Economy
Easing Trade Tensions May Lead to Strength on Wall Street
By Investors Hub
The major U.S. index futures are pointing to a higher opening on Monday, with stocks likely to add to the strong gains posted last week.
Early buying interest may be generated amid easing trade tensions ahead of a second round of trade talks between the U.S. and China this week.
Ahead of the meeting, President Donald Trump indicated in a post on Twitter that he is working with Chinese President Xi Jinping to get Chinese telecom equipment maker ZTE Corp. ?back into business, fast.?
ZTE has been crippled by a ban on U.S. supplies to its business, and sources briefed on the matter told Reuters that China has demanded the issue be resolved as a prerequisite for broader trade negotiations.
In a subsequent tweet, Trump expressed optimism about trade talks with China despite claiming past negotiations have been one-sided in favor of Beijing.
?China and the United States are working well together on trade, but past negotiations have been so one sided in favor of China, for so many years, that it is hard for them to make a deal that benefits both countries,? Trump tweeted. ?But be cool, it will all work out!?
Overall trading activity may be somewhat subdued, however, with a lack of major U.S. economic data likely to keep some traders on the sidelines.
After moving notably higher over the course of trading last Wednesday and Thursday, stocks turned in a lackluster performance during trading on Friday. The major averages spent the day bouncing back and forth across the unchanged line.
The Dow and the S&P 500 reached their best closing levels in nearly two months, but the Nasdaq closed marginally lower. While the Nasdaq edged down 2.09 points or less than a tenth of a percent to 7,402.88, the Dow climbed 91.64 points or 0.4 percent to 24,831.17 and the S&P 500 rose 4.65 points or 0.2 percent to 2,727.72.
Despite the mixed performance on the day, the major averages all moved sharply higher for the week. The Nasdaq surged up by 2.7 percent, and the Dow and the S&P 500 jumped by 2.3 percent and 2.4 percent, respectively.
The markets initially benefited from the upward momentum seen in the two previous sessions, but buying interest waned as traders seemed wary of continuing to pick up stocks.
Traders were also digesting President Donald Trump’s outline of his plan to reduce high drug prices, which he has previously described as a top priority for his administration.
In remarks from the White House rose garden, Trump suggested the government was partly to blame for high drug prices but also criticized drug lobbyists and so-called “middle men.”
Trump announced several steps his administration will take to reduce drug prices, including giving Medicare Part D plans better tools to negotiate discounts.
Reports earlier in the day indicated Trump’s reforms of Medicare would stop short of allowing the government to negotiate directly with drug makers.
The president also indicated he would seek to increase competition in drug markets, develop new incentives for drug makers to lower list prices and develop options to lower patients’ out-of-pocket spending.
On the U.S. economic front, the Labor Department released a report showing import prices increased by less than expected in the month of April.
The Labor Department said import prices rose by 0.3 percent in April after edging down by a revised 0.2 percent in March. Economists had expected import prices to climb by 0.5 percent.
Meanwhile, the report said export prices increased by 0.6 percent in April after rising by 0.3 percent in March. Export prices had been expected to rise by another 0.3 percent.
A separate report released by the University of Michigan showed consumer sentiment unexpectedly held steady in early May.
The report said the preliminary reading on the consumer sentiment index for May came in at 98.8, unchanged from the final April reading. Economists had expected the index to edge down to 98.5.
Many of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.
Biotechnology stocks showed a significant move to the upside, however, with the NYSE Arca Biotechnology Index jumping by 1.8 percent.
Healthcare and pharmaceutical stocks also saw considerable strength as traders reacted to Trump’s plan to reduce drug prices.
On the other hand, tobacco stocks moved notably lower on the day, dragging the NYSE Arca Tobacco Index down by 1 percent.
By Adedapo Adesanya
Nigeria ranked as Africa’s leading destination for upstream oil and gas investment in 2024, new research from market intelligence firm, Wood Mackenzie, has shown, accounting for three out of four Final Investment Decisions (FIDs) announced by global oil and gas majors, totaling $13.5 billion.
The FIDs announced within the Nigerian market included Shell’s $122 million investment in the Iseni Gas Project, TotalEnergies’ $566 million commitment to the Ubeta Gas Project and Shell’s approval of the Bonga North Tranche 1 project valued at around $5 billion.
According to the Special Adviser to President Bola Tinubu on Energy, Ms Olu Verheijen, these investments reflected Nigeria’s ongoing efforts to unlock its hydrocarbon potential through investor-friendly policies and strategic global partnerships.
Last year, Nigeria introduced several initiatives to create a conducive environment for oil and gas investors, including new tax incentives aimed at attracting up to $10 billion in natural gas investments.
Nigeria, which is Africa’s largest oil producer, also offered tax relief for gas investors, reducing corporate income tax and extending capital allowance benefits – for deepwater gas projects.
Other policies include the Presidential Directive on Local Content Compliance Requirements 2024 to address the reduction in oil and gas investments caused by high operating costs compared to global markets.
Also, the Presidential Directive on Reduction of Petroleum Sector Contracting Costs and Timelines 2024 reduces the time spent to award contracts for oil and gas projects.
In addition to the directives, Nigeria also launched its 2024 oil and gas licensing round, offering 19 blocks for exploration, demonstrating its commitment to continued collaboration with local, regional and international partners.
Market analysts note that with this momentum, further FIDs are anticipated, including TotalEnergies’ expected $750 million commitment to the Ima Shallow Gas Project in 2025.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.22 per cent decline on Monday, January 20, with the market capitalisation shedding N2.35 billion to close at N1.073 trillion compared with the preceding session’s N1.075 trillion and the NASD Unlisted Security Index (NSI) going down by 6.79 points to wrap the session at 3,105.12 points compared with 3,111.91 points recorded in the previous session.
It was observed that the loss recorded on the first trading day of the week was triggered by UBN Property Plc, which crashed by 20 Kobo to trade at N2.00 per share versus last Friday’s N2.20 per share.
However, the share price of Industrial and General Insurance (IGI) Plc went up by 4 Kobo to 40 Kobo per unit from 36 Kobo per unit, it could not stop the bourse from going down at the close of transactions.
The activity chart showed that on Monday, the volume of securities traded by investors increased by 57.9 per cent to 767,610 units from the 486,215 units traded in the preceding session, while the value of shares traded yesterday slumped by 17.7 per cent to N2.3 million from the N2.8 million recorded in the preceding trading day, as the number of deals declined by 14.3 per cent to 12 deals from the 14 deals carried out in the previous trading day.
At the close of transactions, FrieslandCampina Wamco Nigeria Plc remained the most active stock by value on a year-to-date basis with the sale of 4.1 million units worth N162.9 million, followed by Geo-Fluids Plc with a turnover of 9.1 million units valued at N44.0 million, and 11 Plc with the sale of 55,358 for N14.5 million.
Also, Industrial and General Insurance (IGI) Plc closed the day as the most active stock by volume on a year-to-date basis with 25.3 million units sold for N5.9 million, Geo-Fluids Plc came next with 9.1 million units valued at N44.0 million, and FrieslandCampina Wamco Nigeria Plc with 4.1 million units worth N162.9 million.
By Adedapo Adesanya
The value of the Naira weakened against the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday, January 20 amid FX pressures associated with this period.
Most people who came into the country for Christmas and New Year holidays are already going back and are in need of forex, putting pressure on the local currency.
Also, the poor performance of the domestic currency could be attributed to end to the 42-day access granted by the Central Bank of Nigeria (CBN) to Bureaux de Change (BDC) operators to buy forex at official price.
According to data from the FMDQ Securities Exchange, the Nigerian Naira lost 0.16 per cent or N2.47 on the greeback yesterday to sell at N1,550.05/$1, in contrast to last Friday’s rate of N1,547.58/$1.
Similarly, the Naira slumped against the Pound Sterling in the spot market on Monday by N23.39 to trade at N1,906.98/£1 versus N1,883.59/£1 and depreciated against the Euro by N23.14 to sell for N1,613.48/€1 compared with last Friday’s N1,590.34/€1.
However, in the parallel market, the Nigerian currency improved its value against the Dollar during the session by N5 to quote at N1,665/$1 compared with the previous session’s N1,670/$1.
As for the cryptocurrency market, it turned red yesterday as the US President, Mr Donald Trump, didn’t bring up the much-expected subject of crypto in his inauguration speech on Monday afternoon.
Mr Trump had promised a far more friendly crypto policy stance than the previous administration but in the long speech that announced his plans in the coming days, he didn’t make mention of Bitcoin or crypto.
Just over the weekend, the President ignited a speculative frenzy with the Friday evening launch of the Trump meme coin, which was shortly followed by a meme coin associated with his wife, Melania.
Dogecoin (DOGE) crumbled yesterday by 6.3 per cent to $0.3419, Solana (SOL) slumped by 4.7 per cent to $235.32, Cardano (ADA) fell by 3.6 per cent to $0.9777, and Litecoin (LTC) moderated by 1.9 per cent to $114.98.
Further, Ethereum (ETH) went down by 1.7 per cent to $3,241.36, Binance Coin (BNB) retreated by 1.4 per cent to $693.30, Ripple (XRP) depreciated by 1.2 per cent to $3.06, and Bitcoin (BTC) tumbled by 0.8 per cent to $101,746.99, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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