Economy
Renewed Trade Deal Uncertainty Weigh on Wall Street
By Investors Hub
The major U.S. index futures are pointing to a pointing to a lower opening on Thursday, with stocks likely to move back to the downside after ending the previous session moderately higher.
Renewed uncertainty about the potential for a long-term U.S.-China trade deal may contribute to initial weakness on Wall Street.
Optimism about phase one of a trade deal has contribute to recent strength on Wall Street, but a new report from Bloomberg said Chinese officials are casting doubts about reaching a comprehensive long-term trade agreement.
People familiar with the matter told Bloomberg that Chinese officials have warned in private conversations that they are unwilling to budge on the thorniest issues.
Early selling pressure may be somewhat subdued, however, with better than expected earnings news from tech giant Apple (AAPL) likely to help limit the downside.
With traders reacting positively to the Federal Reserve’s monetary policy decision, stocks moved moderately higher over the course of the trading session on Wednesday. With the upward move, the S&P 500 reached a new record closing high.
The major averages pulled back off their highs going into the close but remained in positive territory. The Dow climbed 115.27 points or 0.4 percent to 27,186.69, the Nasdaq rose 27.12 points or 0.3 percent to 8,303.98 and the S&P 500 ended the day up 9.88 points or 0.3 percent at 3,046.77.
Stocks showed a lack of direction for most of the day until the Fed announced its decision to lower interest rates for the third straight meeting.
The Fed announced its widely expected decision to lower the target range for the federal funds rate by 25 basis points to 1-1/2 to 1-3/4 percent.
The quarter point rate cut follows two matching moves at the Fed’s meetings in September and July, which marked the first rate cuts in over a decade.
Traders seemed unfazed by a change to the accompanying statement suggesting the central bank may put further monetary policy easing on hold.
The Fed’s accompanying statement removed a key line indicating the central bank would continue to “act as appropriate to sustain the expansion.”
The line was included in each of the Fed’s three previous statements and was seen as pointing toward a near-term rate cut.
The Fed said it would continue to monitor the implications of incoming information for the economic outlook as it assesses the appropriate path of the target range for the federal funds rate.
“It’s a small change, but suggests less willingness to continue cutting rates in future,” FHN Financial Chief Economist Chris Low said about removing the line.
Low added, “In other words, while the FOMC was previously in the midst of a mid-cycle series of rate cuts and assessing whether to end it, the new language suggests they are ready to end it, but alert for evidence it should continue.”
The Fed is scheduled to hold its next monetary policy meeting on December 10-11, with CME Group’s FedWatch tool currently indicating a 79.1 percent chance the central bank will leave rates unchanged.
In his post-meeting press conference, Fed Chairman Jerome Powell said the current stance of monetary policy is “likely to remain appropriate” as long as “the outlook remains broadly in keeping with our expectations.”
Powell also told reporters the Fed would need to see a “really significant move up in inflation that’s persistent” before the central bank would consider raising interest rates.
With the focus on the Fed, traders largely shrugged off the release of some upbeat U.S. economic data, including the Commerce Department’s first reading on third quarter GDP.
The Commerce Department report showed U.S. economic growth slowed much less than expected in the third quarter.
The report said real gross domestic product increased by 1.9 percent in the third quarter after climbing by 2.0 percent in the second quarter. Economists had expected GDP growth to slow to 1.7 percent.
Payroll processor ADP released a separate report showing U.S. private sector employment increased by slightly more than anticipated in the month of October.
ADP said private sector employment climbed by 125,000 jobs in October compared to economist estimates for an increase of about 120,000 jobs.
However, the report also showed private sector job growth in September was downwardly revised to 93,000 from the previously reported addition of 135,000 jobs.
“Job growth has throttled way back over the past year,” said Mark Zandi, chief economist of Moody’s Analytics. “If hiring weakens any further, unemployment will begin to rise.”
Gold stocks showed a strong move to the upside over the course of the session, driving the NYSE Arca Gold Bugs Index up by 1.5 percent. The strength among gold stocks came amid an increase by the price of the precious metal.
Notable strength also emerged among software and pharmaceutical stocks, with the Dow Jones U.S. Software Index and the NYSE Arca Pharmaceutical Index both rising by 1.4 percent.
On the other hand, energy stocks moved sharply lower as the price of crude oil fell following the release of a report showing a much bigger than expected weekly jump in crude oil inventories.
Reflecting the weakness in the sector, the Philadelphia Oil Service Index plummeted by 4.4 percent, the NYSE Arca Natural Gas Index plunged by 3.7 percent and the NYSE Arca Oil Index tumbled by 2.2 percent.
Considerable weakness also remained visible among transportation stocks, as reflected by the 1.8 percent slump by the Dow Jones Transportation Average.
C.H. Robinson Worldwide (CHRW) led the sector lower after the trucking company reported third quarter results that missed analyst estimates.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.65 per cent gain on Friday, December 13, boosted by three equities admitted on the trading platform.
On the last trading session of the week, Okitipupa Plc appreciated by N2.70 to settle at N29.74 per share versus Thursday’s closing price of N27.04 per share, FrieslandCampina Wamco Nigeria Plc added N2.49 to end the session at N42.85 per unit compared with the previous day’s N40.36 per unit, and Afriland Properties Plc gained 50 Kobo to close at N16.30 per share, in contrast to the preceding session’s N15.80 per share.
Consequently, the market capitalisation added N6.89 billion to settle at N1.062 trillion compared with the preceding day’s N1.055 trillion and the NASD Unlisted Security Index (NSI) gained 19.66 points to wrap the session at 3,032.16 points compared with 3,012.50 points recorded in the previous session.
Yesterday, the volume of securities traded by investors increased by 171.6 per cent to 1.2 million units from the 447,905 units recorded a day earlier, but the value of shares traded by the market participants declined by 19.3 per cent to N2.4 million from the N3.02 million achieved a day earlier, and the number of deals went down by 14.3 per cent to 18 deals from 21 deals.
At the close of business, Geo-Fluids Plc was the most active stock by volume on a year-to-date basis with a turnover of 1.7 billion units worth N3.9 billion, followed by Okitipupa Plc with the sale of 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.3 million units sold for N5.3 million.
In the same vein, Aradel Holdings Plc remained the most active stock by value on a year-to-date basis with the sale of 108.7 million units for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with a turnover of 297.3 million units worth N5.3 billion.
By Adedapo Adesanya
The Naira appreciated further against the United States Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N1.50 or 0.09 per cent to close at N1,533.00/$1 on Friday, December 13 versus the N1,534.50/$1 it was transacted on Thursday.
The local currency has continued to benefit from the Electronic Foreign Exchange Matching System (EFEMS) introduced by the Central Bank of Nigeria (CBN) this month.
The implementation of the forex system comes with diverse implications for all segments of the financial markets that deal with FX, including the rebound in the value of the Naira across markets.
The system instantly reflects data on all FX transactions conducted in the interbank market and approved by the CBN.
Market analysts say the publication of real-time prices and buy-sell orders data from this system has lent support to the Naira in the official market and tackled speculation.
In the official market yesterday, the domestic currency improved its value against the Pound Sterling by N12.58 to wrap the session at N1,942.19/£1 compared with the previous day’s N1,954.77/£1 and against the Euro, it gained N2.44 to close at N1,612.85/€1 versus Thursday’s closing price of N1,610.41/€1.
At the black market, the Nigerian Naira appreciated against the greenback on Friday by N30 to sell for N1,650/$1 compared with the preceding session’s value of N1,680/$1.
Meanwhile, the cryptocurrency market was largely positive as investors banked on recent signals, including fresh support from US President-elect, Mr Donald Trump, as well as interest rate cuts by the European Central Bank (ECB).
Ripple (XRP) added 7.3 per cent to sell at $2.49, Binance Coin (BNB) rose by 3.5 per cent to $728.28, Cardano (ADA) expanded by 2.4 per cent to trade at $1.11, Litecoin (LTC) increased by 2.3 per cent to $122.56, Bitcoin (BTC) gained 1.9 per cent to settle at $101,766.17, Dogecoin (DOGE) jumped by 1.2 per cent to $0.4064, Solana (SOL) soared by 0.7 per cent to $226.15 and Ethereum (ETH) advanced by 0.6 per cent to $3,925.35, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Dipo Olowookere
For the fourth consecutive trading session, the Nigerian Exchange (NGX) Limited closed higher on Friday by 0.63 per cent on sustained renewed buying pressure.
Apart from the energy and industrial goods sectors which closed flat, every other sector ended in the green territory, according to data obtained from the bourse.
Business Post reports that the insurance index appreciated by 1.52 per cent, the banking space improved by 0.63 per cent, and the consumer goods counter expanded by 0.46 per cent.
As a result, the All-Share Index (ASI) gained 617.47 points to settle at 99,378.06 points compared with the preceding day’s 98,760.59 points and the market capitalisation went up by 375 billion to close at N60.242 trillion, in contrast to Thursday’s closing value of N59.867 trillion.
The volume of transactions on Customs Street yesterday grew by 11.13 per cent to 544.2 million shares from the 489.7 million shares transacted a day earlier.
The value of transactions increased during the session by 49.30 per cent to N10.6 billion from N7.1 billion and the number of deals went up by 1.93 per cent to 8,464 deals from the 8,304 deals posted in the previous trading session.
The busiest equity for the trading day was Japaul with the sale of 71.7 million units valued at N158.0 million, eTranzact exchanged 70.7 million units worth N477.5 million, Tantalizers sold 57.3 million units for N101.2 million, FCMB traded 33.0 million units worth N297.3 million, and Universal Insurance transacted 27.1 million units valued at N9.6 million.
A total of 36 stocks ended on the gainers’ chart, while 15 stocks finished on the losers’ table, indicating a positive market breadth index and strong investor sentiment.
The trio of Aradel Holdings, Ikeja Hotel and Caverton gained 10.00 per cent each to trade at N550.00, N8.80, and N1.98, respectively, as Africa Prudential rose by 9.87 per cent to N17.25 and Golden Guinea Breweries soared by 9.64 per cent to N8.64.
On the flip side, Austin Laz lost 10.00 per cent to close at N1.62, ABC Transport crashed by 8.00 per cent to N1.15, Royal Exchange slumped by 7.69 per cent to 60 Kobo, Secure Electronic Technology plunged by 5.26 per cent to 54 Kobo, and The Initiates crumbled by 4.26 per cent to N2.25.
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