Economy
Economic Data, Earnings News in Focus on Wall Street
By Investors Hub
The major US index futures are pointing to a roughly flat opening on Monday as traders may be reluctant to make any significant moves.
Traders may stick to the sidelines ahead of the release of earnings news from a number of big-name companies later this week.
Bank of America (BAC), Goldman Sachs (GS), UnitedHealth (UNH), IBM (IBM), American Express (AXP), Microsoft (MSFT), Visa (V), and General Electric (GE) are among the companies due to report their quarterly results this week.
Stocks moved mostly higher over the course of the trading session on Friday, extending the upward trend seen over the past several sessions. With the gains on the day, the Dow and the S&P 500 reached new record closing highs.
The major averages pulled back off their best levels going into the close but remained firmly positive. The Dow rose 84.65 points or 0.4 percent to 21,637.74, the Nasdaq advanced 38.03 points or 0.6 percent to 6,312.47 and the S&P 500 climbed 11.44 points or 0.5 percent to 2,459.27.
For the week, the Nasdaq surged up by 2.6 percent, while the Dow and the S&P 500 jumped by 1 percent and 1.4 percent, respectively.
The strength on Wall Street came following the release of several key economic reports, with the data suggesting that the Federal Reserve will not be in any hurry to raise interest rates.
Before the start of trading, the Commerce Department released a report showing retail sales unexpectedly decreased for the second consecutive month in June.
The Commerce Department said retail sales fell by 0.2 percent in June after edging down by a revised 0.1 percent in May. The continued drop in sales surprised economists, who had expected sales to inch up by 0.1 percent.
Excluding auto sales, retail sales still dipped by 0.2 percent in June following the 0.3 decline seen in May. Ex-auto sales were expected to rise by 0.2 percent.
A separate report released by the Labor Department showed consumer prices came in unchanged in the month of June.
The Labor Department said its consumer price index was flat in June after edging down by 0.1 percent in May. Economists had expected consumer prices to inch up by 0.1 percent.
Excluding food and energy prices, core consumer prices crept up by 0.1 percent for the third consecutive month. Core prices had been expected to rise by 0.2 percent.
The report said consumer prices in June were up by 1.6 percent compared to the same month a year ago, a deceleration from the 1.9 percent year-over-year growth in May.
The annual rate of growth in core consumer prices came in at 1.7 percent in June, unchanged from the previous month.
“With its dual mandate, the Fed needs to take into account the decline in the unemployment rate this year as well as the drop back in core inflation,” said Paul Ashworth, Chief U.S. Economist at Capital Economics.
“For that reason, we still expect the Fed to continue raising interest rates in the second half of this year,” he added. “Nevertheless, the odds of a September rate hike are fading.”
Meanwhile, the Federal Reserve released a report showing industrial production increased by slightly more than anticipated in the month of June.
The Fed said industrial production climbed by 0.4 percent in June after inching up by a revised 0.1 percent in May. Economists had expected production to rise by 0.3 percent.
Weakness among financial stocks limited the upside for the markets, with Wells Fargo (WFC), Citigroup (C), and JPMorgan Chase (JPM) all closing lower after reporting their second quarter results.
Electronic storage stocks showed a strong move to the upside over the course of the session, driving the NYSE Arca Disk Drive Index up by 2.1 percent. The index climbed to its best closing level in over a month.
Within the storage sector, NetApp (NTAP) posted a standout gain, surging up by 5.5 percent to its best closing level in over three years.
Significant strength was also visible among gold stocks, as reflected by the 1.5 percent gain posted by the NYSE Arca Gold Bugs Index. The strength in the sector came amid a notable increase by the price of gold. Oil service stocks also saw considerable strength amid an increase by the price of crude oil.
Telecom, semiconductor, and tobacco stocks also saw notable strength on the day, while some weakness was visible among banking stocks.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its stay in the south for the fourth consecutive session after it shed 1.18 per cent on Friday, March 13.
The unlisted securities market recorded a loss despite closing without a price decliner, and ending with two price gainers led by Geo Fluids Plc, which gained 1o Kobo to sell at N3.10 per share compared with the previous day’s N3.00 per share. Industrial and General Insurance (IGI) Plc appreciated during the session by 2 Kobo to trade at 54 Kobo per unit versus Thursday’s closing price of 52 Kobo per unit.
When the market closed for the day, the market capitalisation lost N29.83 billion to close at N2.489 trillion compared with the N2.519 trillion it finished a day earlier, and the NASD Unlisted Security Index (NSI) crashed by 49.84 points to 4,160.46 points from 4,210.31 points.
Market activity improved yesterday, as the volume of transactions rose 179.5 per cent to 10.4 million units from 3.7 million units, but the value of trades declined by 68.4 per cent to N29.9 million from N95.0 million, while the number of deals weakened by 11.5 per cent to 46 deals from 52 deals.
Central Securities Clearing Systems (CSCS) Plc remained the most active stock by value on a year-to-date basis with 38.4 million units worth N2.4 billion, Okitipupa Plc followed with 6.4 million units traded at N1.1 billion, and FrieslandCampina Wamco Nigeria Plc transacted 6.3 million units for N584.3 million.
Resourcery Plc ended the trading session as the most traded stock by volume on a year-to-date basis with 1.1 billion units valued at N415.6 million, trailed by Geo-Fluids Plc with 130.8 million units valued at N504.5 million, and CSCS Plc with 38.4 million units worth N2.4 billion.
By Adedapo Adesanya
The Naira continued to claw back some gains against the Dollar in the different segments of the foreign exchange (FX) market, as its value was strengthened on Friday.
In the black market, it gained N10 against the United States Dollar yesterday to close at N1,400/$1 compared with the preceding day’s rate of N1,410/$1, and at the GTBank forex counter, it chalked up N6 to close at N1,385/$1, in contrast to the N1,391/$1 it was traded a day earlier.
Similarly, in the Nigerian Autonomous Foreign Exchange Market (NAFEX), it appreciated against the greenback during the session by N5.28 or 0.38 per cent to quote at N1,366.23/$1 versus Thursday’s closing price of N1,371.51/$1.
It also improved its value against the Pound Sterling in the official market on Friday by N21.81 to settle at N1,812.99/£1 compared with the previous day’s N1,834.80/£1, and gained N13.86 against the Euro to sell at N1,568.03/€1 versus N1,581.89/€1.
Pressure eased further on the FX market as the Central Bank of Nigeria (CBN) continued interventionist operations this week, selling Dollars to banks to boost liquidity after a $500 million boost last week.
This was complemented by inflows from foreign investors, exporters and non-bank corporates, among others, while Nigeria’s gross external reserves remained above $50 billion, the highest since 2009.
The Governor of the apex bank, Mr Yemi Cardoso, also eased fears of a Naira devaluation, saying the country’s financial system has been strengthened by reforms.
Regardless, external pressure looms as the US Dollar strengthened globally due to its war with Iran, now ongoing for three weeks.
Meanwhile, the cryptocurrency market was largely down as traders and investors continue to align with current realities.
The market is adapting to the conflict in real time. Early in the war, every headline produced an outsized reaction because nobody could price the tail risk. Now, traders have a framework where strikes happen, oil spikes and bitcoin dips only to recover again.
Cardano (ADA) depreciated by 3.8 per cent to $0.2623, Dogecoin (DOGE) lost 1.7 per cent to finish at $0.0948, Ripple (XRP) slumped 1.5 per cent to $1.39, Solana (SOL) dropped 1.4 per cent to sell for $87.33, Binance Coin (BNB) went down by 1.3 per cent to $653.58, Bitcoin (BTC) declined by 1.1 per cent to $70,670.63, and Ethereum (ETH) decreased by 0.9 per cent to $2,078.78.
However, TRON (TRX) appreciated by 1.7 per cent to $0.2941, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
By Adedapo Adesanya
The price of the major crude oil grade, Brent crude oil, closed above $100 on Friday for the second consecutive session, as the Iran war heads toward its third week, with oil tanker traffic through the Strait of Hormuz still effectively at a standstill.
It gained 2.67 per cent or $2.68 during the trading day to close at $103.14 per barrel, while the US West Texas Intermediate (WTI) crude oil grade appreciated by 3.11 per cent or $2.98 to settle at $98.71 per barrel.
Brent futures were up about 10 per cent for the week following the 27 per cent rise seen last week, which marked the biggest weekly gain in oil prices since the COVID-19 pandemic in 2020. WTI futures, which saw their best week since 1983 last week, ended the week more than 8 per cent higher.
US President Donald Trump said American forces launched a major bombing raid on Iran’s strategic Kharg Island, targeting military facilities on the key Persian Gulf outpost while warning Iran that its vital oil infrastructure could be destroyed if shipping in the Strait of Hormuz is disrupted.
The terminal accounts for roughly 90 per cent of Iranian crude shipments, loading millions of barrels per day onto tankers bound largely for Asian markets.
The US and Israel’s strikes in the conflict have largely targeted Iranian military and nuclear infrastructure. Oil facilities elsewhere in Iran have been hit, but Kharg’s massive storage tanks, jetties, and pipelines had remained untouched until the latest strike.
Iran’s new supreme leader, Mojtaba Khamenei, vowed to keep fighting in a message delivered via state television.
There have been a number of attacks on foreign ships in or near the Strait, feeding into concerns that a prolonged war could translate to a global economic shock.
Prices are rising despite the US and its allies rolling out some measures to keep a lid on energy costs.
The International Energy Agency (IEA) has agreed to release 400 million stockpiled barrels, the largest such action in history.
The US has issued a 30-day waiver for India to purchase sanctioned oil from Russia. President Donald Trump is considering loosening rules under the Jones Act that require American ships to transport goods between domestic ports, including oil and gas, in an effort to lower costs.
Traders are continuing to monitor developments in the Middle East.
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