Economy
Futures Pointing to Roughly Flat Open on Wall Street
By Investors Hub
The major U.S. index futures are currently pointing to a roughly flat opening on Friday, as traders seem likely to retreat to the sidelines once again.
Stocks may resume the lackluster performance seen earlier in the week amid renewed uncertainty about a potential U.S.-China trade deal.
News U.S. and Chinese negotiators had agreed to roll back existing tariffs as part of a phase one trade deal contributed to early strength on Thursday.
However, buying interest waned after a report from Reuters said the idea faces fierce internal opposition from President Donald Trump?s advisers.
Multiple sources familiar with the talks told Reuters the idea of a tariff rollback was not part of the original October ?handshake? deal between Trump and Chinese Vice Premier Liu He.
Citing current and former administration officials, Reuters said there is a divide within the administration over whether rolling back tariffs will give away U.S. leverage in the negotiations.
The latest reports have sparked renewed uncertainty about what type of trade deal Trump will ultimately be willing to accept.
Trump has repeatedly criticized past administrations for being too weak on China, but he would also like a big political victory ahead of next year?s presidential election.
After sticking to the sidelines for two consecutive sessions, traders rushed back into the markets in early trading on Thursday amid signs of progress in U.S.-China trade talks. The major averages reached new record intraday highs but gave back some ground as the day progressed.
Nonetheless, the major averages managed to remain in positive territory, with the Dow and the Nasdaq ending the day at new record closing highs.
The Dow advanced 182.24 points or 0.7 percent to 27,674.80, the Nasdaq climbed 23.89 points or 0.3 percent to 8,434.52 and the S&P 500 rose 8.40 points or 0.3 percent to 3,085.18.
The early strength on Wall Street came after a spokesman for the Chinese Commerce Ministry said the U.S. and China have agreed to lift existing tariffs in phases.
“The trade war started with tariffs and should end with the cancellation of tariffs,” said ministry spokesman Gao Feng, who noted phase one of a trade deal must include both countries simultaneously canceling tariffs on each other’s goods.
The U.S. has widely been expected to scrap tariffs on about $156 billion worth of Chinese imports currently set to take effect on December 15th as part of phase one.
“Both sides have agreed to cancel additional tariffs in different phases, as both sides make progress in their negotiations,” Gao added without providing a timetable.
A report from Reuters said an anonymous U.S. official confirmed the planned rollback as part of a phase one trade agreement President Donald Trump and Chinese President Xi Jinping hope to sign before the end of the year.
However, the Reuters report also noted the prospect of lifting tariffs, even in phases, has drawn fierce opposition from many of Trump’s advisers, contributing to a notable pullback by stocks.
In U.S. economic news, the Labor Department released a report showing a bigger than expected decrease in first-time claims for U.S. unemployment benefits in the week ended November 2nd.
The report said initial jobless claims slid to 211,000, a decrease of 8,000 from the previous week’s revised level of 219,000.
Economists had expected jobless claims to dip to 215,000 from the 218,000 originally reported for the previous week.
Networking stocks pulled back off their best levels but still ended the day significantly higher, with the NYSE Arca Networking Index jumping by 2 percent.
Within the networking sector, CommScope (COMM) posted a standout gain after reporting better than expected third quarter earnings.
Considerable strength also remained visible among steel stocks, as reflected by the 1.7 percent gain posted by the NYSE Arca Steel Index. The index ended the session at a three-month closing high.
Telecom, oil, and chemical stocks also saw notable strength on the day, while gold stocks showed a substantial move to the downside amid a steep drop by the price of the precious metal.
Utilities, tobacco, and housing stocks also came under pressure over the course of the session, partly offsetting the strength seen in the aforementioned sectors.
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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