Economy
Powell Congressional Testimony in Focus on Wall Street
By Investors Hub
The major U.S. index futures are pointing to a modestly lower opening on Tuesday, with stocks likely to give back some ground following the rally seen over the two previous sessions.
The downward momentum on Wall Street comes following the release of new Federal Reserve Chairman Jerome Powell?s prepared remarks before the House Financial Services Committee.
Powell reiterated the Fed?s view that further gradual increases in interest rates will best promote attainment of both of the central bank?s dual objectives.
?While many factors shape the economic outlook, some of the headwinds the U.S. economy faced in previous years have turned into tailwinds,? Powell says in his prepared remarks.
He added, ?In particular, fiscal policy has become more stimulative and foreign demand for U.S. exports is on a firmer trajectory.?
Powell also said financial conditions remain accommodative despite recent volatility and highlighted strong consumer spending and job growth.
Extending the rally seen last Friday, stocks moved sharply higher over the course of the trading session on Monday. With the continued strength on the day, the major averages further offset the sell-off seen earlier this month.
The major averages finished the session firmly in positive territory. The Dow soared 399.28 points or 1.6 percent to 25,709.27, the Nasdaq jumped 84.07 points or 1.2 percent to 7,421.46 and the S&P 500 surged up 32.30 points or 1.2 percent to 2,779.60.
A continued drop by treasury yields contributed to the strength on Wall Street, as the ten-year yield pulled back further off the ten-year closing high set last Wednesday.
The decrease by treasury yields was partly in reaction to dovish comments by St. Louis Federal Reserve President James Bullard.
Bullard, who is not a voting member of the Fed’s policy committee this year, warned against aggressive interest rate hikes that are not supported by incoming data.
“If the Committee raises the policy rate substantially from here without other changes in the data, the policy setting could become restrictive,” Bullard said at a National Association of Business Economics conference.
The rally on Wall Street came even as traders looked ahead to congressional testimony by new Federal Reserve Chairman Jerome Powell.
Powell is scheduled to testify before the House Financial Services Committee on the Fed’s Semiannual Monetary Policy Report on Tuesday.
On the U.S. economic front, the Commerce Department released a report unexpectedly showing a steep drop in new home sales in January.
The report said new home sales plunged by 7.8 percent to an annual rate of 593,000 in January after slumping by 7.6 percent to an upwardly revised 643,000 in December.
The continued decrease surprised economists, who had expected new home sales to jump by 3.2 percent to a rate of 645,000 from the 625,000 originally reported for the previous month.
Telecom stocks showed a substantial move to the upside on the day, resulting in a 4 percent jump by the NYSE Arca Telecom Index. With the sharp increase on the day, the index reached its best closing level in over a year.
Arista Networks (ANET), Acacia Communications (ACIA) and Cincinnati Bell (CBB) turned in some of the telecom sector’s best performances.
Significant strength was also visible among semiconductor stocks, as reflected by the 2.2 percent gain posted by the Philadelphia Semiconductor Index. The gain lifted the index to a one-month closing high.
Computer hardware stocks also saw considerable strength, with the NYSE Arca Computer Hardware Index surging up by 1.9 percent.
HP Inc. (HPQ) extended the upward move seen last Friday after JPMorgan Chase upgraded its rating on the computer and printer maker’s stock to Overweight from Neutral.
Transportation, brokerage and pharmaceutical stocks also moved notably higher, reflecting another day of broad based buying interest on Wall Street.
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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