Economy
Futures Pointing to Initial Strength on Wall Street
By Investors Hub
The major U.S. index futures are pointing to a higher opening on Wednesday following the lackluster performance seen in the previous session.
The upward momentum on Wall Street comes following the release of a report from the Labor Department showing consumer prices increased in line with economist estimates in the month of October.
The relatively tame inflation data may offset some recent concerns about the Federal Reserve raising interest rates faster than currently anticipated.
Trading activity may remain somewhat subdued, however, as lingering concerns about the global economic outlook may keep some traders on the sidelines.
Remarks by Fed Chairman Jerome Powell after the close of trading are also likely to attract attention, as traders look for additional clues about the outlook for interest rates.
Last week, the Fed left interest rates unchanged as widely expected but indicated it remains on track to gradually raise rates despite signs of a slowdown in the pace of growth in business investment.
Following the sell-off seen on Monday, stocks turned in a relatively lackluster performance during trading on Tuesday. The major averages spent the day bouncing back and forth across the unchanged line.
While the tech-heavy Nasdaq inched up 0.01 points or less than a tenth of a percent to 7,200.88, the S&P 500 dipped 4.04 points or 0.2 percent to 2,722.18 and the Dow fell 100.69 points or 0.4 percent to 25,286.49.
The choppy trading on Wall Street came as traders continued to express uncertainty about the global economic outlook and the impact of an anticipated increase in interest rates.
The initial strength on Wall Street came after a report from the Wall Street Journal said high-level U.S.-China trade talks have resumed ahead of a meeting between U.S. President Donald Trump and Chinese President Xi Jinping later this month.
Traders largely shrugged off a report from the Wall Street Journal indicating high-level U.S.-China trade talks have resumed ahead of a meeting between U.S. President Donald Trump and Chinese President Xi Jinping later this month.
The Journal said Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He spoke by telephone on Friday about a deal that would ease trade tension.
Traders seemed reluctant to make more significant moves ahead of the release of closely watched reports on consumer price inflation, retail sales and industrial production in the coming days.
A notable drop by Boeing (BA) weighed on the Dow after a report from the Wall Street Journal said the aerospace giant withheld information about potential hazards associated with the automated stall-prevention system on its 737 MAX 8 and MAX 9 models.
Home improvement retail giant Home Depot (HD) also closed lower despite reporting better than expected third quarter results and raising its full-year guidance.
Energy stocks showed a substantial move to the downside on the day amid a steep drop by the price of crude oil. Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index plunged by 4.3 percent and the NYSE Arca Oil Index tumbled by 2.6 percent.
A decrease by the price of gold also weighed on gold stocks, resulting in a 1.3 percent drop by the NYSE Arca Gold Bugs Index.
On the other hand, semiconductor stocks rebounded after moving sharply lower over the past few sessions, with the Philadelphia Semiconductor Index climbing by 1.4 percent.
Graphics chip maker Nvidia (NVDA) posted a standout gain after Susquehanna upgraded its rating on the company’s stock to Positive from Neutral.
Notable strength was also visible among housing stocks, as reflected by the 1.1 percent gain posted by the Philadelphia Housing Sector Index.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed higher by 1.41 per cent on Friday, May 15, supported by four securities on the platform.
During the session, FrieslandCampina Wamco Plc added N14.24 to its share price to sell for N159.00 per unit, in contrast to the previous day’s N144.76 per unit.
Further, Central Securities and Clearing System (CSCS) Plc appreciated by N1.34 to N72.34 per share from N71.00 per share, Geo-Fluids Plc improved its price by 4 Kobo to N2.94 per unit from N2.90 per unit, and Industrial and General Insurance (IGI) Plc gained 1 Kobo to trade at 61 Kobo per share compared with Thursday’s closing price of 60 Kobo per share.
As a result, the NASD Unlisted Security Index (NSI) rose by 58.20 points to 4,188.41 points from 4,130.21 points, and the market capitalisation soared by N34.82 billion to N2.506 trillion from N2.471 trillion on Thursday.
During the session, the volume of trades went up by 180.8 per cent to 1.2 million units from 417,349 units, and the value of transactions increased by 29.8 per cent to N29.8 million from N23.2 million, while the number of deals fell by 22.6 per cent to 24 deals from 31 deals.
Great Nigeria Insurance (GNI) Plc ended the day as the most traded stock by value on a year-to-date basis with 3.4 billion units sold for N8.4 billion, followed by CSCS Plc with 60.8 million units exchanged for N4.1 billion, and Okitipupa Plc with 27.9 million units valued at N1.9 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by Resourcery Plc with 1.1 billion units transacted for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units traded for N1.2 billion.
By Dipo Olowookere
The bears overpowered the Nigerian Exchange (NGX) Limited on Friday, sinking it further by 0.76 per cent when the closing gong was struck by 4 pm.
The nation’s flagship equity market was under selling pressure during the session, as investors booked profits after the shares witnessed price appreciation in the past trading sessions.
The energy sector was the most impacted, as it shed 4.43 per cent. The consumer goods index declined by 0.90 per cent, the banking counter decreased by 0.15 per cent, and the industrial goods sector lost 0.08 per cent, while the insurance counter gained 2.42 per cent, which was not enough to salvage the situation.
Consequently, the All-Share Index (ASI) contracted by 1,912.19 points to 250,330.92 points from 252,243.11 points, and the market capitalisation moderated by 1.225 trillion to N160.444 trillion from N161.669 trillion.
Zichis was the worst-performing stock for the session after it gave up 9.97 per cent to close at N29.43, FTN Cocoa slipped by 9.95 per cent to N8.96, The Initiates slumped by 9.90 per cent to N32.30, LivingTrust Mortgage Bank tumbled by 9.88 per cent to N3.83, and International Energy Insurance dropped 9.71 per cent to trade at N2.79.
The best-performing stock was ABC Transport, which grew by 10.00 per cent to N6.27. May and Baker also appreciated by 10.00 per cent to N47.30, SCOA Nigeria surged by 9.98 per cent to N33.05, Trans-Nationwide Express expanded by 9.97 per cent to N7.06, and DAAR Communications jumped 9.76 per cent to N2.25.
Yesterday, investors traded 1.1 billion shares worth N44.3 billion in 65,744 deals compared with the 1.0 billion shares valued at N41.6 billion transacted in 74,822 deals a day earlier. This indicated a dip in the number of deals by 12.13 per cent, and a rise in the trading volume and value by 10.00 per cent and 6.49 per cent, respectively.
Chams was the busiest equity for the day, with 328.5 million units sold for N1.1 billion. UBA traded 61.6 million units worth N2.7 billion, First Holdco transacted 58.7 million units valued at N4.2 billion, Secure Electronic Technology exchanged 51.9 million units worth N45.0 million, and Access Holdings traded 51.8 million units valued at N1.3 billion.
By Adedapo Adesanya
The last trading session of the week at the Nigerian Autonomous Foreign Exchange Market (NAFEX) ended on a negative note for the Naira on Friday, May 15, as it lost N15 Kobo or 0.1 per cent against the Dollar to trade at N1,371.04/$1 compared with the previous day’s N1,370.89/$1.
However, it further appreciated against the Pound Sterling in the same market segment yesterday by N20.77 to close at N1,830.61/£1 versus Thursday’s value of N1,851.38/£1, and gained N7.91 against the Euro to settle at N1,595.07/€1 versus N1,602.98/€1.
At the GTBank FX desk, the Naira lost N2 against the US Dollar during the session to sell at N1,383/$1 compared with the preceding session’s N1,381/$1, and at the black market, it remained unchanged at N1,385/$1.
The Naira is forecast to be broadly stable, supported by Dollar sales by the Central Bank of Nigeria (CBN) amid steady, higher oil receipts, with the market settling into a balance.
Policy direction is also expected to give the market some boost as the CBN said the new edition of the FX market guidelines will deepen liquidity, improve transparency and strengthen confidence in the country’s foreign exchange market.
According to the Governor of the CBN, Mr Yemi Cardoso, the update is due to changing global economic realities, domestic reforms and the need for a more coherent and forward-looking regulatory framework. According to him, the last edition of the FX manual was issued in 2018, making the latest review both timely and necessary.
Meanwhile, the cryptocurrency market plunged into the red zone as rising bond yields hit risk assets across markets, while traders are increasingly betting the Federal Reserve may need to raise rates again. Rising energy prices and resurging inflation could force central banks back into tightening mode.
Cardano (ADA) shrank by 4.4 per cent to $0.2557, Dogecoin (DOGE) slid by 3.7 per cent to $0.1104, Ripple (XRP) depreciated by 3.5 per cent to $1.41, Solana (SOL) crashed by 3.5 per cent to $87.81, and Binance Coin (BNB) slumped by 3.4 per cent to $659.64.
Further, Bitcoin (BTC) declined by 2.6 per cent to $78,547.49, Ethereum (ETH) lost 2.1 per cent to quote at $2,209.19, and TRON (TRX) tumbled by 0.7 per cent to $0.3509, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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