Economy
Trade War Concerns Resurface Again on Wall Street
By Investors Hub
The major U.S. index futures are pointing to a lower opening on Friday following the upward move seen over the course of the three previous sessions.
Renewed trade war concerns may weigh on the markets after President Donald Trump threatened China with $100 billion of additional tariffs.
The threat from Trump comes after the U.S. and China traded tit-for-tat tariff announcements earlier in the week, leading to considerable volatility on Wall Street.
Responding to the threat from Trump, the Chinese Commerce Ministry declared it would ?not hesitate? to retaliate to new tariffs ?at any cost.?
However, Trump said the U.S. is still prepared to have discussions with China in support of its commitment to achieving free, fair, and reciprocal trade.
Negative sentiment may also be generated by a report from the Labor Department showing U.S. job growth slowed by much more than anticipated in the month of March.
After turning higher over the course of the trading session on Wednesday, stocks saw some further upside during trading on Thursday. The major averages fluctuated in afternoon trading but managed to end the day firmly in positive territory.
The major averages closed higher for the third straight day following the sell-off on Monday. The Dow jumped 240.92 points or 1 percent to 24,505.22, the Nasdaq rose 34.44 points or 0.5 percent to 7,076.55 and the S&P 500 climbed 18.15 points or 0.7 percent to 2,662.84.
The continued strength on Wall Street reflected easing concerns about a potential trade war between the U.S. and China, which have recently led to considerable volatility on Wall Street.
The U.S. and China have engaged in tit-for-tat tariff announcements, but traders seem optimistic that the threats are only a precursor to negotiations of a trade agreement between the two countries.
Amid the focus on trade relations, the Commerce Department released a report showing the U.S. trade deficit widened by more than anticipated in the month of February.
The Commerce Department said the trade deficit widened to $57.6 billion in February from a revised $56.7 billion in January. Economists had expected the trade deficit to widen to $56.8 billion.
The wider than expected trade deficit in February was the widest since the $60.2 billion trade deficit recorded in October of 2008.
However, Andrew Hunter, U.S. Economist at Capital Economics, noted the wider trade deficit was entirely due to a one-off royalty payment for broadcasting rights to the Winter Olympics.
A separate report from the Labor Department showed a bigger than expected increase in initial jobless claims in the week ended March 31st.
The report said initial jobless claims climbed to 242,000, an increase of 24,000 from the previous week’s revised level of 218,000. Economists had expected jobless claims to rise to 225,000.
Energy stocks showed a substantial move to the upside on the day amid a modest increase by the price of crude oil. Reflecting the strength in the energy sector, the Philadelphia Oil Service Index surged up by 3.4 percent, the NYSE Arca Natural Gas Index jumped by 2.8 percent and the NYSE Arca Oil Index advanced by 1.9 percent.
Considerable strength was also visible among steel stocks, as reflected by the 2.8 percent gain posted by the NYSE Arca Steel Index. The strength in the sector reflected the easing trade war concerns.
Chemical stocks also saw significant strength, driving the S&P Chemicals Index up by 1.9 percent. The index continued to rebound after hitting its lowest closing level in nearly seven months on Monday.
Brokerage, retail and housing stocks also moved notably higher, while some weakness emerged among semiconductor and biotechnology stocks.
By Adedapo Adesanya
Brent futures climbed $1.06 or 1.3 per cent to $83.55 a barrel on Friday amid ongoing uncertainty about the negotiations in progress that determine control of and reopening of the key shipping artery of the Strait of Hormuz.
In the same vein, the US West Texas Intermediate (WTI) futures finished at $78.18 a barrel after it chalked up 89 cents or 1.15 per cent.
Iran is reviewing a bill to ban American and Israeli vessels from the Strait of Hormuz, through which roughly a fifth of the world’s oil and liquefied natural gas normally passed before the war began at the end of February.
Market analysts noted that while this week’s signals on a potential deal have sent a roller-coaster ride in market sentiment, the market remains in the dark as to what needs to happen for the agreement to be clinched.
Part of the question being asked is whether the Iran-Oman agreement would allow a US-flagged vessel to transit the Strait of Hormuz or allow a vessel headed for an American port to go through.
Shipping through Hormuz remains heavily constrained as Middle East oil production is still well below pre-war levels while attacks on commercial vessels have continued even as negotiators discuss possible arrangements for the waterway.
Some also said that this week’s developments have signalled that hostilities between Iran and the US are not yet over. This is because the proposed deal is not easily workable because of sanctions and restrictive insurance clauses on any payments by the US government.
Iran is seeking fees of between 5 per cent and 7 per cent of the price of cargoes from ships using the strait, while Oman is discussing fees of about 3 per cent, while the Donald Trump administration wants no fees at all.
Citi has raised its third-quarter Brent crude forecast to $80 per barrel from $75 as the war drags on and repeated attempts at a deal fail to restore normal oil flows through the strait.
The bank still expects the conflict to be resolved, but the five-month war has lasted longer than Citi anticipated and kept more geopolitical risk in crude prices. Citi left its fourth-quarter Brent forecast unchanged at $70 per barrel and still sees the benchmark averaging $65 in 2027.
By Adedapo Adesanya
Nigerian businessman and chief executive of Dangote Industries Limited, Mr Aliko Dangote, has unveiled plans for a new phase of investments and acquisitions as the conglomerate pushes towards its target of generating $100 billion in annual revenue by 2030.
Mr Dangote disclosed this while receiving a delegation of senior executives from global investment banking and financial services firm Goldman Sachs, led by co-chief executive of Goldman Sachs International and Global Co-Head of Investment Banking, Mr Anthony Gutman, during a tour of the Dangote Petroleum Refinery & Petrochemicals and Dangote Fertiliser Limited complex in Lagos.
Speaking after the visit, Mr Dangote said the refinery and associated industrial facilities underscore the transformative impact of long-term investment in Africa, stressing that the group’s ambitions extend beyond its current strategic plan.
“No matter how we try to explain what we have built, you cannot fully appreciate it until you see it. But this is only the beginning. We need to look beyond 2030.
“The next phase of our journey will include new investments and acquisitions as we continue to scale the business,” he said.
He added that detailed internal modelling had reinforced management’s confidence that the Group’s target of generating $100 billion in annual revenue by 2030 was achievable.
According to him, the projections were based on conservative assumptions and had strengthened the company’s conviction to pursue an even more ambitious long-term growth strategy.
Mr Dangote also revealed that the strong participation of employees in the refinery’s recent private placement reflected growing internal confidence in the company’s long-term strategy and future prospects.
The Goldman Sachs delegation, after an extensive tour of the 700,000 barrels-per-day refinery, described the project as an extraordinary achievement.
“It is extraordinary what Mr Dangote and the whole organisation have achieved. The ambition, the scale of the project, the quality of the project and the culture of the people is very impressive,” the executives said.
According to a statement issued by Dangote Group on Friday, the delegation was led by Mr Anthony Gutman and included Mr Adib N. Zouein, Co-Head of EMEA Emerging Markets Regional Sales and Head of the Middle East and North Africa region for Global Banking & Markets Public; Mr Ryad Yousuf, Global Head of FICC Sales Strats and Structuring; and Mr Jimi Adesanya, Head of Sub-Saharan Africa Sales (excluding South Africa).
The visitors were received by Dangote; Group Vice President, Oil & Gas, Mr Devakumar Edwin; Managing Director and Chief Executive Officer of Dangote Petroleum Refinery & Petrochemicals, Mr David Bird; Group Executive Director, Oil & Gas, Ms Fatima Aliko Dangote; Chief of Staff to the President/CEO, Ibrahim Dikko; Group Chief Branding and Communication Officer, Mr Anthony Chiejina; Group Chief Economist, Mr Hassan Mahmud; Group Chief Strategy Officer, Mr Aliyu Suleiman; and Head of Administration, Dangote Petroleum Refinery & Petrochemicals, Mr Musa Bala, among other senior executives.
By Adedapo Adesanya
The Senate Public Accounts Committee has heard that Nigeria spent N1.16 trillion on fuel subsidy in 2021, while N1.20 trillion was deducted from federation crude oil sales proceeds during the same period.
The disclosure came from the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Mr Mohammed Bello Shehu, during the committee’s ongoing investigation into the 2021 to 2023 Nigeria Extractive Industries Transparency Initiative (NEITI) audit reports on the oil and gas sector.
According to the commission, crude and petroleum product losses cost N16.2 billion, pipeline repairs accounted for N22.05 billion, while strategic stock holding attracted N6.75 billion.
The revelations come against the backdrop of Nigeria’s long-running fuel subsidy regime, which successive governments maintained to keep the pump price of petrol artificially low despite mounting fiscal pressures.
Over the years, subsidy payments consumed trillions of Naira, significantly reducing revenues available to the three tiers of government and contributing to widening budget deficits.
The issue reached a turning point in May 2023 when President Bola Tinubu announced the removal of fuel subsidy during his inauguration speech, declaring that “fuel subsidy is gone.” The decision followed years of concerns over the rising cost of the programme, allegations of fraud, and repeated recommendations by fiscal authorities and international financial institutions that the subsidy had become unsustainable.
The removal triggered a sharp increase in the pump price of Premium Motor Spirit (petrol), leading to higher transportation and living costs across the country. In response, the federal government introduced a series of palliative measures, including cash transfers, support for mass transit, and wage-related interventions, while arguing that savings from the subsidy would be redirected to infrastructure, education, healthcare, and other critical sectors of the economy.
The commission also argued that the current method of calculating the 13 per cent derivation fund undermines the constitutional intention of the policy.
Meanwhile, the committee stood down the Niger Delta Development Commission’s presentation until next Wednesday to allow lawmakers review its submission.
The committee also expressed displeasure over the absence of the Auditor-General of the Federation, warning that he must appear before lawmakers next Tuesday or face compulsory appearance through the constitutional powers of the National Assembly.
