Hakama Sidi-Ali, disclosed this on Tuesday during the CBN Fair in Gombe. He noted that reforms introduced since 2023 had significantly reduced the disparity between the official FX market and the parallel market.
“The Naira continues to strengthen, with the spread between official and Bureau de Change rates now below two per cent,” he said, adding that reserves at $52.5 billion were supported by sustained inflows and renewed investor confidence in the economy.
Interbank FX transactions slid as weaker market activities dropped total Dollar volume exchanged to $75.35 million, a 51.8 per cent decline from $156.23 million in turnover quoted at the previous close.
The deals at the NFEM window also fell as data from the central bank put Wednesday’s quote at 82 from 139.
In the cryptocurrency market, major were down as global risk sentiment softened as a key world equity index slipped and chipmakers fell.
The MSCI All Country World Index snapped a five-day run to fall 0.2 per cent as chipmakers retreated on both sides of the Pacific. South Korea’s Kospi, a bellwether for the AI trade, dropped 4.4 per cent.
Ripple (XRP) depleted by 1.7 per cent to $1.05, Binance Coin (BNB) decreased by 1.0 per cent to $594.87, Cardano (ADA) depreciated by 0.9 per cent to $0.1884, TRON (TRX) shrank by 0.2 per cent to $0.3261, Solana (SOL) crumbled by 0.1 per cent to $74.00, and Dogecoin (DOGE) went down by 0.1 per cent to $0.0697.
On the flip side, Ethereum (ETH) gained 2.3 per cent to trade at $1,911.41, and Bitcoin (BTC) rose by 0.8 per cent to $64,759.28, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
By Dipo Olowookere
The domestic stock exchange rebounded by 0.05 per cent on Wednesday on the back of renewed bargain-hunting by investors, though the level of activity waned.
After bleeding for a few days, the Nigerian Exchange (NGX) Limited heaved a sigh of relief yesterday, as the All-Share Index (ASI) gained 109.41 points to close at 244,912.24 points compared with the previous day’s 244,802.83 points, and the market capitalisation garnered N71 billion to settle at N158.087 trillion versus Tuesday’s N158.016 trillion.
Business Post reports that despite the rebound recorded by Customs Street at midweek, the market breadth index remained negative, as there were 20 price advancers and 29 price decliners, implying bearish investor sentiment.
Linkage Assurance appreciated by 9.94 per cent to N1.77, AVA Capital rose by 9.55 per cent to N10.90, Fortis Global Insurance advanced by 7.69 per cent to N2.80, McNichols gained 7.34 per cent to finish at N5.85, and Coronation Insurance surged by 5.51 per cent to N2.49.
Conversely, Honeywell Flour depreciated by 9.94 per cent to N16.30, PZ Cussons gave up 9.94 per cent to trade at N74.75, Zichis crashed by 9.74 per cent to N20.76, Learn Africa slipped by 9.62 per cent to N9.40, and Neimeth tumbled by 8.33 per cent to N8.25.
The busiest equity was FCMB, with a turnover of 369.2 million units valued at N4.1 billion. Chams transacted 46.7 million units worth N201.8 million, First Holdco transacted 43.5 million units for N5.7 billion, Access Holdings sold 29.8 million units worth N778.0 million, and Linkage Assurance exchanged 19.6 million units valued at N33.5 million.
At the close of transactions, market participants bought and sold 824.1 million units worth N25.5 billion in 48,114 deals, in contrast to the 1.6 billion units sold for N28.7 billion in 54,160 deals a day earlier, showing a shortfall in the trading volume, value, and number of deals by 48.49 per cent, 11.15 per cent, and 11.16 per cent, respectively.
