Economy
Earnings, M&A News May Trigger Buying Interest on Wall Street
By Investors Hub
Early buying interest may be generated in reaction to upbeat earnings news, with fast food giant McDonald?s (MCD) moving sharply higher in pre-market trading after reporting better than expected first quarter results.
This is because the major U.S. index futures are pointing to a higher opening on Monday following the lackluster performance seen last Friday.
The markets may also benefit from news on the merger-and-acquisition front, as T-Mobile (TMUS) announced an agreement to buy Sprint (S) for $26 billion.
Overall trading activity may be somewhat subdued, however, as traders look ahead to several key economic events later this week.
Stocks showed a lack of direction over the course of the trading day on Friday following the rally seen in the previous session. The major averages spent the day bouncing back and forth across the unchanged line before closing roughly flat.
The major averages ended the session on opposite sides of the unchanged line. While the Dow edged down 11.15 points or 0.1 percent to 24,311.19, the Nasdaq crept up 1.12 points or less than a tenth of a percent to 7,119.80 and the S&P 500 inched up 2.97 points or 0.1 percent to 2,669.91.
For the week, the S&P 500 closed marginally lower, while the Dow fell by 0.6 percent and the Nasdaq dipped by 0.4 percent.
The choppy trading on Wall Street came as traders digested a mixed batch of earnings news from several big-name companies.
While tech giants Amazon (AMZN), Microsoft (MSFT), and Intel (INTC) reported better than expected quarterly results, energy giant ExxonMobil (XOM) reported first quarter earnings that came in below analyst estimates.
Uncertainty about the outlook for interest rates may also have kept traders on the sidelines following the release of a Commerce Department reporting showing stronger than expected economic growth in the first quarter.
The report showed GDP growth slowed to 2.3 percent in the first quarter from 2.9 percent in the fourth quarter, although the increase still exceeded economist estimates for 2.0 percent growth.
The slowdown in GDP growth came as consumer spending rose by just 1.1 percent in the first quarter compared to the 4.0 percent jump seen in the fourth quarter.
Meanwhile, a reading on core consumer prices, which exclude food and energy prices, showed that the pace of price growth surged up to 2.5 percent in the first quarter from 1.9 percent in the fourth quarter.
“With clear signs that inflation is rising pretty rapidly now, the Fed will need to tighten more aggressively this year and that will lay the seeds for an economic slowdown starting next year,” said Paul Ashworth, Chief U.S. Economist at Capital Economics.
A separate report from the University of Michigan showed consumer sentiment in the deteriorated by less than initially estimated in the month of April.
The report said the consumer sentiment index for April was upwardly revised to 98.8 from the preliminary reading of 97.8.
The upwardly revised reading exceeded economist estimates of 98.0 but still came in below the final March reading of 101.4.
Reflecting the lackluster performance by the broader markets, most of the major sectors ended the day showing only modest moves.
Retail stocks saw considerable strength, however, with the Dow Jones Retail Index climbing by 1.6 percent. With the gain, the index reached its best closing level in over a month.
Online retail giant Amazon led the retail sector higher after reporting first quarter results that exceeded analyst estimates on both the top and bottom lines.
Significant strength was also visible among telecom stocks, as reflected by the 1.3 percent gain posted by the NYSE Arca Telecom Index. The index is bounced off its lowest closing level in over four months.
While real estate and transportation stocks also saw notable strength, steel stocks showed a substantial move to the downside, dragging the NYSE Arca Steel Index down by 2.1 percent. The index pulled back off its best closing level in well over a month.
U.S. Steel (X) led the sector lower after reporting better than expected first quarter earnings but providing disappointing guidance for the current quarter.
Energy stocks also saw considerable weakness on the day amid a modest decrease by the price of crude oil.
By Adedapo Adesanya
The Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, has said Nigeria may not run to the International Monetary Fund (IMF) for any loan.
He disclosed this in a chat with Arise Television on the sidelines of the ongoing World Economic Forum (WEF) in Davos, Switzerland.
The Minister affirmed that Nigeria has no reason to approach the global lender, adding that the nation is currently relying on relatively cheaper borrowing sources from the World Bank and the African Development Bank (AfDB).
He also argued that Nigeria does not have a balance of payments problem and therefore will not need the short-term financing intervention by the Bretton Wood institution.
“I can imagine the headlines if you saw a situation whereby you were saying Nigeria approaches the IMF for funding. But the reality is that, of course, as a developing country, requiring investment, funds for the government, and investment in key infrastructure to improve the enabling environment for business, we do need funds, and we have the need to borrow.
“We have relied on relatively cheap funding from the multilateral, from the World Bank, from AFDB, and the whole spectrum of funding has been used.”
He also said that the country will tap a range of instruments to help finance this year’s budget deficit and improve the economy.
“We have relied on Nigerian savings by convincing them of the macroeconomic plan of the president, and what it holds in terms of the prospects for growth of the economy and business, and improvement of the business environment.
“Of course, we have approached the Euro bond market, which is, of course, the commercial end of financing. So we’ve done that whole spectrum. When it comes to IMF financing, typically financing from the IMF is to help with short-term balance of payments issues and crises.
“In the case of Nigeria, we have a positive trade balance. We have a positive current account balance. Our reserves are growing. The Governor of the Central Bank recently announced that we had achieved upwards of $10 billion improvement and increase in the reserves.
“We need to use equity. We need to rely on crowding in the savings, particularly of the private sector in Nigeria and the private sector around the world in the form of foreign direct investment. We have to remember that at this time, we have had significant gains in terms of improving the economic environment,” Mr Edun stated.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange rose further by 0.33 per cent on Thursday, January 23, as appetite for unlisted stocks continued to grow.
During the trading session, the value of the bourse went up by N7.6 billion to N1.767 trillion from the N1.76 trillion it closed in the preceding session, as the NASD Unlisted Security Index (NSI) made an additional 10.33 points to wrap the trading day at 3,120.3 points compared with the 3,09.80 points recorded at the midweek session.
Business Post reports that the share price of Okitipupa Plc increased on Thursday by N4.35 to end the day at N47.90 per unit compared with the previous day’s N43.55 per unit, and Food Concepts Plc gained 14 Kobo to settle at N1.74 per share, in contrast to the preceding day’s N1.60 per share.
On the flip side, Impresit Bakolori Plc suffered a decline of 10 Kobo yesterday to trade at 95 Kobo per unit versus Wednesday’s closing price of N1.05 per unit.
When the exchange closed for the session, the volume of securities bought and sold by investors went up by 70,008 per cent to 407.4 million units from the 581,160 units transacted a day earlier.
Equally, the value of shares traded during the session jumped by 16,665.9 per cent to N391.2 million from the N2.3 million recorded at midweek, and the number of deals increased by 65 per cent to 30 deals from the 20 deals posted on Wednesday.
Impresit Bakolori Plc topped the activity chart as the most active stock by value (year-to-date) with 406.5 million units worth N386.1 million, followed by FrieslandCampina Wamco Nigeria Plc with 4.3 million units valued at N170.4 million, and Geo-Fluids Plc with 9.1 million units sold for N44.3 million.
However, Impresit Bakolori Plc snatched the top spot as most active stock by volume (year-to-date) with 406.5 million units worth N386.1 million, as Industrial and General Insurance (IGI) Plc dropped to second position for selling 26.3 million units sold for N6.3 million, and Geo-Fluids Plc occupied third with 9.2 million units valued at N44.3 million.
By Adedapo Adesanya
The Naira recovered about 0.26 per cent or N3.99 against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, January 23 after coming under pressure in recent times.
During the session, the exchange rate of the local currency to its American counterpart closed at N1,548.59/$1 in the official market compared with the previous day’s N1,552.58/$1.
Also, against the Pound Sterling, the domestic currency gained N3.32 yesterday to trade at N1,912.21/£1 compared with Wednesday’s value of N1,915.53/£1 and on the Euro, it improved by N3.82 to sell for N1,617.72/€1 versus N1,613.89/€1.
The forex market may be reacting positively to news that the Central Bank of Nigeria (CBN) would launch a FX Code, which will serve as a guideline to the banking industry to promote ethical conduct of Authorised Dealers in the Nigerian FX market, next week.
The code will further reduce speculative activities, eliminate market distortions, and give the CBN improved oversight capabilities to effectively regulate the market.
The bank noted that authorised dealers would subsequently conduct all FX transactions in the interbank FX market on the EFEMS approved by the apex bank where transactions will be reflected immediately.
However, in the black market segment, the Nigerian Naira lost N5 against the greenback during the session to quote at N1,665/$1, in contrast to midweek’s rate of N1,660/$1.
As for the cryptocurrency market, it was lively yesterday as attention is increasingly centered on potential policy developments under the government of President Donald Trump of the US.
On Thursday, President Trump signed an executive order to ban the digital dollar and promote crypto and AI innovation in the country.
Meanwhile, the US data released recently showed the “all tenant rent” index, which leads the shelter inflation in the Consumer Price Index (CPI), rose at a slower pace last quarter. That has raised hopes that the US Federal Reserve will walk back on its hawkish December rate forecasts.
These helped Ethereum (ETH) gain 5.4 per cent on Thursday to sell at $3,394.79, Solana (SOL) appreciated by 4.4 per cent to $260.86, Cardano (ADA) jumped by 2.9 per cent to $1.00, and Litecoin (LTC) expanded by 2.6 per cent to $116.78.
Further, Bitcoin (BTC) rose by 2.1 per cent to $1o4,978.31, Ripple (XRP) leapt by 0.7 per cent to $3.16, Dogecoin (DOGE) increased by 0.6 per cent to $0.3572, and Binance Coin (BNB) soared by 1.6 per cent to $710.31, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
-
Feature/OPED5 years agoDavos was Different this year
-
Travel/Tourism8 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz2 years agoEstranged Lover Releases Videos of Empress Njamah Bathing
-
Banking7 years agoSort Codes of GTBank Branches in Nigeria
-
Economy2 years agoSubsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking2 years agoFirst Bank Announces Planned Downtime
-
Sports2 years agoHighest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn
-
Technology4 years agoHow To Link Your MTN, Airtel, Glo, 9mobile Lines to NIN