Economy
Global Economic Worries Weigh on US Stocks
By Investors Hub
The major U.S. index futures are currently pointing to a lower opening on Friday, with stocks likely to see further downside after moving sharply lower over the course of the two previous sessions.
Concerns about the outlook for the global economy may continue to weigh on the markets after President Donald Trump announced plans to impose a 10 percent tariff on the remaining $300 billion worth of Chinese imports.
The new tariffs announced by Trump represent the latest escalation in the trade war between the U.S. and China, which has been a dark cloud over the global economy for over a year.
Traders are also digesting a closely watched Labor Department report showing U.S. job growth slowed in the month of July but came in line with economist estimates.
After moving significantly higher over the course of morning trading on Thursday, stocks pulled back sharply after President Donald Trump announced plans to impose a 10 percent tariff on the remaining $300 billion worth of Chinese imports.
The major averages climbed off their worst levels going into the close but remained firmly negative. The Dow jumped more than 300 points in morning trading but ended the day down 280.85 points or 1.1 percent at 26,583.42.
The tech-heavy Nasdaq also slid 64.30 points or 0.8 percent to 8,111.12 and the S&P 500 slumped 26.82 points or 0.9 percent to 2,953.56.
With the downturn, the major averages extended the steep drop seen late in the previous session, ending the day at their worst closing levels in a month.
The afternoon pullback came as Trump announced his plans to impose new tariffs on Chinese goods in a series of posts on Twitter.
Trump revealed the plan shortly after U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin wrapped up the latest round of trade talks in Shanghai.
“Our representatives have just returned from China where they had constructive talks having to do with a future Trade Deal,” Trump tweeted. “We thought we had a deal with China three months ago, but sadly, China decided to re-negotiate the deal prior to signing.”
Trump accused China of failing to follow through on pledges to buy large quantities of U.S. agricultural products and stop the sale of Fentanyl to the U.S.
“Trade talks are continuing, and during the talks the U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country,” Trump said.
He added, “We look forward to continuing our positive dialogue with China on a comprehensive Trade Deal, and feel that the future between our two countries will be a very bright one!”
Trump noted that products targeted by the new tariffs do not include the $250 billion worth of Chinese goods already being tariffed at 25 percent.
The new tariffs announced by Trump represent the latest escalation in the trade war between the U.S. and China, which has led to increasing concerns about the outlook for the global economy.
The Federal Reserve’s decision to cut interest rates by a quarter point on Wednesday was partly due to the potential impact of the ongoing trade dispute.
Stocks had rallied earlier in the session as weaker than expected U.S. economic data resurrected investors’ hopes for future interest rate cuts.
Shortly after the start of trading, the Institute for Supply Management released a report unexpectedly showing a continued slowdown in the pace of growth in U.S. manufacturing activity in the month of July.
The ISM said its purchasing managers index dipped to 51.2 in July after edging down to 51.7 in June. While a reading above 50 still indicates growth in manufacturing activity, economists had expected the index to inch up to 52.0.
With the continued decrease, the purchasing managers index dropped to its lowest level since hitting 49.6 in August of 2016.
A separate report from the Commerce Department showed U.S. construction spending plunged by 1.3 percent to in June after falling by 0.5 percent in May.
The data reignited optimism about future rate cuts that was dashed by yesterday’s comments from Federal Reserve Chairman Jerome Powell.
The Fed cut interest rates as expected on Wednesday, but Powell spooked the markets by suggesting the move may not be the first in a series of rate cuts.
Energy stocks saw substantial weakness on the day, moving sharply lower along with the price of crude oil. Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index and the NYSE Arca Natural Gas Index plunged by 5.5 percent and 4.9 percent, respectively.
Significant weakness also emerged among banking stocks, as reflected by the 3.7 percent nosedive by the KBW Bank Index.
Steel, transportation, semiconductor and networking stocks also came under considerable selling pressure over the course of the session.
On the other hand, gold stocks bucked the downtrend, driving the NYSE Arca Gold Bugs Index up by 5.2 percent. The strength in the sector came as the price of the precious metal rallied in extended trading.
By Dipo Olowookere
The Nigerian equity market showed no signs of slowing down, as it further appreciated by 1.30 per cent on Friday on the back of sustained buying pressure.
Unlike the preceding sessions, investor sentiment was bullish yesterday after the Nigerian Exchange (NGX) Limited ended with 43 price gainers and 26 price losers, implying a positive market breadth index, the first this week.
UPDC gained 10.00 per cent to close at N4.40, Academy Press also appreciated by 10.00 per cent to quote at N7.70, Haldane McCall improved by 9.97 per cent to N3.97, Zichis soared by 9.94 per cent to N15.60, and Wema Bank added 9.84 per cent to settle at N31.25.
Conversely, Meyer lost 9.92 per cent to sell for N16.80, Trans-Nationwide Express also crashed by 9.92 per cent to end at N7.90, C&I Leasing slipped by 8.53 per cent to N5.90, Omatek dipped by 7.34 per cent to N2.02, and eTranzact decreased by 5.28 per cent to N17.05.
When the bourse closed its doors to business, the All-Share Index (ASI) rose by 2,884.81 points to 225,722.49 points from 222,837.68 points, and the market capitalisation grew by N1.858 trillion to N145.335 trillion from N143.477 trillion.
A look at the activity chart showed that market participants transacted 627.6 million shares worth N44.5 billion in 55,232 deals during the trading day compared with the 667.9 million shares valued at N38.1 billion traded in 53,062 deals a day earlier.
This indicated that the volume of transactions went down by 6.03 per cent, the value of trades went up by 16.80 per cent, and the number of deals jumped by 4.09 per cent.
Access Holdings closed the session as investors’ toast, with a turnover of 75.6 million units worth N2.4 billion. UBA transacted 43.1 million units valued at N2.3 billion, Wema Bank exchanged 41.5 million units for N1.3 billion, Zenith Bank traded 38.4 million units valued at N5.2 billion, and Universal Insurance sold 29.5 million units for N35.9 million.
By Aduragbemi Omiyale
Mr Taiwo Oyedele has set some goals he intends to achieve as Nigeria’s Minister of Finance and Coordinating Minister of the Economy.
While taking over from his predecessor, Mr Wale Edun, on Thursday, the tax expert assured that he has no plans to overturn some of the reforms already put in place by the former occupier of the seat.
In a message on Friday, he emphasised that, “Our immediate task is to consolidate these gains, deepen ongoing reforms, and ensure they translate into tangible benefits for all Nigerians.”
He promised to ensure fiscal discipline by embracing transparent and prudent management of public resources, while also harmonising revenue administration, broadening the tax base, reducing the burden on the vulnerable population, and supporting economic growth.
Mr Oyedele further said his other strategic priorities include creating a predictable and investor-friendly environment anchored on policy coherence, consistency, and clarity; and aligning efforts across all tiers and institutions to maximise policy impact.
He also said efforts would be made to deepen collaboration with the private sector and other key stakeholders for data-driven policy design, co-implementation, and feedback for continuous improvement.
According to him, “Good policy design alone is not enough; success will be defined by execution. We are committed to disciplined implementation, accountability, and measurable results.”
“I look forward to working with colleagues across government, the private sector, and all Nigerians as we move from reform to result, accelerate growth and build a more stable, inclusive, and prosperous economy,” he stated.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange further appreciated by 0.23 per cent on Thursday, April 23, with the Unlisted Security Index (NSI) adding 8.99 points to close at 3,969.96 points against the previous day’s 3,968 points.
The rise in the share price of Central Securities Clearing System (CSCS) Plc by N2.86 to N69.34 per unit from N66.48 per unit raised the market capitalisation of the NASD bourse by N5.38 billion to N2.380 trillion from N2.375 trillion.
Yesterday, there were two price losers, led by Food Concepts Plc, which lost 29 Kobo to sell at N2.65 per share versus N2.94 per share, while UBN Property Plc dipped by 22 Kobo to N2.03 per unit from N2.25 per unit.
During the session, the volume of securities traded declined by 97.9 per cent to 451,522 units from 21.5 million units on Wednesday, the value of securities depreciated by 52.32 per cent to N23.6 million from N49.5 million, and the number of deals depreciated by 3.6 per cent to 27 deals from 28 deals.
At the close of business, Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis with 3.4 billion units valued at N8.4 billion, followed by CSCS Plc with 59.5 million units exchanged for N4.0 billion, and Okitipupa Plc with 27.8 million units traded for N1.9 billion.
GNI Plc also closed the day as the most traded stock by volume on a year-to-date basis with 3.4 billion units worth N8.4 billion, trailed by Resourcery Plc with 1.1 billion units transacted for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units sold for N1.2 billion.
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