Economy
Interest Rate Worries May Weigh On US Shares
By Investors Hub
The major U.S. index futures are pointing to a lower opening on Thursday, with stocks likely to move back to the downside following the modest rebound seen in the previous session.
The futures saw further downside following the release of a report from the Labor Department showing a sharp jump in labor costs in the fourth quarter.
The Labor Department said unit labor costs spiked by 2.0 percent in the fourth quarter after slipping by a revised 0.1 percent in the third quarter. Economists had expected costs to climb by 0.8 percent.
The data may raise concerns about the outlook for interest rates after the Federal Reserve predicted inflation would move up this year and stabilize around its 2 percent objective over the medium term.
Stocks fluctuated over the course of the trading session on Wednesday after failing to sustain an early move to the upside. The major averages bounced back and forth across the unchanged line before closing modestly higher.
The major averages finished the session in positive territory after closing lower for two straight days. The Dow rose 72.50 points or 0.3 percent to 26,149.39, the Nasdaq inched up 9.00 points or 0.1 percent to 7,411.48 and the S&P 500 crept up 1.38 points or 0.1 percent to 2,823.81.
The modestly higher close on Wall Street came after the Federal Reserve announced its widely expected decision to leave interest rates unchanged.
The Fed’s accompanying statement was seen as slightly more hawkish, reinforcing expectations the central bank will raise rates at its next meeting in March.
In the statement, the Fed said data received since its last meeting in December indicates that the labor market has continued to strengthen and that economic activity has been rising at a solid rate.
The central bank reiterated that it expects economic conditions to evolve in a manner that will warrant further gradual increases in the federal funds rate.
“Janet Yellen’s final policy meeting as Fed Chair pretty much summed up her entire tenure; policy was left accommodative but there were hints it will be tightened gradually in the future,” said Michael Pearce, Senior U.S. Economist at Capital Economics.
He added, “The slightly more hawkish language in the statement is enough to confirm expectations of a March hike and adds weight to our view that the Fed will raise rates four times this year.”
On the U.S. economic front, payroll processor ADP released a report showing stronger than expected private sector job growth in the month of January.
ADP said employment in the private sector spiked by 234,000 jobs in January after surging up by a revised 242,000 jobs in December.
Economists had expected an increase of about 185,000 jobs compared to the jump of 250,000 jobs originally reported for the previous month.
A separate report from the National Association of Realtors showed pending home sales increased for the third consecutive month in December.
NAR said its pending home sales index climbed by 0.5 percent to 110.1 in December after rising by 0.3 percent to an upwardly revised 109.6 in November. Economists had expected the index to increase by 0.4 percent.
Software stocks turned in some of the market’s best performances on the day, resulting in a 1.6 percent advance by the Dow Jones Software Index.
Video game publisher Electronic Arts (EA) posted a standout gain after reporting weaker than expected fiscal third quarter results but providing upbeat guidance for the current quarter.
Considerable strength was also visible among commercial real estate stocks, as reflected by the 1.8 percent gain posted by the Morgan Stanley REIT Index. The index rebounded after ending the previous session at its lowest closing level in over a year.
Gold and utilities stocks also moved notably higher on the day, while pharmaceutical, biotechnology, and trucking stocks showed significant moves to the downside.
Eli Lilly (LLY) helped to lead the pharmaceutical sector lower even though the drug maker reported better than expected fourth quarter results.
By Adedapo Adesanya
The duo of MRS Oil and FrieslandCampina Wamco Nigeria Plc weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.68 per cent on Friday, June 5.
MRS Plc lost N19.00 during the session to sell at N171.00 per share compared with Thursday’s value of N190.00 per share, and FrieslandCampina Wamco Nigeria Plc depreciated by N8.70 to finish at N181.68 per unit compared with the preceding session’s N190.38 per unit.
As a result, the market capitalisation further lost N22.59 billion to close at N2.607 trillion versus the N2.630 trillion it ended a day earlier, and the NASD Unlisted Security Index (NSI) dropped 37.76 points to settle at 4,358.32 points, in contrast to the previous day’s 4,396.08 points.
The alternative stock market closed the last trading day of this week with a price gainer, Central Securities Clearing System (CSCS) Plc, which gained 6 Kobo to quote at N78.40 per share compared with the preceding session’s N78.34 per share. However, it could not prevent the market from going down at the close of business.
Yesterday, the volume of securities bought and sold by investors went down by 50.0 per cent to 140,345 units from the preceding day’s 280,714 units, the value of stocks decreased by 16.5 per cent to N17.9 million from the previous session’s N21.5 million, and the number of deals carried out by market participants fell by 35.7 per cent to 27 deals from the 42 deals recorded on Thursday.
When trading activities closed for the day, Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and CSCS Plc with 64.7 million units traded for N4.4 billion.
GNI Plc also ended 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 Infracredit Plc with 2.3 billion units transacted for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
By Dipo Olowookere
Renewed interest in financial stocks and others lifted the Nigerian Exchange (NGX) Limited by 0.15 per cent on Friday.
Customs Street closed higher yesterday despite the 1.37 per cent loss recorded by the consumer goods sector as a result of profit-taking.
This was offset by gains in the other key sectors of the local bourse, as the insurance counter chalked up 1,14 per cent. The banking space appreciated by 0.90 per cent, the industrial goods segment grew by 0.46 per cent, and the energy sector expanded by 0.01 per cent.
Consequently, the All-Share Index (ASI) went up by 366.00 points to 242,593.31 points from 242,227.31 points, and the market capitalisation gained N235 billion to close at N155.594 trillion compared with the previous day’s N155.359 trillion.
The trio of International Energy Insurance, Abbey Mortgage Bank, and DAAR Communications improved by 10.00 per cent each yesterday to N7.26, N9.35, and N1.98, respectively, while Zichis advanced by 9.39 per cent to N32.38, with Sovereign Trust Insurance up by 8.70 per cent to N2.50.
On the flip side, Academy Press lost 9.84 per cent to quote at N8.25, University Press depreciated by 9.73 per cent to N5.10, Africa Prudential dipped by 2.63 per cent to N12.95, Chams crumbled by 2.44 per cent to N4.00, and International Breweries slipped by 1.59 per cent to N12.35.
Business Post reports that the market breadth index was positive during the session after recording 37 appreciating equities and 14 depreciating equities, implying strong investor sentiment.
Abbey Mortgage Bank led the activity chart with a turnover of 164.1 million units worth N1.5 billion, Ellah Lakes sold 76.7 million units for N767.2 million, Access Holdings transacted 44.8 million units valued at N1.1 billion, Linkage Assurance exchanged 23.0 million units worth N41.2 million, and The Initiates traded 20.2 million units for N562.1 million.
At the close of trades, market participants transacted 608.5 million units worth N32.0 billion in 53,826 deals versus the 588.5 million units valued at N27.9 billion executed in 57,352 deals in the previous session. This showed that the number of deals eased by 6.15 per cent, the volume of transactions rose by 3.40 per cent, and the value of transactions soared by 14.70 per cent.
By Adedapo Adesanya
The Naira further depreciated against the United States Dollar by N3.46 or 0.25 per cent to N1,362.21/$1 from N1,358.75/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, June 5.
However, it appreciated against the Pound Sterling in the same market window during the session by N4.47 to trade at N1,823.59/£1 compared with the previous day’s N1,828.06/£1, and gained N7.00 against the Euro to sell at N1,574.58/€1, in contrast to Thursday’s closing price of N1,581.58/€1.
For another trading session, the Nigerian Naira maintained stability against the Dollar in the parallel market and the GTBank forex counter on Friday at N1,375/$1 and N1,372/$1, respectively.
The Naira is expected to remain strong in the near term, backed by a rise in external reserves, which are nearing $50 billion, enhancing analysts’ confidence about its outlook in the second half of 2026.
Heightened global uncertainty has reduced the incentive for importers and corporates to demand FX, as cautious trade weighs on import needs. Analysts estimate a $40 billion net FX position for the year, a projection anchored in oil windfall gains.
As for the cryptocurrency market, prices remained depressed following a strong US jobs report that spurred markets to price in higher-for-longer interest rates, sending Treasury yields and the dollar up while hammering stocks, especially AI-related names. Crypto markets saw heavy leverage washouts with about $1.6 billion in positions liquidated over 24 hours.
Ethereum (ETH) gave up 4.9 per cent to trade at $1,584.68, Solana (SOL) fell by 3.3 per cent to $63.22, Bitcoin (BTC) crashed by 1.9 per cent to $61,333.23, Dogecoin (DOGE) slipped by 1.8 per cent to $0.0821, and Ripple (XRP) moderated by 1.8 per cent to $1.09.
Further, TRON (TRX) dropped 1.6 per cent to sell at $0.3197, Binance Coin (BNB) slumped by 1.0 per cent to $581.18, and Cardano (ADA) declined by 0.4 per cent to $0.1589, while the US Dollar Tether (USDT) gained 0.07 to sell at $0.9997, and US Dollar Coin (USDC) closed flat at $0.9998.
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