Economy
Futures Climb Off Worst Levels But Still Point to Lower Open
By Investors Hub
The major U.S. index futures have climbed off their worst levels of the morning but currently continue to point to a modestly lower opening on Thursday following the strength seen on Wall Street over the two previous sessions.
A negative reaction to quarterly results from Morgan Stanley (MS) may generate early selling pressure, with the financial giant down by 3.7 percent in pre-market trading.
Morgan Stanley is likely to see initial weakness after reporting fourth quarter earnings and revenues that came in below analyst estimates.
Renewed trade concerns may also weigh on Wall Street after a report from the Wall Street Journal said federal prosecutors are pursuing a criminal investigation of China?s Huawei Technologies for allegedly stealing trade secrets from U.S. partners.
However, the futures regained ground following the release of a report from the Philadelphia Federal Reserve showing a significant acceleration in the pace of growth in regional manufacturing activity in the month of January.
Stocks moved mostly higher over the course of the trading day on Wednesday, adding to the gains posted on Tuesday. With the continued upward move, the major averages reached their best closing levels in a month.
The major averages ended the day in positive territory but well off their highs of the session. The Dow climbed 141.57 points or 0.6 percent to 24,207.16, the Nasdaq rose 10.86 points or 0.2 percent to 7,034.69 and the S&P 500 edged up 5.80 points or 0.2 percent to 2,616.10.
The continued strength on Wall Street partly reflected a positive reaction to upbeat earnings news from financial giants Bank of America (BAC) and Goldman Sachs (GS).
Shares of Bank of America moved sharply higher trading after the company reported fourth quarter results that beat analyst estimates on both the top and bottom lines.
Goldman Sachs also saw substantial strength after reporting fourth quarter earnings and revenues that exceeded expectations.
Buying interest was somewhat subdued, however, as traders continued to express uncertainty about the ongoing government shutdown.
Stocks remained mostly positive after British Prime Minister Theresa May’s government survived a vote of no confidence in parliament.
The U.K.’s House of Commons defeated the motion raised by the leader of the main opposition Labour party Jeremy Corbyn by a vote of 325 to 306. The no-confidence vote came a day after May’s Brexit deal was voted down 432 to 202.
The Federal Reserve also released its Beige Book this afternoon, with the report saying economic activity has continued to increase in most of the U.S. but also hinting at a deterioration in optimism.
The Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts, said eight of the twelve districts reported modest to moderate growth.
Looking ahead, the Beige Book said outlooks generally remained positive, although many districts reported that contacts had become less optimistic.
The drop in optimism reflected increased financial market volatility, rising short-term interest rates, falling energy prices, and elevated trade and political uncertainty.
In other U.S. economic news, the Labor Department released a report showing another steep drop in import prices in the month of December, reflecting a continued nosedive in fuel prices
The Labor Department said import prices tumbled by 1.0 percent in December after plunging by a revised 1.9 percent in November.
Economists had expected import prices to plummet by 1.3 percent compared to the 1.6 percent slump originally reported for the previous month.
The report said export prices also fell by 0.6 percent in December after sliding by a revised 0.8 percent in November. The drop in export prices matched economist estimates.
A separate report from the National Association of Home Builders showed an unexpected improvement in homebuilder confidence in January.
The report said the NAHB/Wells Fargo Housing Market Index rose to 58 in January after slumping to 56 in December. Economists had expected the index to come in unchanged.
The notable decrease seen in the previous month dragged the housing market index down its lowest level since hitting 54 in May of 2015.
Financial stocks turned in some of the market’s best performances on the day following the results from industry giants Bank of America and Goldman Sachs.
Reflecting the strength in the financial sector, the NYSE Arca Broker/Dealer Index and the KBW Bank Index surged up by 2.9 percent and 2.5 percent, respectively.
Notable strength was also visible among steel stocks, resulting in a 1.1 percent advance by the NYSE Arca Steel Index.
On the other hand, computer hardware stocks came under considerable selling pressure, dragging the NYSE Arca Computer Hardware Index down by 1.9 percent.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Wednesday, August 5, as the market witnessed weaker trading activity with only two deals executed.
In the midweek session, the volume of securities exchanged by investors dropped 99.9 per cent to 802 units from the 1.6 million units recorded on Tuesday. The value of securities further decreased by 99.6 per cent to N208,240 from the preceding session’s N47.6 million, and the number of deals significantly went down by 93.9 per cent to two deals from the 33 deals recorded a day earlier.
Great Nigeria Insurance (GNI) Plc remained 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 Central Securities Clearing System (CSCS) Plc with 76.9 million units transacted for N5.5 billion.
GNI Plc was also the most active stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
There were no price gainers or losers yesterday.
As a result, the market capitalisation stood unmoving at N2.739 trillion, while the NASD Security Index (NSI) remained unchanged at 4,563.96 points.
By Adedapo Adesanya
The Naira slid against the US Dollar by N2.28 or 0.17 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Wednesday, August 5, to N1,363.85/$1 from N1,362.55/$1.
The local currency also declined against the Pound Sterling in the official market during the session by N5.97 to close at N1,837.38/£1 compared with Tuesday’s closing rate of N1,831.41/£1, and against the Euro, it crashed by N6.54 to quote at N1,575.25/€1 versus the preceding session’s N1,568.71/€1.
But at the black market, the Nigerian Naira traded flat against the greenback yesterday at N1,400/$1, and also remained unchanged at the GTBank FX desk at N1,373/$1.
The Central Bank of Nigeria (CBN) says rates have narrowed to below two per cent, while the country’s external reserves have risen above $52.5 billion, reflecting the impact of its ongoing monetary and foreign exchange reforms.
CBN Governor Yemi Cardoso, represented by the Acting Director of Corporate Communications and Investor Relations, Mrs Hakama Sidi-Ali, disclosed this on Tuesday during the CBN Fair in Gombe. He noted that reforms introduced since 2023 had significantly reduced the disparity between the official FX market and the parallel market.
“The Naira continues to strengthen, with the spread between official and Bureau de Change rates now below two per cent,” he said, adding that reserves at $52.5 billion were supported by sustained inflows and renewed investor confidence in the economy.
Interbank FX transactions slid as weaker market activities dropped total Dollar volume exchanged to $75.35 million, a 51.8 per cent decline from $156.23 million in turnover quoted at the previous close.
The deals at the NFEM window also fell as data from the central bank put Wednesday’s quote at 82 from 139.
In the cryptocurrency market, major were down as global risk sentiment softened as a key world equity index slipped and chipmakers fell.
The MSCI All Country World Index snapped a five-day run to fall 0.2 per cent as chipmakers retreated on both sides of the Pacific. South Korea’s Kospi, a bellwether for the AI trade, dropped 4.4 per cent.
Ripple (XRP) depleted by 1.7 per cent to $1.05, Binance Coin (BNB) decreased by 1.0 per cent to $594.87, Cardano (ADA) depreciated by 0.9 per cent to $0.1884, TRON (TRX) shrank by 0.2 per cent to $0.3261, Solana (SOL) crumbled by 0.1 per cent to $74.00, and Dogecoin (DOGE) went down by 0.1 per cent to $0.0697.
On the flip side, Ethereum (ETH) gained 2.3 per cent to trade at $1,911.41, and Bitcoin (BTC) rose by 0.8 per cent to $64,759.28, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
By Dipo Olowookere
The domestic stock exchange rebounded by 0.05 per cent on Wednesday on the back of renewed bargain-hunting by investors, though the level of activity waned.
After bleeding for a few days, the Nigerian Exchange (NGX) Limited heaved a sigh of relief yesterday, as the All-Share Index (ASI) gained 109.41 points to close at 244,912.24 points compared with the previous day’s 244,802.83 points, and the market capitalisation garnered N71 billion to settle at N158.087 trillion versus Tuesday’s N158.016 trillion.
Business Post reports that despite the rebound recorded by Customs Street at midweek, the market breadth index remained negative, as there were 20 price advancers and 29 price decliners, implying bearish investor sentiment.
Linkage Assurance appreciated by 9.94 per cent to N1.77, AVA Capital rose by 9.55 per cent to N10.90, Fortis Global Insurance advanced by 7.69 per cent to N2.80, McNichols gained 7.34 per cent to finish at N5.85, and Coronation Insurance surged by 5.51 per cent to N2.49.
Conversely, Honeywell Flour depreciated by 9.94 per cent to N16.30, PZ Cussons gave up 9.94 per cent to trade at N74.75, Zichis crashed by 9.74 per cent to N20.76, Learn Africa slipped by 9.62 per cent to N9.40, and Neimeth tumbled by 8.33 per cent to N8.25.
The busiest equity was FCMB, with a turnover of 369.2 million units valued at N4.1 billion. Chams transacted 46.7 million units worth N201.8 million, First Holdco transacted 43.5 million units for N5.7 billion, Access Holdings sold 29.8 million units worth N778.0 million, and Linkage Assurance exchanged 19.6 million units valued at N33.5 million.
At the close of transactions, market participants bought and sold 824.1 million units worth N25.5 billion in 48,114 deals, in contrast to the 1.6 billion units sold for N28.7 billion in 54,160 deals a day earlier, showing a shortfall in the trading volume, value, and number of deals by 48.49 per cent, 11.15 per cent, and 11.16 per cent, respectively.
