Economy
Upbeat Jobs Data May Generate Early Buying Interest
By Investors Hub
The major U.S. index futures are currently pointing to a higher opening on Friday, with stocks likely to move back to the upside after closing lower for two straight days.
Early buying interest is likely to be generated in reaction to a closely watched Labor Department report showing much stronger than expected job growth in the month of April.
The stronger than expected job growth contributed to an unexpected drop in the unemployment rate, which fell to its lowest level in nearly fifty years.
After failing to sustain an early move to the upside, stocks moved mostly lower over the course of the trading session on Thursday. The downturn on the day extended Wednesday?s late-day pullback.
The major averages climbed off their worst levels of the day but remained stuck in negative territory. The Dow slid 122.35 points or 0.5 percent to 26,307.79, the Nasdaq dipped 12.87 points or 0.2 percent to 8,036.77 and the S&P 500 fell 6.21 points or 0.2 percent to 2,917.52.
The pullback on Wall Street was attributed to continued disappointment with yesterday’s remarks by Federal Reserve Chairman Jerome Powell suggesting the central bank is not likely to lower interest rates in the near future as some had hoped.
In his post-monetary policy meeting press conference, Powell said the Fed sees “transitory factors” contributing to recent low inflation readings.
Powell said the Fed would take persistently low inflation into account when setting policy but currently expects inflation to return to the 2 percent objective.
Traders also moved out of risky assets such as stocks ahead of the Labor Department’s closely watched monthly jobs report.
Meanwhile, traders largely shrugged off the release of a batch of largely upbeat U.S. economic data, including a Labor Department report showing a spike in productivity.
The Labor Department said productivity surged up by 3.6 percent in the first quarter after climbing by a downwardly revised 1.3 percent in the fourth quarter.
Economists had expected production to jump by 2.2 percent compared to the 1.9 percent increase that had been reported for the previous quarter.
Meanwhile, the report also said unit labor costs dropped by 0.9 percent in the first quarter after soaring by 2.5 percent in the fourth quarter.
The pullback in unit labor costs came as a surprise to economists, who had expected costs to climb by 1.5 percent during the quarter.
“The good news is the economy is entirely capable of producing the kind of productivity necessary to keep inflation in check if growth accelerates. Hence, we can have faster growth, and real wage increases, too,” said FTN Financial Chief Economist Chris Low.
He added, “The bad news, as featured prominently in yesterday’s post-FOMC press conference, the Fed will continue to fight to prevent either from becoming a sustained reality, for our own good, of course.”
A separate report from the Commerce Department showed new orders for manufactured goods jumped by more than expected in March amid a substantial rebound in orders for transportation equipment.
The Commerce Department said factory orders spiked by 1.9 percent in March after falling by a revised 0.3 percent in February. Economists had expected orders to surge up by 1.5 percent.
Tobacco stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Tobacco Index down by 2.5 percent.
Significant weakness was also visible among energy stocks, which moved sharply lower along with the price of crude oil.
Gold stocks also saw considerable weakness amid a steep drop by the price of the precious metal, while notable strength emerged among transportation, semiconductor, and biotechnology stocks.
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.
By Adedapo Adesanya
The euphoria around the recent appreciation of the Naira eased on Wednesday, December 11 after its value shrank against the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N5.23 or 0.3 per cent to N1,547.50/$1 from the N1,542.27/$1 it was valued on Tuesday.
It was observed that spectators’ activities may have triggered the weakening of the local currency in the official market at midweek as they tried to fight back and ensure the value of funds in foreign currencies strengthened.
The domestic currency was regaining its footing after the Central Bank of Nigeria (CBN) launched an Electronic Foreign Exchange Matching System (EFEMS) platform to tackle speculation and improve transparency in Nigeria’s FX market.
At midweek, the Nigerian currency depreciated against the Pound Sterling by N3.56 to close at N1,958.68/£1 compared with the preceding day’s N1,955.12/£1 and against the Euro, it slumped by 34 Kobo to trade at N1,612.66/€1, in contrast to the previous session’s N1,613.00/€1.
As for the black market segment, the Naira lost N45 against the American currency during the session to quote at N1,670/$1 compared with the N1,625/$1 it was traded a day earlier.
A look at the cryptocurrency market showed a recovery following profit-taking as the US Consumer Price Index report matched economist forecasts.
The news was enough to convince traders that the Federal Reserve is certain to trim its benchmark fed funds rate another 25 basis points at its meeting next week.
The move also saw Bitcoin (BTC), the most valued coin, return to the $100,000 mark as it added a 2.9 per cent gain and sold for $100,566.12.
The biggest gainer was Cardano (ADA), which jumped by 15.00 per cent to trade at $1.16, as Litecoin (LTC) appreciated by 10.4 per cent to sell for $121.76, and Ethereum (ETH) surged by 7.0 per cent to $3,929.30, while Dogecoin (DOGE) recorded a 6.7 per cent growth to finish at $0.4181.
Further, Binance Coin (BNB) went up by 5.2 per cent to $716.72, Solana (SOL) expanded by 4.6 per cent to $229.77, and Ripple (XRP) increased by 4.2 per cent to $2.43, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 apiece.
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