Economy

Disappointing Jobs Data Weighs on Wall Street

Published

5 years ago

02/10/2019

By Investors Hub

The major U.S. index futures are pointing to a lower opening on Wednesday, with stocks likely to see further downside following the sharp pullback seen over the course of the previous session.

Concerns about the economic outlook may continue to weigh on the markets following the release of a report from payroll processor ADP showing a slowdown in the pace of private sector job growth in the month of September.

ADP said private sector employment climbed by 135,000 jobs in September compared to economist estimates for an increase of about 140,000 jobs.

The report also showed a significant downward revision to the increase in private sector jobs in August, which was slashed to 157,000 jobs from the originally reported 195,000 jobs.

?Businesses have turned more cautious in their hiring,? said Mark Zandi, chief economist of Moody?s Analytics. ?If businesses pull back any further, unemployment will begin to rise.?

Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, noted the average monthly job growth for the past three months has fallen to 145,000 from 214,000 in the same time period last year.

On Friday, the Labor Department is scheduled to release its more closely watched monthly jobs report, which includes both public and private sector jobs.

Employment is expected to increase by 140,000 jobs in September after rising by 130,000 jobs in August, while the unemployment rate is expected to hold at 3.7 percent.

After an early move to the upside, stocks showed a significant downturn over the course of the trading session on Tuesday. The major averages pulled back well off their highs of the session and firmly into negative territory.

The major averages moved to the downside going into the close, ending the day near their lows of the session. The Dow plunged 343.79 points or 1.3 percent to 26,573.04, the Nasdaq slumped 90.65 points or 1.1 percent to 7,908.68 and the S&P 500 tumbled 36.49 points or 1.2 percent to 2,940.25.

The sharp pullback on Wall Street came following the release of a report from the Institute for Supply Management showing a continued contraction in U.S. manufacturing activity in the month of September.

The ISM said its purchasing managers index dropped to 47.8 in September from 49.1 in August, with a reading below 50 indicating a contraction in manufacturing activity. Economists had expected the index to inch up to 50.1.

With the unexpected decrease, the index fell to its lowest level since hitting 46.3 in June of 2009, the last month of the Great Recession.

Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee, noted the contraction continues six straight months of softening in manufacturing.

“Global trade remains the most significant issue, as demonstrated by the contraction in new export orders that began in July 2019,” Fiore said. “Overall, sentiment this month remains cautious regarding near-term growth.”

The new export orders index slid to 41.0 in September from 43.3 in August, falling to its lowest level since hitting 39.4 in March of 2009.

Economists noted the disappointing data may also reflect the ongoing strike at General Motors (GM), which has also begun to affect production at suppliers.

Meanwhile, President Donald Trump blamed the weak manufacturing data on the Federal Reserve, which he blasted as “pathetic” in a post on Twitter.

“As I predicted, Jay Powell and the Federal Reserve have allowed the Dollar to get so strong, especially relative to ALL other currencies, that our manufacturers are being negatively affected. Fed Rate too high. They are their own worst enemies, they don’t have a clue. Pathetic!” Trump tweeted.

Brokerage stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Broker/Dealer Index down by 5.9 percent to its lowest closing level in a month.

Online brokers fell sharply after Charles Schwab (SCHW) announced plans to eliminate online trade commissions for U.S. stocks, exchange traded funds and options as part of an escalating price war.

Considerable weakness also emerged among oil service stocks, as reflected by the 3.4 percent nosedive by the Philadelphia Oil Service Index. The weakness among oil service stocks came amid a decrease by the price of crude oil.

Natural gas, networking, banking and chemical stocks also saw significant weakness on the day, moving lower along with most of the other major sectors.

Economy

Afriland Properties Lifts NASD OTC Securities Exchange by 0.04%

Published

1 hour ago

11/12/2024

Adedapo Adesanya

By Adedapo Adesanya

Afriland Properties Plc helped the NASD Over-the-Counter (OTC) Securities Exchange record a 0.04 per cent gain on Tuesday, December 10 as the share price of the property investment rose by 34 Kobo to N16.94 per unit from the preceding day’s N16.60 per unit.

As a result of this, the market capitalisation of the bourse went up by N380 million to remain relatively unchanged at N1.056 trillion like the previous trading day.

But the NASD Unlisted Security Index (NSI) closed higher at 3,014.36 points after it recorded an addition of 1.09 points to Monday’s closing value of 3,013.27 points.

The NASD OTC securities exchange recorded a price loser and it was Geo-Fluids Plc, which went down by 2 Kobo to close at N3.93 per share, in contrast to the preceding day’s N3.95 per share.

During the trading session, the volume of securities bought and sold by investors increased by 95.8 per cent to 2.4 million units from the 1.2 million securities traded in the preceding session.

However, the value of shares traded yesterday slumped by 3.7 per cent to N4.9 million from the N5.07 million recorded a day earlier, as the number of deals surged by 27.3 per cent to 14 deals from 11 deals.

Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units worth N5.3 million.

Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.

Economy

Naira Trades N1,542/$1 as FX Speculators Dump Dollars in Panic

Published

2 hours ago

11/12/2024

Adedapo Adesanya

By Adedapo Adesanya

The Naira continued to appreciate on the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM), gaining 0.7 per cent or N10.23 on Tuesday, December 10 to trade at N1,542.27/$1 compared with the preceding day’s N1,552.50/$1.

The Central Bank of Nigeria (CBN)-backed Electronic Foreign Exchange Matching System (EFEMS) platform introduced to tackle speculation and improve transparency in Nigeria’s FX market has been attributed as the source of the Naira’s appreciation.

Speculators holding foreign currencies, particularly the US Dollar, have seen the value of their money drastically drop due to the appreciation of the local currency. This is forcing them to dump greenback into the system and take the domestic currency alternative- a move that has seen available FX increase.

Equally, the domestic currency improved its value against the Pound Sterling in the official market during the trading day by N6.81 to sell for N1,955.12/£1 compared with Monday’s closing price of N1,961.93/£1 and against the Euro, it gained N10.84 to close at N1,613.00/€1, in contrast to the previous day’s rate of N1,623.84/€1.

Data from the FMDQ Securities Exchange showed that the value of forex transactions significantly increased yesterday by $228.85 million or 257.2 per cent to $401.17 million from the preceding session’s $112.32 million.

However, in the parallel market, the Nigerian currency weakened against the US Dollar on Tuesday by N5 to settle at N1,625/$1 compared with the previous day’s value of N1,620/$1.

In the cryptocurrency market, Dogecoin (DOGE) lost 4.8 per cent to sell at $0.39116, Litecoin (LTC) depreciated by 3.3 per cent to trade at $110.25, Binance Coin (BNB) went south by 2.3 per cent to $681.44, Ethereum (ETH) dropped 1.6 per cent to finish at $3,671.08, and Cardano (ADA) slid by 0.5 per cent to $0.8837

Conversely, Ripple (XRP) jumped by 5.4 per cent to $2.23 amid a continued shift for the coin with its parent company seeing the benefits of a crypto-friendly regulatory environment for US-based companies.

XRP is closely related to Ripple Labs, a high-profile payments company targeted by the SEC in 2020 on allegations of selling the token as a security to U.S. investors. Ripple fully cleared a long-drawn court case in 2024.

Further, Solana (SOL) expanded by 0.8 per cent to $219.75, Bitcoin (BTC) grew by 0.4 per cent to $97,446.95, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.

Economy

Chinese Demand, Europe, Syria Development Buoy Oil Prices

Published

3 hours ago

11/12/2024

Adedapo Adesanya

By Adedapo Adesanya

Oil prices rose on Tuesday, influenced by increasing demand in China, the world’s largest buyer, as well as developments in Europe and Syria, with Brent crude futures closing at $72.19 per barrel after chalking up 5 cents or 0.07 per cent while the US West Texas Intermediate finished at $68.59 a barrel after it gained 22 cents or 0.32 per cent.

China will adopt an “appropriately loose” monetary policy in 2025 as the world’s largest oil importer tries to spur economic growth. This would be the first easing of its stance in 14 years.

Chinese crude imports also grew annually for the first time in seven months, jumping in November on a year-on-year basis.

Speculation about winter demand in Europe also contributed to the rise in prices as the period has been known for high demand.

In Syria, rebels were working to form a government and restore order after the ousting of President Bashar al-Assad, with the country’s banks and oil sector set to resume work on Tuesday.

Although Syria itself is not a major oil producer, it is strategically located and has strong ties with Russia and Iran – two of the world’s largest oil producers.

Market analysts noted that the tensions in the Middle East seem contained, which led market participants to price for potentially low risks of a wider regional spillover leading to significant oil supply disruption.

The market is also looking forward to the US Federal Reserve, which is expected to make a 25 basis point cut to interest rates at the end of its December 17-18 meeting.

This move could improve oil demand in the world’s biggest economy, though traders are waiting to see if this week’s inflation data derails the cut.

Crude oil inventories in the US rose by 499,000 barrels for the week ending November 29, according to The American Petroleum Institute (API). Analysts had expected a draw of 1.30 million barrels.

For the week prior, the API reported a 1.232-million barrel build in crude inventories.

So far this year, crude oil inventories have fallen by roughly 3.4 million barrels since the beginning of the year, according to API data.

Official data from the US Energy Information Administration (EIA) will be released later on Wednesday.

Also, the market is getting relief from the recent decision of selected members of the Organisation of the Petroleum Exporting Countries and its allies, OPEC+ to delay the rollback of 2.2 million barrels per day of oil production cuts to April from January. Another 3.6 million barrels per day in output reductions across the OPEC+ group has been extended to the end of 2026 from the end of 2025.