Economy
Profit Taking May Contribute To Early Weakness on Wall Street
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 after ending the previous session modestly higher.
Profit taking may contribute to initial weakness on Wall Street following the upward trend seen over the past several sessions.
A negative reaction to earnings news from several big-name companies may also weigh on the markets early in the trading day.
Stocks moved modestly higher over the course of the trading session on Wednesday after initially showing a lack of direction. The Dow reached its best closing level in a month, while the S&P 500 rose to a more than five-month closing high.
While the Dow and the S&P 500 closed in positive territory, the Nasdaq edged down 0.67 points or less than a tenth of a percent to 7,854.44. The Dow rose 79.40 points or 0.3 percent to 25,199.29 and the S&P 500 ticked up 6.07 points or 0.2 percent to 2,815.62.
The modest strength on Wall Street was partly due to a positive reaction to earnings news from companies such as United Continental (UAL) and Morgan Stanley (MS).
United surged up by 8.8 percent after reporting better than expected second quarter results and raising its full-year guidance, while Morgan Stanley jumped by 2.8 percent after reporting second quarter results that beat analyst estimates.
Late in the trading day, the Federal Reserve released its Beige Book, which said economic activity continued to expand across the U.S.
Ten of the twelve Fed districts reported moderate or modest growth, while the Dallas district reported strong growth due to strength in the energy sector and the St. Louis district described growth as slight.
The Fed noted manufacturers across the country expressed concern about tariffs, with many districts citing new trade policies for higher prices and supply disruptions.
Overall, prices increased at a modest to moderate pace on average, with several districts reporting upticks in inflation.
The Beige Book noted employment continued to rise at a modest to moderate pace in most districts. All districts reported that labor markets were tight and many said that the inability to find workers constrained growth, the Fed added.
The Fed is scheduled to hold a two-day meeting policy meeting on July 31st and August 1st, with the central bank widely expected to leave interest rates unchanged.
After raising rates twice this year to the current range of 1.75 to 2 percent, the Fed has signaled two more rate hikes before the end of the year.
Earlier in the day, the Commerce Department released a report showing a sharp pullback in new residential construction in the U.S. in the month of June.
The Commerce Department said housing starts plunged by 12.3 percent to an annual rate of 1.173 million in June after jumping by 4.8 percent to a revised rate of 1.337 million in May.
Economists had expected housing starts to drop by 2.2 percent to a rate of 1.320 million from the 1.350 million originally reported for the previous month.
With the much bigger than expected decrease, housing starts fell to their lowest annual rate since hitting 1.158 million last September.
Building permits, an indicator of future housing demand, also fell by 2.2 percent to an annual rate of 1.273 million in June after tumbling by 4.6 percent to a rate of 1.301 million in May.
The continued decrease came as a surprise to economists, who had expected building permits to climb to an annual rate of 1.330 million.
Transportation stocks showed a significant move to the upside over the course of the session, driving the Dow Jones Transportation Average up by 2.3 percent. With the gain, the average reached its best closing level in almost a month.
United Continental and CSX Corp. (CSX) helped to lead the transportation sector higher after reporting better than expected second quarterly results.
Considerable strength also emerged among financial stocks, with the NYSE Arca Broker/Dealer Index and the KBW Bank Index climbing by 1.7 percent and 1.2 percent, respectively.
Steel stocks also turned in a strong performance on the day, while most of the other major sectors ended the session showing only modest moves.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange rose by 2.30 per cent, spurring the NASD Security Index (NSI) to close higher by 96.61 points to 4,296.34 points from 4,199.73 points, and raising the market capitalisation by N57.99 billion to N2.578 trillion from N2.521 trillion.
The market was up yesterday despite a lower activity level, as the volume of securities traded slumped by 94.7 per cent to 1.3 million units from the previous 23.9 million units. The value of securities slipped by 57.2 per cent to N29.2 million from the preceding session’s N68.2 million, while the number of deals executed by market participants increased by 6.7 per cent to 32 deals from the 30 deals carried out on Thursday.
At the close of transactions, Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with a turnover of 3.4 billion units worth N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units valued at N6.5 billion in trades, and Central Securities Clearing System (CSCS) Plc with 70.8 million units traded for N4.9 billion.
GNI Plc was also the most traded stock by volume on a year-to-date basis, with 3.4 billion units sold for N8.4 billion, followed by Infracredit Plc with 2.3 billion units exchanged for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
During the trading day, there were three price gainers and two price losers, led by Afriland Properties Plc, which shed N1.48 to sell at N15.17 per share compared with the previous session’s N16.65 per share, and Food Concepts Plc, which slid by 7 Kobo to close at N2.69 per unit versus N2.76 per unit.
Conversely, FrieslandCampina Wamco Nigeria Plc improved its value by N9.50 to trade at N150.00 per share compared with Thursday’s closing price of N140.50 per share, CSCS Plc went up by N7.95 to N89.65 per unit from N81.70 per unit, and 11 Plc soared by N6.94 to N206.95 per share from N200.01 per share.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited lost its footing by 0.07 per cent on Friday as a result of renewed profit-taking by investors.
The fall happened after Thomas Wyatt and Guinness Nigeria led other price losers group comprising 27 stocks at the market yesterday due to selling pressure.
Thomas Wyatt Nigeria shed 10.00 per cent to quote at N2.70, Guinness Nigeria drowned by 9.99 per cent to close at N329.00, Ikeja Hotel slipped by 9.96 per cent to N42.50, Zichis shed 9.94 per cent to trade at N26.37, and McNichols depreciated by 9.91 per cent to N5.00.
On the flip side, International Breweries gained 9.92 per cent to finish at N13.30, NEM Insurance appreciated by 9.61 per cent to N27.95, Jaiz Bank grew by 6.36 per cent to N9.20, UPDC expanded by 6.33 per cent to N4.20, and Livestock Feeds increased by 6.32 per cent to N9.25.
Business Post reports that investor sentiment remained bullish despite the loss recorded during the session, as there were 27 price decliners and 30 price advancers, representing a positive market breadth index.
Yesterday, market participants transacted 441.3 million equities for N19.4 billion in 44,938 deals compared with the 1.7 billion equities worth N112.0 billion traded in 44,780 deals a day earlier. This showed that the trading volume contracted by 74.04 per cent, the trading value declined by 82.68 per cent, and an uptick in the number of deals by 0.35 per cent.
Access Holdings led the activity chart on Friday after selling 40.2 million shares valued at N1.0 billion, Sterling Holdco traded 30.3 million stocks worth N228.8 million, Fidelity Bank sold 26.3 million equities for N505.6 million, Zenith Bank transacted 22.3 million shares valued at N2.5 billion, and First Holdco exchanged 19.0 million stocks worth N1.3 billion.
During the last trading session of the week, the consumer goods sector rose by 0.49 per cent, the insurance counter increased by 0.06 per cent, and the industrial goods index closed flat, while the banking and energy indices lost 0.78 per cent and 0.52 per cent, respectively.
As a result, the All-Share Index (ASI) shrank by 159.97 points to 243,798.76 points from 243,958.73 points, and the market capitalisation moderated by N103 billion to N156.445 trillion from N156.548 trillion.
By Adedapo Adesanya
The Naira performed poorly against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, July 10, losing N1.19 or 0.09 per cent to close at N1,379.62/$1, in contrast to Thursday’s exchange rate of N1,378.43/$1.
It also depreciated against the Pound Sterling in the official market during the trading session by N3.80 to trade at N1,850.62/£1 compared with the previous day’s N1,846.82/£1, but gained 43 Kobo on the Euro to sell at N1,575.66/€1 versus the preceding day’s N1,576.09/€1.
At the GTBank FX desk, the Naira weakened against the Dollar yesterday by N1 to quote at N1,386/$1 compared with the previous session’s N1,835/$1, and maintained stability in the black market at N1.400/$1.
Data showed that interbank FX turnover fell by about 10 per cent on Friday to $71.044 million from $78.708 million the previous day. Also, interbank forex market deals reduced to 87 from 106 trades executed at the window on Thursday.
The total forex inflows into the Nigerian foreign exchange market have been fluctuating, with about $1 billion in total inflows reported last week.
Total FX inflows settled at $0.99 billion last week, according to the research subsidiary of Coronation Merchant Bank, with Foreign Portfolio Investors (FPIs) accounting for the largest share at 35.81 per cent, or $0.35 billion.
Exporters accounted for 28.72 per cent or $0.28 billion, while the CBN contributed 11.15 per cent or $0.11 billion. Non-Bank Corporations also made up a notable 10.92 per cent of total inflows, reflecting continued support from both market-driven and official sources.
In the cryptocurrency market, Bitcoin rose above $64,100, retesting the price level that rejected it on Monday, with a clean break above, opening the path toward the June 15 high of $67,250. It gained 0.3 per cent to sell at $64,114.16.
Ethereum (ETH) appreciated by 1.6 per cent to $1,798.81, Dogecoin (DOGE) grew by 0.6 per cent to $0.0742, Binance Coin (BNB) added 0.6 per cent to sell for $576.47, Cardano (ADA) also grew by 0.6 per cent to $0.1674, and Ripple (XRP) jumped by 0.4 per cent to $1.10.
But Solana (SOL) lost 1.1 per cent to settle at $77.95, and TRON (TRX) declined by 0.2 per cent to $0.3296, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
