Economy
Caution Likely to Prevail Amid Focus On US-China Trade Talks
By Investors Hub
The major U.S. index futures are pointing to a roughly flat opening on Monday following the roller coaster ride seen over the past few sessions.
Traders may be reluctant to make significant moves as they keep a close eye on high-level trade talks between the U.S. and China in Beijing.
Deputy U.S. Trade Representative Jeffrey Gerrish is leading the U.S. team at the two-day meeting, with a spokesman for China?s Foreign Ministry predicting ?positive and constructive discussions.?
News on the merger-and-acquisition front may generate some buying interest, although traders are likely to remain cautious amid the ongoing U.S. government shutdown.
Weekend meetings reportedly made little progress toward ending the impasse over funding for President Donald Trump?s controversial border wall.
Stocks showed a substantial move to the upside over the course of the trading day on Friday, more than offsetting the sharp pullback seen in the previous session. The major averages all moved significantly higher, with the tech-heavy Nasdaq leading the way.
The major averages moved roughly sideways going into the close, holding on to strong gains. The Dow surged up 746.94 points or 3.3 percent to 23,433.16, the Nasdaq soared 275.35 points or 4.3 percent to 6,738.86 and the S&P 500 spiked 84.05 points or 3.4 percent to 2,531.94.
With the rally on the day, the major averages also moved notably higher for the week. While the Dow jumped by 1.6 percent, the Nasdaq and the S&P 500 shot up by 2.3 percent and 1.9 percent, respectively.
The rebound on Wall Street partly reflected a positive reaction to a Labor Department report showing much stronger than expected job growth in the month of December.
The Labor Department said non-farm payroll employment soared by 312,000 jobs in December after climbing by an upwardly revised 176,000 jobs in November.
Economists had expected employment to increase by about 177,000 jobs compared to the addition of 155,000 jobs originally reported for the previous month.
Paul Ashworth, Chief U.S. Economist at Capital Economics, suggested the substantial job growth in December would “seem to make a mockery of market fears of an impending recession.”
“Admittedly, employment is a coincident indicator, whereas the ISM manufacturing index, which we learned yesterday fell sharply in December, is a leading indicator,” Ashworth said.
He added, “But, even allowing for that distinction, this employment report suggests the U.S. economy still has considerable forward momentum.”
The report also said the unemployment rate rose to 3.9 percent in December from 3.7 percent in November, while economists had expected the unemployment rate to come in unchanged.
However, the unexpected uptick by the unemployment rate came as the labor force jumped by 419,000 people compared to a much more modest 142,000-person increase in the household survey measure of employment.
The Labor Department said average hourly employee earnings payrolls climbed by 11 cents to $27.48 in December, reflecting a 3.2 percent increase compared to the same month a year ago.
The annual rate of growth in average hourly employee earnings in December accelerated from the 3.1 percent increase seen in November, reaching its highest level since April of 2009.
Even as the jobs data offset recent concerns about the U.S. economy, Federal Reserve Chairman Jerome Powell noted the central bank “will be patient” with monetary policy as it watches the economy evolve.
Powell stressed that monetary policy is not on a “preset path” after the Fed raised interest rates four times in 2018 and forecast two rate hikes in the new year.
“Particularly with muted inflation readings that we’ve seen coming in, we will be patient as we watch to see how the economy evolves,” Powell said.
The Fed chief said the central bank is always prepared to significantly shift the stance of monetary policy if incoming economic data does not meet expectations.
Powell’s comments came as part of a joint discussion with former Fed Chairs Janet Yellen and Ben Bernanke at the American Economic Association and Allied Social Science Association annual meeting in Atlanta.
The rally on Wall Street also came after China’s Commerce Ministry said China and the U.S. would hold vice ministerial level trade talks in Beijing this week.
Partly reflecting optimism about trade talks between the U.S. and China, steel stocks turned in some of the market’s best performances. Reflecting the strength in the sector, the NYSE Arca Steel Index surged up by 6.4 percent.
Considerable strength was also visible among biotechnology stocks, as reflected by the 5.3 percent jump by the NYSE Arca Biotechnology Index.
Regeneron Pharmaceuticals (REGN) posted a standout gain after Guggenheim Partners upgraded its rating on the biotech company’s stock to Buy from Neutral.
Oil service stocks also showed a substantial move to the upside on the day, driving the Philadelphia Oil Service Index up by 4.6 percent. The strength in the sector came amid a notable increase by the price of crude oil.
Software, semiconductor and computer hardware stocks also saw significant strength, contributing to the rally by the tech-heavy Nasdaq. Most of the other major sectors also moved higher amid broad based buying interest.
By Adedapo Adesanya
Crude production under the collective Organisation of the Petroleum Exporting Countries (OPEC ) fell in May to its lowest level in at least 37 years as the blockade of Iran by the United States and disruptions in the Persian Gulf, continued to limit output.
According to a Bloomberg survey released on Friday, output from the organisation’s 11 current members, including Nigeria, dropped by 1.22 million barrels per day to 16.33 million barrels per day last month.
Iran accounted for more than half of the decline. The data excludes the United Arab Emirates (UAE), which departed the cartel last month after six decades of membership.
War between a US-Israeli alliance and Iran has reduced oil supplies from the Middle East, largely closing the Strait of Hormuz waterway. Saudi Arabia, Iraq, the UAE and Kuwait have been forced to cut crude production. Iranian shipments face additional pressure following a US blockade of its ports imposed in mid-April.
Iranian output fell by 710,000 barrels per day to a five-year low of 2.34 million barrels per day in May, the survey showed. Central Command reported that US forces have redirected 127 commercial vessels to enforce the blockade of all maritime traffic entering and exiting Iranian ports.
Kuwait recorded the second-largest decline last month, with production falling by 310,000 barrels per day to 490,000 barrels per day, less than one-fifth of pre-war levels. Saudi Arabia, the group’s leader, saw output decrease by 240,000 barrels per day to 6.57 million barrels per day.
The production reductions have not prevented OPEC and its allies from raising quotas over recent months, continuing a year-long process of restoring output halted several years ago.
This comes ahead of a meeting scheduled to be held on Sunday, June 7, where a sub-group of seven members is expected to increase targets by 188,000 barrels again in July. The session is one of four online meetings OPEC and its partners plan to hold that day.
Delegates indicated the alliance has plans for two additional monthly quota increases in August and September. UAE output rose by 300,000 barrels per day to 2.44 million barrels per day in May, according to the survey.
By Aduragbemi Omiyale
The 2025 third quarter Budget Implementation Report from the Budget Office of the Federation has shown that the federal government exceeded the funds allocation for repayment of debts for the first nine months of the fiscal year by about 18 per cent.
In a report by Punch, the sum of N10.74 trillion was budgeted for debt servicing between January and September 2025, but the government used N12.63 trillion for the purpose, N1.90 trillion or 17.65 per cent more than the allocation for the year.
The funds were spent on domestic debts, foreign debts and sinking fund by the central government in nine months.
Business Post reports that for the whole year, the amount approved by the National Assembly and signed by President Bola Tinubu for debt repayments was N14.31 trillion.
Looking at the nine-month figures, domestic debt service gulped N6.23 trillion, exceeding its N5.39 trillion provision, while foreign debt service was N6.30 trillion versus the budget provision of N5.06 trillion.
According to the report, the figures indicated that 67.2 per cent of the federal government’s retained revenue of N18.63 trillion was spent on debt service in the first nine months of 2025. When the sinking fund is included, debt-related payments consumed about 67.8 per cent of revenue.
It was also observed that aggregate federal government revenue underperformed the budget by N12.03 trillion or 39.24 per cent, as actual revenue of N18.63 trillion fell short of the N30.67 trillion projected for the first three quarters.
In the third quarter alone, the government generated N7.70 trillion versus the quarterly target of N10.22 trillion as a result of persistent oil revenue shortfalls, despite stronger non-oil collections.
The debt burden also crowded out capital spending, as total capital expenditure was N3.10 trillion in the first nine months compared with the N17.58 trillion budgeted for the period, indicating that actual debt-related payments were more than four times capital expenditure.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a loss of 1.13 per cent on Thursday, June 4, shrinking the market capitalisation by N30.03 billion to N2.630 trillion from N2.660 trillion on Wednesday.
Similarly, this brought down the NASD Unlisted Security Index (NSI) by 50.19 points to 4,396.08 points from the 4,446.27 points recorded a day earlier.
The loss was influenced by the overpowering of the bulls by the bears, after the bourse closed with two price gainers and three price losers, led by FrieslandCampina Wamco Nigeria Plc, which slumped by N20.03 to sell at N190.38 per unit compared with midweek’s N210.41 per unit. Food Concepts Plc declined by 25 Kobo to trade at N2.50 per share versus the previous day’s N3.00 per share, and Acorn Petroleum Plc crumbled by 2 Kobo to end at N1.32 per unit, in contrast to the preceding session’s N1.34 per unit.
For the gainers, Central Securities Clearing System (CSCS) Plc added N2.93 to close at N78.34 per share compared with the previous price of N75.41 per share, and Afriland Properties Plc gained 80 Kobo to settle at N16.80 per unit versus N16.00 per unit.
There was a slip in the volume of transactions yesterday by 46.8 per cent to 280,714 units from 527,221 units, as the value of trades dropped 66.5 per cent to N21.8 million from the preceding session’s N64.2 million, and the number of deals fell by 8.7 per cent to 42 deals from 46 deals.
Great Nigeria Insurance (GNI) Plc ended the session as 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 CSCS Plc with 64.7 million units traded for N4.4 billion.
GNI Plc also finished the day as the most traded stock by volume on a year-to-date basis with 3.4 billion units valued at N8.4 billion, followed by Infracredit Plc with 2.3 billion units exchanged for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
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