Economy
Futures Pointing to Pullback on Wall Street
By Investors Hub
The major U.S. index futures are pointing to a lower opening on Tuesday following the strong upward move seen last week.
Profit taking may contribute to initial weakness on Wall Street, although trading activity may remain somewhat subdued ahead of the release of the minutes of the latest Federal Reserve meeting on Wednesday.
Stocks moved mostly higher in morning trading on Friday but turned mixed over the course of the session. The major averages eventually ended the day on opposite sides of the unchanged line.
While the Dow and the S&P 500 closed higher for sixth consecutive session, the tech-heavy Nasdaq dipped 16.96 points or 0.2 percent to 7,239.47. The Dow edged up 19.01 points or 0.1 percent to 25,219.38 and the S&P 500 inched up 1.02 points or less than a tenth of a percent to 2,732.22.
Despite the mixed performance on the day, the major averages all moved sharply higher for the week. The Nasdaq spiked by 5.3 percent, while the Dow and the S&P 500 both surged up by 4.3 percent.
The mixed close on Wall Street came after Special Counsel Robert Mueller’s office revealed that a federal grand jury has indicted several Russian nationals for allegedly interfering in the 2016 presidential election.
The indictment does not allege collusion between the Russians and President Donald Trump’s campaign but could still cause headaches for the president.
The strength seen earlier in the day came as traders once again shrugged off further indications of rising inflation, with a report from the Labor Department showing import prices jumped by more than expected in the month of January.
The Labor Department said import prices surged up by 1.0 percent in January after edging up by a revised 0.2 percent in December.
Economists had expected import prices to climb by 0.6 percent compared to the 0.1 percent uptick originally reported for the previous month.
The report also said export prices increased by 0.8 percent in January after inching up by a revised 0.1 percent in December.
Export prices had been expected to rise by 0.3 percent compared to the 0.1 percent drop originally reported for the previous month.
A separate report from the Commerce Department showed a much bigger than expected rebound in new residential construction in January.
The Commerce Department said housing starts soared by 9.7 percent to an annual rate of 1.326 million in January after tumbling by 6.9 percent to a revised 1.209 million in December.
Economists had expected housing starts to climb by 3.5 percent to an annual rate of 1.234 million from the 1.192 million originally reported for the previous month.
Building permits, an indicator of future housing demand, also surged up by 7.4 percent to an annual rate of 1.396 million in January from the revised December rate of 1.300 million.
The University of Michigan also released a report unexpectedly showing a significant improvement in consumer sentiment in the month of February.
The preliminary reading on the consumer sentiment index for February came in at 99.9, up from the final January reading of 95.7. Economists had expected the index to edge down to 95.5.
“Consumer sentiment rose in early February to its second highest level since 2004 despite lower and much more volatile stock prices,” said Richard Curtin, the survey’s chief economist.
Curtin said stock market gyrations were overshadowed by rising incomes, employment growth, and net favorable perceptions of tax reform.
Most of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.
Pharmaceutical stocks saw considerable strength, however, with the NYSE Arca Pharmaceutical Index climbing by 1 percent.
Biopharmaceutical company Alkermes (ALKS) posted a standout gain, surging up by 5.5 percent to a two-year closing high.
On the other hand, substantial weakness was visible among gold stocks, as reflected by the 2.3 percent slump by the NYSE Arca Gold Bugs Index. Gold stocks came under pressure despite a modest increase by the price of the precious metal.
By Dipo Olowookere
A 1.08 per cent growth was further printed by the Nigerian Exchange (NGX) Limited on Friday on improved appetite for Nigerian stocks.
Data showed that the insurance sector lost 0.61 per cent yesterday due to profit-taking as the energy space gave up 0.08 per cent, while the commodity counter closed flat.
However, the industrial goods landscape appreciated by 2.06 per cent, the banking index improved by 1.31 per cent, and the consumer goods sector expanded by 0.83 per cent.
At the close of business on Customs Street, the All-Share Index (ASI) increased by 1,563.92 points to 147,040.07 points from 145,476.15 points and the market capitalisation went up by N996 billion to N93.722 trillion from N92.726 trillion.
UAC Nigeria led the advancers’ log yesterday after it grew by 10.00 per cent to N96.80, Transcorp Hotels jumped by 9.71 per cent to N172.80, Royal Exchange appreciated by 8.89 per cent to N1.96, Ikeja Hotel soared by 8.74 per cent to N31.10, and Veritas Kapital leapt by 8.07 per cent to N1.74.
On the flip side, Union Dicon declined by 10.00 per cent to N6.30, ABC Transport slipped by 9.88 per cent to N3.10, AXA Mansard depreciated by 7.19 per cent to N12.90, FTN Cocoa lost 4.62 per cent to trade at N4.75, and Guinea Insurance dropped 3.36 per cent to finish at N1.15.
A total of 38 stocks ended on the gainers’ table and 17 stocks finished on the losers’ table, representing a positive market breadth index and strong investor sentiment.
Traders transacted 361.6 million equities for N14.8 billion in 21,051 deals yesterday versus the 1.9 billion equities worth N19.2 billion traded in 23,369 deals a day earlier, showing a decline in the trading volume, value, and number of deals by 80.97 per cent, 22.92 per cent, and 14.20 per cent, respectively.
The busiest stock for the session was Zenith Bank with 59.5 million units worth N3.6 billion, Access Holdings traded 46.1 million units valued at N973.0 million, Fidelity Bank exchanged 29.4 million units for N560.4 million, FCMB transacted 27.9 million units worth N293.9 million, and Tantalizers sold 13.0 million units valued at N29.8 million.
By Adedapo Adesanya
Energy stocks influenced the 4.76 per cent loss recorded by the NASD Over-the-Counter (OTC) Securities Exchange on Friday, December 5.
The culprits were the duo of 11 Plc and Nipco Plc,with the former shedding N32.17 to end at N291.83 per share compared with the previous day’s N324.00 per share, and the latter down by N21.00 to sell at N195.00 per unit versus the previous session’s N216.00 per unit.
Consequently, the NASD Unlisted Security Index (NSI) slumped by 170.16 points to 3,401.37 points from 3,571.53 points and the market capitalisation lost N101.81 billion to close at N2.035 billion from the N2.136 trillion quoted in the preceding session.
The OTC securities exchange suffered the decline yesterday despite the share prices of three companies closing green.
Central Securities Clearing System (CSCS) Plc was up by N1.80 to close at N39.80 per share compared with Thursday’s price of N38.00 per share, Air Liquide Plc appreciated by N1.09 to N11.99 per unit from N10.90 per unit, and FrieslandCampina Wamco Nigeria Plc grew by 78 Kobo to N56.57 per share from N55.79 per share.
During the session, the volume of transactions rose by 6,885.3 per cent to 18.2 million units from 4.3 million units, the value of transactions ballooned by 10,301.7 per cent to N389.7 million from N347.2 million, but the number of deals declined by 29.7 per cent to 26 deals from 37 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc ended the day as the most traded stock by value on a year-to-date basis with 5.8 billion units worth N16.4 billion, followed by Okitipupa Plc with 170.4 million units valued at N8.0 billion, and Air Liquide Plc with 507.5 million units worth N4.2 billion.
InfraCredit Plc also finished the day as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units worth N524.9 million.
By Adedapo Adesanya
The Naira depreciated further against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, December 5, as FX demand pressure mounts.
The Nigerian currency lost N2.60 or 0.18 per cent against the greenback to close at N1,450.43/$1 compared with the previous day’s N1,447.83/$1.
Equally, the domestic currency declined against the Pound Sterling in the official forex market during the session by N4.48 to trade at N1,935.45/£1, in contrast to Thursday’s closing price of N1,930.97/£1 and shrank against the Euro by 43 Kobo to end at N1,689.17/€1 versus the preceding session’s rate of N1,688.74/€1.
Similarly, the local currency performed badly against the US Dollar at the GTBank FX counter by N2 to close at N1,455/$1 versus Thursday’s N1,453/$1 but traded flat at the parallel market at N14.65/$1.
As the country gets into the festive period, pressure mounted on the local currency reflecting higher foreign payments and lower FX inflows.
However, there are expectations that the Nigerian currency will be stable, supported by interventions by to the Central Bank of Nigeria (CBN) in the face of steady dollar Demand and inflows from Detty December festivities that will give the Naira a boost after it depreciated mildly last month.
Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450/$1 next week, buoyed by improved FX interventions by the apex bank.
As for the crypto market, it was down yesterday due to profit-taking associated with year-end trading. However, the December 1-Year Consumer Inflation Expectation by the University of Michigan fell to 4.1 per cent from 4.5 per cent previously and 4.5 per cent expected. The 5-Year Consumer Inflation Expectation fell to 3.2 per cent from 3.4 per cent previously and 3.4 per cent expected.
With the dearth of official economic data of late, these private surveys have taken on a new level of significance and the market banks of them to make decisions.
Cardano (ADA) depreciated by 5.7 per cent to $0.4142, Dogecoin (DOGE) slid by 5.1 per cent to $0.1394, Ethereum (ETH) dropped by 3.9 per cent to $3,039.75, Solana (SOL) declined by 3.8 per cent to $133.24, and Litecoin (LTC) fell by 3.7 per cent to $80.59.
Further, Bitcoin (BTC) went down by 2.6 per cent to sell at $89,683.72, Binance Coin (BNB) slumped by 2.2 per cent to $883.59, and Ripple (XRP) shrank by 2.1 per cent to $2.04, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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