Economy
Upward Momentum May Lead to Continued Strength on Wall Street
By Investors Hub
The major U.S. index futures are pointing to a higher opening on Tuesday, with stocks likely to extend the upward trend seen in recent sessions.
The markets may benefit from recent upward momentum, which has helped the major averages close higher for three consecutive sessions.
The recent advance by stocks comes despite lingering concerns about a global trade war as tariffs on billions of dollars of U.S. and Chinese goods are set to take effect later this week.
Signs of continued strength in the U.S. economy despite the ongoing trade disputes may be inspiring traders to pick up stocks.
Trading activity is likely to remain relatively subdued, however, as the markets are due to close earlier than normal ahead of the July 4th holiday.
Following the holiday, traders are likely to keep a close eye on the minutes of the latest Federal Reserve meeting as well as the Labor Department?s monthly jobs report.
After coming under pressure early in the session, stocks showed a significant turnaround over the course of the trading day on Monday. The major averages climbed well off their lows of the session and into positive territory.
The major averages all closed higher, with the Nasdaq outperforming its counterparts. While the Nasdaq advanced 57.38 points or 0.8 percent to 7,567.69, the Dow edged up 35.77 points or 0.2 percent to 24,307.18 and the S&P 500 rose 8.34 points or 0.3 percent to 2,726.71.
The rebound on Wall Street came following the release of a report from the Institute for Supply management showing growth in U.S. manufacturing activity unexpectedly accelerated in the month of June.
The ISM said its purchasing managers index climbed to 60.2 in June after rising to 58.7 in May, with a reading above 50 indicating growth in manufacturing activity. Economists had expected the index to edge down to 58.4.
“The increase in the ISM manufacturing index in June is a clear sign that, for now at least, the strength of the domestic economy is more than offsetting any increased uncertainty on trade policy,” said Michael Pearce, Senior U.S. Economist at Capital Economics.
He added, “However, with the dollar appreciating by 6% since April, global growth slowing and retaliatory tariffs just beginning to bite, the sector looks unlikely to fare so well for long.”
Stocks initially moved lower on lingering trade concerns as tariffs on $34 billion worth of Chinese imports to the U.S. and a matching $34 billion worth of U.S. exports to China are due to take effect on July 6th.
Adding to the concerns, news website Axios obtained a leaked draft of bill ordered by President Donald Trump that would declare America’s abandonment of fundamental World Trade Organization rules.
The bill, known as the United States Fair and Reciprocal Tariff Act, essentially provides Trump a license to raise U.S. tariffs at will, without congressional consent, Axios said.
“It would be the equivalent of walking away from the WTO and our commitments there without us actually notifying our withdrawal,” a source familiar with the bill told Axios.
Nonetheless, the source noted Congress would never give the president the authority, and a White House spokeswoman told Axios the administration does not have actual legislation it is preparing to rollout.
A previous report from Axios said Trump has repeatedly told top White House officials he wants to withdraw the United States from the World Trade Organization.
Additionally, the European Commission has warned the Trump administration that imposing tariffs on cars imported from Europe will harm trade, growth and jobs in the U.S. and abroad.
Overall trading activity was somewhat subdued, however, with the upcoming July 4th holiday keeping some traders on the sidelines.
Later this week, trading may be impacted by reaction to the Labor Department’s monthly jobs report and the minutes of the latest Federal Reserve meeting.
Computer hardware stocks showed a strong move to the upside on the day, contributing to the advance by the tech-heavy Nasdaq. Reflecting the strength in the hardware sector, the NYSE Arca Computer Hardware Index climbed 1.3 percent.
Notable strength also emerged among transportation and biotechnology stocks, with the Dow Jones Transportation Average and the NYSE Arca Biotechnology Index both rising by 1 percent.
On the other hand, substantial weakness remained visible among oil service stocks, as reflected by the 3 percent slump by the Philadelphia Oil Service Index.
Other energy stocks also moved to the downside, with the NYSE Arca Oil Index and the NYSE Arca Natural Gas Index falling by 1.4 percent and 1.3 percent, respectively.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed higher by 1.41 per cent on Friday, May 15, supported by four securities on the platform.
During the session, FrieslandCampina Wamco Plc added N14.24 to its share price to sell for N159.00 per unit, in contrast to the previous day’s N144.76 per unit.
Further, Central Securities and Clearing System (CSCS) Plc appreciated by N1.34 to N72.34 per share from N71.00 per share, Geo-Fluids Plc improved its price by 4 Kobo to N2.94 per unit from N2.90 per unit, and Industrial and General Insurance (IGI) Plc gained 1 Kobo to trade at 61 Kobo per share compared with Thursday’s closing price of 60 Kobo per share.
As a result, the NASD Unlisted Security Index (NSI) rose by 58.20 points to 4,188.41 points from 4,130.21 points, and the market capitalisation soared by N34.82 billion to N2.506 trillion from N2.471 trillion on Thursday.
During the session, the volume of trades went up by 180.8 per cent to 1.2 million units from 417,349 units, and the value of transactions increased by 29.8 per cent to N29.8 million from N23.2 million, while the number of deals fell by 22.6 per cent to 24 deals from 31 deals.
Great Nigeria Insurance (GNI) Plc ended the day as the most traded stock by value on a year-to-date basis with 3.4 billion units sold for N8.4 billion, followed by CSCS Plc with 60.8 million units exchanged for N4.1 billion, and Okitipupa Plc with 27.9 million units valued at N1.9 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by Resourcery Plc with 1.1 billion units transacted for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units traded for N1.2 billion.
By Dipo Olowookere
The bears overpowered the Nigerian Exchange (NGX) Limited on Friday, sinking it further by 0.76 per cent when the closing gong was struck by 4 pm.
The nation’s flagship equity market was under selling pressure during the session, as investors booked profits after the shares witnessed price appreciation in the past trading sessions.
The energy sector was the most impacted, as it shed 4.43 per cent. The consumer goods index declined by 0.90 per cent, the banking counter decreased by 0.15 per cent, and the industrial goods sector lost 0.08 per cent, while the insurance counter gained 2.42 per cent, which was not enough to salvage the situation.
Consequently, the All-Share Index (ASI) contracted by 1,912.19 points to 250,330.92 points from 252,243.11 points, and the market capitalisation moderated by 1.225 trillion to N160.444 trillion from N161.669 trillion.
Zichis was the worst-performing stock for the session after it gave up 9.97 per cent to close at N29.43, FTN Cocoa slipped by 9.95 per cent to N8.96, The Initiates slumped by 9.90 per cent to N32.30, LivingTrust Mortgage Bank tumbled by 9.88 per cent to N3.83, and International Energy Insurance dropped 9.71 per cent to trade at N2.79.
The best-performing stock was ABC Transport, which grew by 10.00 per cent to N6.27. May and Baker also appreciated by 10.00 per cent to N47.30, SCOA Nigeria surged by 9.98 per cent to N33.05, Trans-Nationwide Express expanded by 9.97 per cent to N7.06, and DAAR Communications jumped 9.76 per cent to N2.25.
Yesterday, investors traded 1.1 billion shares worth N44.3 billion in 65,744 deals compared with the 1.0 billion shares valued at N41.6 billion transacted in 74,822 deals a day earlier. This indicated a dip in the number of deals by 12.13 per cent, and a rise in the trading volume and value by 10.00 per cent and 6.49 per cent, respectively.
Chams was the busiest equity for the day, with 328.5 million units sold for N1.1 billion. UBA traded 61.6 million units worth N2.7 billion, First Holdco transacted 58.7 million units valued at N4.2 billion, Secure Electronic Technology exchanged 51.9 million units worth N45.0 million, and Access Holdings traded 51.8 million units valued at N1.3 billion.
By Adedapo Adesanya
The last trading session of the week at the Nigerian Autonomous Foreign Exchange Market (NAFEX) ended on a negative note for the Naira on Friday, May 15, as it lost N15 Kobo or 0.1 per cent against the Dollar to trade at N1,371.04/$1 compared with the previous day’s N1,370.89/$1.
However, it further appreciated against the Pound Sterling in the same market segment yesterday by N20.77 to close at N1,830.61/£1 versus Thursday’s value of N1,851.38/£1, and gained N7.91 against the Euro to settle at N1,595.07/€1 versus N1,602.98/€1.
At the GTBank FX desk, the Naira lost N2 against the US Dollar during the session to sell at N1,383/$1 compared with the preceding session’s N1,381/$1, and at the black market, it remained unchanged at N1,385/$1.
The Naira is forecast to be broadly stable, supported by Dollar sales by the Central Bank of Nigeria (CBN) amid steady, higher oil receipts, with the market settling into a balance.
Policy direction is also expected to give the market some boost as the CBN said the new edition of the FX market guidelines will deepen liquidity, improve transparency and strengthen confidence in the country’s foreign exchange market.
According to the Governor of the CBN, Mr Yemi Cardoso, the update is due to changing global economic realities, domestic reforms and the need for a more coherent and forward-looking regulatory framework. According to him, the last edition of the FX manual was issued in 2018, making the latest review both timely and necessary.
Meanwhile, the cryptocurrency market plunged into the red zone as rising bond yields hit risk assets across markets, while traders are increasingly betting the Federal Reserve may need to raise rates again. Rising energy prices and resurging inflation could force central banks back into tightening mode.
Cardano (ADA) shrank by 4.4 per cent to $0.2557, Dogecoin (DOGE) slid by 3.7 per cent to $0.1104, Ripple (XRP) depreciated by 3.5 per cent to $1.41, Solana (SOL) crashed by 3.5 per cent to $87.81, and Binance Coin (BNB) slumped by 3.4 per cent to $659.64.
Further, Bitcoin (BTC) declined by 2.6 per cent to $78,547.49, Ethereum (ETH) lost 2.1 per cent to quote at $2,209.19, and TRON (TRX) tumbled by 0.7 per cent to $0.3509, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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