Economy
Ongoing Trade Concerns Weigh on US Stocks
By Investors Hub
The major U.S. index futures are currently pointing to a lower opening on Monday, with stocks likely to see some further downside following the pullback seen late in the previous session.
Ongoing concerns about the escalating U.S.-China trade dispute are likely to weigh on Wall Street after Google suspended some of its business with Chinese tech giant Huawei.
Google has cut Huawei off from business involving the transfer of hardware, software and technical services, complying with an order by President Donald Trump blocking the sale or transfer of U.S. technology to Huawei.
?We are complying with the order and reviewing the implications,? a Google spokesperson said, noting services such as Google Play and the security protections from Google Play Protect will continue to function on existing Huawei devices.
Overall trading activity may be somewhat subdued, however, as a lack of major U.S. economic data may keep some traders on the sidelines.
Reports on new and existing home sales and durable goods orders are likely to attract attention in the coming days along with the minutes of the latest Federal Reserve meeting.
Stocks showed wild swings over the course of the trading session on Friday before ending the day mostly lower. The major averages recovered from an initial move to the downside only to pull back sharply late in the session.
At the end of the day, the major averages were all firmly in negative territory. The Dow fell 98.68 points or 0.4 percent to 25,764.00, the Nasdaq slumped 81.76 points or 1 percent to 7,816.28 and the S&P 500 dropped 16.79 points or 0.6 percent to 2,859.53.
The major averages also closed lower for the week. The Nasdaq tumbled by 1.3 percent, while the Dow and the S&P 500 slid by 0.7 percent and 0.8 percent, respectively.
Reflecting recent market sensitivity to trade-related news, the late-day pullback came on the heels of a CNBC report indicating negotiations between the U.S. and China appear to have stalled.
Citing two sources briefed on the status of trade talks, CNBC said scheduling for the next round of negotiations is “in flux” because it is unclear what the two sides would discuss.
Sources told CNBC discussions regarding scheduling the next round of talks have not taken place since President Donald Trump signed an executive order ramping up scrutiny of Chinese telecom companies.
Lingering concerns about the escalating trade dispute between the U.S. and China also contributed to the initial weakness on Wall Street.
While Trump has sought to blame China for backing out of a nearly completed trade deal, a spokesperson for China’s Ministry of Commerce claims the U.S. is responsible for serious setbacks in the trade talks.
Commerce Ministry spokesperson Gao Feng accused the Trump administration of “bullying behavior” with a recent increase in tariffs, according to state-run Chinese news agency Xinhua.
“It is regrettable that the U.S. side unilaterally escalated trade disputes, which resulted in severe negotiating setbacks,” Gao said.
He added, “We urge the U.S. side to correct wrongdoings as soon as possible to avoid causing heavier damages to businesses and consumers in both countries and dragging down the global economy.?
However, concerns about trade waned after the Trump administration officially delayed imposing tariffs on imported automobiles and parts for up to six months, confirming media reports from earlier this week.
A White House statement noted Trump has directed U.S. Trade Representative Robert Lighthizer to negotiate agreements to address the national security threat posed by auto imports.
On the U.S. economic front, the University of Michigan released a report showing a substantial improvement in consumer sentiment in May, although the data was recorded mostly before trade negotiations with China collapsed.
The preliminary report showed the consumer sentiment index surged up to 102.4 in May from 97.2 in April, reaching its highest level in fifteen years. Economists had expected the index to inch up to 97.5.
Oil service stocks showed a substantial move to the downside over the course of the trading session, dragging the Philadelphia Oil Service Index down by 3.2 percent. The sell-off by oil service stocks came amid a modest decrease by the price of crude oil.
Significant weakness also emerged among semiconductor stocks, as reflected by the 2 percent slump by the Philadelphia Semiconductor Index.
Natural gas, oil producer, and networking stocks also saw considerable weakness on the day, notable strength was visible among computer hardware stocks.
Shares of Cray Inc. (CRAY) soared 22.5 percent after she supercomputer maker agreed to be acquired by Hewlett Packard Enterprise (HPE) for $1.3 billion in cash.
By Dipo Olowookere
A 0.38 per cent loss was suffered by Nigerian stocks on Tuesday on the back of continued selling pressure from investors embarking on profit-taking.
Data from the Nigerian Exchange (NGX) Limited showed that the contraction was influenced by the 1.78 per cent decline recorded by the insurance sector, the 0.24 per cent slip printed by the consumer goods index, and the 0.09 per cent drop posted by the energy space, offsetting the 0.75 per cent growth achieved by the banking sector and the 0.21 per cent growth recorded by the industrial goods segment.
Investor sentiment was weak during the trading day, as the bourse ended with 13 price gainers and 40 price losers, representing a negative market breadth index.
LivingTrust Mortgage depreciated by 10.00 per cent to N3.42, Multiverse also shed 10.00 per cent to N22.95, McNichols dropped 9.92 per cent to N5.45, Thomas Wyatt dipped by 9.87 per cent to N3.56, and Eterna lost 8.57 per cent to trade at N33.00.
On the flip side, AVA Capital improved by 9.94 per cent to N9.95, Livestock Feeds expanded by 9.71 per cent to N8.65, Neimeth increased by 8.43 per cent to N9.00, AIICO gained 3.47 per cent to settle at N4.18, and Oando grew by 3.30 per cent to N36.00.
A total of 1.6 billion equities valued at N28.7 billion exchanged hands in 54,160 deals yesterday versus the 923.0 million equities worth N37.9 billion traded in 72,544 deals on Monday, indicating a 73.35 per cent surge in the trading volume, a 24.27 per cent decline in the trading value, and a 25.34 per cent slip in the number of deals.
The busiest stock was Japaul, which transacted 904.4 million units for N2.7 billion. Sterling Holdings sold 54.0 million units valued at N431.9 million, FCMB exchanged 49.5 million units worth N545.9 million, Chams traded 44.9 million units for N199.2 million, and Neimeth sold 42.4 million units worth N327.8 million.
Business Post reports that the All-Share Index (ASI) gave up 927.70 points to 244,802.83 points from 245,730.53 points, and the market capitalisation receded by N599 billion to N158.016 trillion from N158.615 trillion.
By Adedapo Adesanya
The Naira put up a better performance against the United States Dollar in the various segments of the foreign exchange (FX) market on Tuesday, August 4.
In the parallel market, it improved its value by N5 to settle at N1,400/$1 compared with the previous day’s value of N1,405/$1, and at the GTBank forex desk, it appreciated by N1 to close at N1,373/$1, in contrast to the preceding session’s N1,374/$1.
In the Nigerian Autonomous Foreign Exchange Market (NAFEX) segment, the Nigerian currency gained N2.28 or 0.17 per cent against the greenback to quote at N1,362.55/$1 compared with the N1,364.83/$1 it was exchanged a day earlier.
Also in the official market, the local currency appreciated against the Pound Sterling during the session by N6.48 to finish at N1,831.41/£1 versus N1,837.89/£1, and chalked up N5.22 on the Euro to sell at N1,568.71/€1 versus N1,573.93/€1.
Interbank FX transactions increased 14 per cent day-on-day as market makers’ activities raised total Dollar volume exchanged to $156.23 million, more than 132 per cent above $137.05 million in turnover at the previous close.
The interbank FX turnover rose despite a marginal rise in deals at the NFEM window as data from the central bank put Tuesday’s quote at 139 from 138.
As for the cryptocurrency market, major tokens were mixed as global stock indexes hit fresh records on renewed enthusiasm for artificial-intelligence-related shares.
With cheaper oil, easing rate expectations and a strong risk-on rally in equities supporting digital assets, analysts say crypto appears to be driven by internal market dynamics rather than macroeconomic factors, even as traders watch for a potential Strait of Hormuz deal.
It was reported overnight that Iran and Oman were close to an agreement to reopen the Strait of Hormuz, with an announcement targeted for Wednesday.
Binance Coin (BNB) grew by 1.8 per cent to $600.54, Bitcoin (BTC) rose by 0.9 per cent to $64,199.86, Solana (SOL) jumped by 0.8 per cent to $73.95, and Ethereum (ETH) advanced by 0.7 per cent to $1,867.21.
But Cardano (ADA) depreciated by 1.9 per cent to $0.1908, TRON (TRX) dipped by 0.6 per cent to $0.3268, Dogecoin (DOGE) slumped by 0.5 per cent to $0.0698, and Ripple (XRP) crashed by 0.4 per cent to $1.06, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.
By Adedapo Adesanya
Brent crude dropped below $80 per barrel, precisely losing $4.41 or 5.3 per cent to settle at $79.36 a barrel on Tuesday, after comments by officials from the United States and Qatar raised hopes for a diplomatic resolution to the Iran war, which could improve oil flows through the Strait of Hormuz.
Also, the US West Texas Intermediate (WTI) futures depreciated by $4.57 or 5.7 per cent to trade at $75.77 a barrel.
US Secretary of State Marco Rubio said on Tuesday there was progress in talks with Iran and Oman about moving more ships through the strait, but a final agreement was yet to be reached.
Also, Treasury Secretary Scott Bessent had said earlier on Tuesday that a deal with Iran to reopen the strait could come as soon as Tuesday or Wednesday.
Qatar’s Foreign Ministry spokesperson Majed al-Ansari said efforts to secure a diplomatic resolution to the war were continuing.
Qatar said it has discussed with US President Donald Trump ways to reduce escalation and converge viewpoints between the US and Iran.
Meanwhile, the latest round of US-facilitated talks between Israel and Lebanon began on Tuesday and will continue through Thursday.
Amid this, Iran still wants control over inbound shipping and visibility over outbound traffic through the Strait of Hormuz, with the ability to intervene if necessary, as part of a plan being discussed with Oman to reopen the strategic waterway.
Market analysts noted that the prospect of a diplomatic solution to the conflict has helped remove some of the geopolitical risk premium in oil prices. If negotiations between the US and Iran make meaningful progress, the market could continue pricing in a lower probability of supply disruptions.
Disruptions to shipping through the strait, through which a fifth of global oil and gas flowed before the war, have forced Middle Eastern nations to cut oil output sharply. The world has lost more than 2.6 billion barrels of oil since the Iran war began in February.
Shipping traffic at the key Gulf waterways of Bab el-Mandeb and the Strait of Hormuz remained unchanged at the start of the week.
The American Petroleum Institute (API) estimated that crude oil inventories in the US rose by 2.69 million barrels in the week ending July 30. Commercial crude oil inventories excluding the SPR have lost just over 58 million barrels over the last sixteen weeks, with US crude inventories down just 7.2 million for the year, according to API data.
Official data from the US Energy Information Administration (EIA) will be released later on Wednesday.
