Economy
Futures Pointing To Early Strength On Wall Street
By Investors Hub
The major U.S. index futures are pointing to a higher opening on Wednesday after ending the previous session modestly lower. After disappointing earnings news from Goldman Sachs (GS) weighed on the markets on Tuesday, the markets may benefit from upbeat news from Morgan Stanley (MS).
Overall trading activity on the day may be somewhat subdued, however, with lingering geopolitical uncertainty keeping some traders on the sidelines.
Stocks saw modest weakness during trading on Tuesday following the rally seen on Monday. The major averages came under pressure in morning trading but regained some ground as the day progressed.
While the major averages closed in negative territory, they were well off their worst levels of the day. The Dow fell 113.64 points or 0.6 percent to 20,523.28, the Nasdaq edged down 7.32 points or 0.1 percent to 5,849.47 and the S&P 500 dipped 6.82 points or 0.3 percent to 2,342.19.
Negative sentiment was generated in reaction to quarterly results from Goldman Sachs (GS), as the financial giant reported weaker than expected first quarter earnings on disappointing trading revenue.
Shares of Goldman Sachs moved notably lower on the news, slumping by 4.7 percent to their lowest closing level in well over four months.
Geopolitical concerns also generated some selling pressure after North Korean Vice-Foreign Minister Han Song-ryol told the BBC the communist nation plans to conduct weekly missile tests.
Han also warned that the U.S. would face “all out war” if it responded to the continued missile tests with military action.
Vice President Mike Pence has said “all options are on the table” to address North Korea’s missile and nuclear testing programs, declaring that “the era of strategic patience is over.”
Uncertainty about the outcome of the French presidential election also weighed on the markets ahead of the first round of voting on Sunday.
News that U.K. Prime Minister Theresa May has called for early elections has added to the political uncertainty in Europe.
On the U.S. economic front, the Commerce Department released a report showing a sharp pullback in new residential construction in the month of March.
The report said housing starts plunged by 6.8 percent to an annual rate of 1.215 million in March from an upwardly revised 1.303 million in February. Economists had expected housing starts to drop by 2 percent.
Meanwhile, the Commerce Department said building permits, an indicator of future housing demand, jumped by 3.6 percent to a rate of 1.260 million in March from a revised 1.216 million in February. Building permits had been expected to climb by 3.1 percent.
A separate report from the Federal Reserve showed that industrial production increased in line with economist estimates in March, reflecting a substantial rebound in utilities output.
The report said industrial production climbed by 0.5 percent in March after inching up by 0.1 percent in February. The increase in production matched the consensus estimate.
Biotechnology stocks showed a significant move to the downside on the day, dragging the NYSE Arca Biotechnology Index down by 1.3 percent. The index gave back ground after closing higher in the three previous sessions.
Within the biotech sector, Arena Pharmaceuticals (ARNA) posted a steep loss after pricing an underwritten public offering of 60, million shares of its common stock at $1.15 per share.
Considerable weakness was also visible among pharmaceutical stocks, as reflected by the 1.3 percent drop by the NYSE Arca Pharmaceutical Index. With the decline, the index fell to a two-month closing low.
Healthcare giant Johnson & Johnson (JNJ) led the way lower after reporting better than expected first quarter earnings but on revenues that came in below estimates.
Energy, steel, and banking stocks saw also some weakness on the day, while most of the other major sectors ended the session showing more modest moves.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange rallied by 1.48 per cent on Monday, March 9, spurred by six price gainers at the close of business.
The sextuplet was led by Nipco Plc, which added N28.00 to trade at N313.00 per unit versus the previous price of N285.00 per unit, FrieslandCampina Wamco Nigeria Plc appreciated by N8.65 to sell for N133.85 per share versus last Friday’s closing value of N125.20 per share, Central Securities Clearing System (CSCS) Plc increased by N2.43 to N83.78 per unit from N81.35 per unit, Afriland Properties Plc gained 75 Kobo to close at N19.50 per share compared with the previous N18.75 per share, UBN Property Plc jumped by 21 Kobo to close at N2.38 per unit compared with the preceding session’s N2.17 per unit, and Industrial and General Insurance (IGI) Plc rose 5 Kobo to sell at 52 Kobo per share versus 47 Kobo per share.
As a result, the market capitalisation added N37.22 billion to settle at N2.556 trillion versus the preceding session’s N2.519 trillion, and the NASD Unlisted Security Index (NSI) went up by 62.20 points to 4,273.12 points from 4,201.57 points.
Yesterday, the volume of securities decreased by 67.6 per cent to 1.1 million units from 3.4 million units, the value of securities depleted by 24.3 per cent to N47.3 million from N62.4 million, and the number of deals went down by 18.2 per cent to 36 deals from 44 deals.
The most traded stock by value on a year-to-date basis was CSCS Plc with 37.6 million units valued at N2.3 billion, trailed by Okitipupa Plc with 6.3 million units sold for N1.1 billion, and MRS Oil Plc with the sale of 3.4 million units for N506.8 million.
As for the most traded stock by volume on a year-to-date basis, it was Resourcery Plc with 1.05 billion units worth N408.7 million, followed by Geo-Fluids Plc with 123.1 million units traded for N481.6 million, and CSCS Plc with 37.6 million units transacted for N2.3 billion.
By Adedapo Adesanya
Oil prices fell in the later session of Monday after initially crossing the $100 per barrel mark as the escalating Iran war by the United States and Israel squeezed world energy supplies, boosted the Dollar, and dampened hopes of interest-rate cuts.
Earlier, Brent crude futures climbed to a high of $119.50 per barrel, and the US West Texas Intermediate (WTI) to $117.48 a barrel. However, it dropped later after US President Donald Trump suggested that the US conflict with Iran could soon wind down.
Data gathered by Business Post showed that the price of the Brent crude grade dropped 5.4 per cent to $87.68 per barrel, and the US WTI lost 7.4 per cent to trade at $84.21 a barrel.
President Trump is expected to review a set of options to tame oil prices, reflecting White House worries that the surge in oil prices will hurt US businesses and consumers ahead of the November midterm elections, when the ruling Republicans are hoping to retain control of Congress.
Reuters reported that the US is discussing with counterparts from the Group of Seven major economies a possible joint release of crude oil from strategic reserves. It also reported they are weighing other options, including restricting US exports, intervening in oil futures markets, waiving some federal taxes and lifting requirements under a US law called the Jones Act that domestic fuel must move only on US-flagged ships.
The Trump administration officials are also exercising diplomatic pressure on Gulf allies to help restore production and shipping of oil.
Market analysts have warned that Gulf producers are only able to sustain normal production for roughly 25 days if the Strait is completely blocked.
The expanding US-Israeli war with Iran led some major Middle Eastern oil producers to cut supplies due to fears of prolonged disruption to shipping through the Strait of Hormuz chokepoint.
Oil-driven inflation fears and delayed rate-cut expectations likely strengthened US yields and the Dollar, outweighing safe-haven demand.
The recent 10-day conflict in Iran is beginning to ripple through the global aviation industry, threatening what had been a strong outlook for aircraft demand.
JP Morgan has warned that Iran’s oil production could be slashed in half and oil exports could virtually stall if the US-Israel seize Iran’s Kharg Island, worsening the ongoing global oil shock. The island is regarded as the backbone of Iran’s oil infrastructure, handling approximately 90 per cent of its crude exports.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited ended its first trading session of this week on a positive note after it improved by 0.12 per cent on Monday.
Buying pressure across key sectors of Customs Street influenced the growth achieved yesterday despite the global instability triggered by the war in Iran by the United States and Israel.
Energy stocks on the local bourse have continued to benefit from the crisis, which has raised the price of crude oil above $100 per barrel.
The energy index was up by 2.07 per cent during the session, and the consumer goods sector appreciated by 0.58 per cent, while the insurance and banking indices depreciated by 3.05 per cent and 0.99 per cent, respectively.
When the closing gong was struck on Monday, the All-Share Index (ASI) increased by 228.82 points to 197,196.97 points from 196,968.15 points, and the market capitalisation garnered N147 billion to settle at N126.584 trillion compared with last Friday’s N126.437 trillion.
The trio of Conoil, Legend Internet, and Omatek advanced by 10.00 per cent each to N185.90, N7.04, and N2.42 apiece, as NGX Group chalked up 9.97 per cent to trade at N166.00, and Oando appreciated by 9.96 per cent to N54.65.
Conversely, Aluminium Extrusion shrank by 10.00 per cent to N13.95, SCOA Nigeria declined by 9.90 per cent to N30.95, RT Briscoe lost 9.87 per cent to finish at N10.87, Sunu Assurances crashed by 9.81 per cent to N4.32, and Union Dicon lost 9.76 per cent to settle at N14.80.
The most active stock for the session was Fortis Global Insurance with 120.4 million units worth N174.1 million, Access Holdings exchanged 32.2 million units valued at N818.5 million, Chams traded 28.3 million units for N110.5 million, Zenith Bank transacted 25.3 million units worth N2.4 billion, and Japaul sold 21.6 million units valued at N82.1 million.
At the close of trades, market participants bought and sold 762.5 million shares for N31.2 billion in 86,488 deals during the session, in contrast to the 586.2 million shares valued at N30.6 billion traded in 62,699 deals in the preceding session, implying a spike in the trading volume, value, and number of deals by 30.08 per cent, 1.96 per cent, and 37.94 per cent apiece.
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