Economy
Uncertainty About Tariffs, Looming Jobs Report May Lead to Choppy Trading
By Investors Hub
The major U.S. index futures are pointing to a modestly higher opening on Thursday following the mixed performance seen in the previous session.
Despite the upward momentum, traders may be reluctant to make significant moves ahead of the release of the Labor Department?s closely watched monthly jobs report on Friday.
Employment is expected to jump by 200,000 jobs in February, matching the increase seen in January. The unemployment rate is expected to dip to 4.0 percent from 4.1 percent.
Uncertainty about the details of President Donald Trump?s planned tariffs on steel and aluminum imports may also keep some traders on the sidelines.
After initially moving to the downside, stocks fluctuated over the course of the trading session on Wednesday. While the major averages all climbed well off their worst levels of the day, only the Nasdaq managed to close in positive territory.
The major averages subsequently turned in a mixed performance on the day. The Nasdaq rose 24.64 points or 0.3 percent to 7,396.65, but the Dow fell 82.76 points or 0.3 percent to 24,801.36 and the S&P 500 edged down 1.32 points or 0.1 percent to 2,726.80.
The mixed close on Wall Street came after White House Press Secretary Sarah Sanders suggested Mexico and Canada could be exempt from President Donald Trump’s planned tariffs on steel and aluminum imports.
“We expect that the President will sign something by the end of the week,” Sanders said. “And there are potential carve-outs for Mexico and Canada based on national security and possibly other countries as well based on that process.”
She added, “That will be a case by case and country by country basis. It would be determined whether or not there is a national security exemption.”
Stocks initially came under pressure in reaction to news of the resignation of White House chief economic advisor Gary Cohn on Tuesday.
The resignation by Cohn, a free trade advocate, reportedly came amid a dispute over Trump’s plans to impose tariffs on steel and aluminum imports.
In a statement, Trump said Cohn did a “superb job in driving our agenda, helping to deliver historic tax cuts and reforms and unleashing the American economy once again.”
Trump said in a post on Twitter that he would make a decision on a new chief economic advisor “soon,” adding, “Many people wanting the job – will choose wisely!”
In U.S. economic news, payroll processor ADP released a report showing private sector employment increased by more than expected in the month of February.
ADP said employment in the private sector jumped by 235,000 jobs in February after surging up by a revised 244,000 jobs in January. Economists had expected an increase of about 195,000 jobs.
A separate report from the Commerce Department showed the trade deficit widened by more than expected in the month of January.
The report said the trade deficit widened to $56.6 billion in January from $53.9 billion in December, reaching its highest level since October of 2008. The deficit had been expected to widen to $55.1 billion.
Later in the day, the Federal Reserve released its Beige Book, which reinforced expectations the central bank will raise interest rates at its monetary policy meeting later this month.
The Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts, said economic activity expanded at a modest to moderate pace in January and February.
The Fed noted wage growth picked up to a moderate pace, with employers raising wages and expanding benefit packages in response to tight labor market conditions.
With regard to overall inflation, the Fed said price increases were seen in all twelve districts and most reports noted moderate inflation.
Most of the major sectors ended the day showing only modest moves, although considerable weakness was visible among gold stocks.
Reflecting the weakness in the gold sector, the NYSE Arca Gold Bugs Index slumped by 2.5 percent after jumping by 2 percent in the previous session. The pullback by gold stocks came amid a decrease by the price of the precious metal.
Energy stocks also saw significant weakness, moving lower along with the price of crude oil. While retail stocks also moved to the downside on the day, some strength emerged among biotechnology and real estate stocks.
By Adedapo Adesanya
The Organisation of the Petroleum Exporting Countries (OPEC) has once again trimmed its 2024 and 2025 oil demand growth forecasts.
The bloc made this in its latest monthly oil market report for December 2024.
The 2024 world oil demand growth forecast is now put at 1.61 million barrels per day from the previous 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, which is 900,000 barrels per day lower than the 1.54 million barrels per day earlier quoted.
On the changes, the group said 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.
The oil cartel had kept the 2024 outlook unchanged until August, a view it had first taken in July 2023.
OPEC and its wider group of allies known as OPEC+ earlier this month delayed its plan to start raising output until April 2025 against a backdrop of falling prices.
Eight OPEC+ member countries – Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman – decided to extend additional crude oil production cuts adopted in April 2023 and November 2023, due to weak demand and booming production outside the group.
In April 2023, these OPEC+ countries decided to reduce their oil production by over 1.65 million barrels per day as of May 2023 until the end of 2023. These production cuts were later extended to the end of 2024 and will now be extended until the end of December 2026.
In addition, in November 2023, these producers had agreed to voluntary output cuts totalling about 2.2 million barrels per day for the first quarter of 2024, in order to support prices and stabilise the market.
These additional production cuts were extended to the end of 2024 and will now be extended to the end of March 2025; they will then be gradually phased out on a monthly basis until the end of September 2026.
Members have made a series of deep output cuts since late 2022.
They are currently cutting output by a total of 5.86 million barrels per day, or about 5.7 per cent of global demand. Russia also announced plans to reduce its production by an extra 471,000 barrels per day in June 2024.
By Aduragbemi Omiyale
A minority equity stake in Chappal Energies Mauritius Limited has been acquired by a Nigerian energy firm, Aradel Holdings Plc.
This deal came a few days after Chappal Energies purchased a 53.85 per cent equity stake in Equinor Nigeria Energy Company Limited (ENEC).
Chappal Energies went into the deal with Equinor to take part in the oil and gas lease OML 128, including the unitised 20.21 per cent stake in the Agbami oil field, operated by Chevron.
Since production started in 2008, the Agbami field has produced more than one billion barrels of oil, creating value for Nigerian society and various stakeholders.
As part of the deal, Chappal will assume the operatorship of OML 129, which includes several significant prospects and undeveloped discoveries (Nnwa, Bilah and Sehki).
The Nnwa discovery is part of the giant Nnwa-Doro field, a major gas resource with significant potential to deliver value for Nigeria.
In a separate transaction, on July 17, 2024, Chappal and Total Energies sealed an SPA for the acquisition by Chappal of 10 per cent of the SPDC JV.
The relevant parties to this transaction are working towards closing out this transaction and Ministerial Approval and NNPC consent to accede to the Joint Operating Agreement have been obtained.
“This acquisition is in line with diversifying our asset base, deepening our gas competencies and gaining access to offshore basins using low-risk approaches.
“We recognise the strategic role of gas in Nigeria’s energy future and are happy to expand our equity holding in this critical resource.
“We are committed to the cause of developing the significant value inherent in the assets, which will be extremely beneficial to the country.
“Aradel hopes to bring its proven execution competencies to bear in supporting Chappal’s development of these opportunities,” the chief executive of Aradel Holdings, Mr Adegbite Falade, stated.
By Adedapo Adesanya
Afriland Properties Plc helped the NASD Over-the-Counter (OTC) Securities Exchange record a 0.04 per cent gain on Tuesday, December 10 as the share price of the property investment rose by 34 Kobo to N16.94 per unit from the preceding day’s N16.60 per unit.
As a result of this, the market capitalisation of the bourse went up by N380 million to remain relatively unchanged at N1.056 trillion like the previous trading day.
But the NASD Unlisted Security Index (NSI) closed higher at 3,014.36 points after it recorded an addition of 1.09 points to Monday’s closing value of 3,013.27 points.
The NASD OTC securities exchange recorded a price loser and it was Geo-Fluids Plc, which went down by 2 Kobo to close at N3.93 per share, in contrast to the preceding day’s N3.95 per share.
During the trading session, the volume of securities bought and sold by investors increased by 95.8 per cent to 2.4 million units from the 1.2 million securities traded in the preceding session.
However, the value of shares traded yesterday slumped by 3.7 per cent to N4.9 million from the N5.07 million recorded a day earlier, as the number of deals surged by 27.3 per cent to 14 deals from 11 deals.
Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 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 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.
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