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 Aduragbemi Omiyale
On Tuesday, December 17, 2024, President Bola Tinubu will present the 2025 budget to a joint session of the National Assembly.
The size of the 2025 Appropriation Bill is about N47.9 trillion and would be presented to the parliament for approval.
Speaking at the plenary on Thursday, December 12, 2024, the President of the Senate, Mr Godswill Akpabio, said the presentation by Mr Tinubu would be at the chamber of the House of Representatives.
However, it is not certain if the lawmakers will pass the budget before December 31 to allow for a recent budget cycle of January to December.
Recall that on December 3, the senate approved the Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) for 2025 to 2027.
This was after the President presented this the National Assembly on November 19 ahead of the consideration of the 2025 budget proposal.
In the MTEF/FSP, the government said it planned to borrow about N9.22 trillion from local and foreign sources to finance the budget deficit.
It pegged the crude oil benchmark at $75 per barrel and a daily oil production of 2.06 million barrels at an exchange rate of N1,400 to $1, and a targeted gross domestic product (GDP) growth rate of 6.4 percent.
At the plenary today, Mr Akpabio informed his colleagues that, “The President has made his intention known to the National Assembly to present the 2025 budget to the joint session of the National Assembly on December 17, 2024.”
By Adedapo Adesanya
Nigeria added 150,000 barrels per day to its crude production in November 2024 as it continues to pursue an ambitious 2 million barrels per day target.
According to the Organisation of the Petroleum Exporting Countries (OPEC), Nigeria’s oil production rose to 1.48 million barrels per day in November, up from 1.33 million barrels per day the previous month.
In its Monthly Oil Market Report (MOMR), OPEC revealed that at 1.48 million barrels per day, it is the continent’s leading oil producer, surpassing Algeria’s 908,000 barrels per day and Congo’s 268,000 barrels per day.
Business Post reports that OPEC doesn’t account for condensates, which Nigeria’s accounts for in its broader 2 million barrels per day target.
Despite the surge in production levels, Nigeria is still under producing its 1.5 million barrels per day output quota under a deal involving OPEC and 10 other producers known as OPEC+.
OPEC said it relied on primary data gotten through direct communication, noting that secondary sources reported 1.417 million barrels per day as Nigeria’s crude production in November — up from 1.4 million barrels per day in October.
The data also shows that OPEC’s total oil production among its 12 members rose by 104,000 barrels per day in the month under review.
According to secondary sources, the total of the 12 OPEC countries’ crude oil production averaged 26.66 million barrels per day in November 2024.
“Crude oil output increased mainly in Libya, Iran, and Nigeria, while production in Iraq, Venezuela, and Kuwait decreased”, OPEC said.
“At the same time, total non-OPEC DoC crude oil production averaged 14.01 mb/d in November 2024, which is 219 tb/d higher, m-o-m. Crude oil output increased mainly in Kazakhstan and Malaysia,” the organisation added.
In a related development, OPEC trimmed its 2024 and 2025 oil demand growth forecasts for the fifth time this year.
Now, the cartel expects the world’s oil demand growth at 1.61 million barrels per day from the previously 1.82 million barrels per day.
For 2025, OPEC says the world oil demand growth forecast is now at 1.45 million barrels per day, a 900,000 barrels per day cut from the previously expected 1.54 million barrels per day.
On the changes, OPEC says that the downgrade for this year owes to more bearish data received in the third quarter of 2024 while the projections for next year relate to the potential impact that will arise from US tariffs.
By Adedapo Adesanya
The duo of Afriland Properties Plc and Geo-Fluids Plc crashed the NASD Over-the-Counter (OTC) Securities Exchange by a marginal 0.06 per cent on Wednesday, December 11 due to profit-taking activities.
The OTC securities exchange experienced a downfall at midweek despite UBN Property Plc posting a price appreciation of 17 Kobo to close at N1.96 per share, in contrast to Tuesday’s closing price of N1.79.
Business Post reports that Afriland Properties Plc slid by N1.14 to finish at N15.80 per unit versus the preceding day’s N16.94 per unit, and Geo-Fluids Plc declined by 1 Kobo to trade at N3.92 per share compared with the N3.93 it ended a day earlier.
At the close of transactions, the market capitalisation of the bourse, which measures the total value of securities on the platform, shrank by N650 million to finish at N1.055 trillion compared with the previous day’s N1.056 trillion and the NASD Unlisted Security Index (NSI) went down by 1.86 points to wrap the session at 3,012.50 points compared with 3,014.36 points recorded in the previous session.
The alternative stock market was busy yesterday as the volume of securities traded by investors soared by 146.9 per cent to 5.9 million units from 2.4 million units, as the value of shares transacted by the market participants jumped by 360.9 per cent to N22.5 million from N4.9 million, and the number of deals increased by 50 per cent to 21 deals from 14 deals.
When the bourse closed for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units valued at N3.9 billion, followed by Okitipupa Plc with 752.2 million units worth N7.8 billion, and Afriland Properties Plc 297.5 million units sold for N5.3 million.
Also, Aradel Holdings Plc, which is now listed on the Nigerian Exchange (NGX) Limited after its exit from NASD, remained the most active stock by value (year-to-date) with 108.7 million units sold for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units worth N5.3 billion.
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