Economy
US, China Trade Talks Dominate Wall Street
By Investors Hub
The major U.S. index futures are pointing to a mixed opening on Friday, with stocks likely to continue experiencing choppy trading following the lackluster performance seen in the previous session.
Traders may be reluctant to make significant moves amid uncertainty about the second round of trade talks between the U.S. and China.
Various news outlets said China had offered to reduce its trade surplus with the U.S. by $200 billion, although Chinese Foreign Ministry spokesperson Lu Kang denied the reports.
?This rumor is not true. This, I can confirm,? Lu told reporters. ?I do not know about the offers made by either party.?
He added, ?As we know the consultations are still underway. I am not getting ahead of that. The consultations themselves are constructive.?
After ending Wednesday?s trading mostly higher, stocks showed a lack of direction over the course of the trading session on Thursday. The major averages spent the day bouncing back and forth across the unchanged line before closing modestly lower.
The major averages ended the day in negative territory but off their lows of the session. The Dow dipped 54.95 points or 0.2 percent to 24,713.98, the Nasdaq slipped 15.82 points or 0.2 percent to 7,382.47 and the S&P 500 edged down 2.33 points or 0.1 percent to 2,720.13.
The choppy trading on Wall Street came as traders expressed some uncertainty about the second round of trade talks between the U.S. and China.
Blaming the trade policies of previous administrations, President Donald Trump expressed some doubt about whether the high-level trade talks with China will be successful.
Trump told reporters he tends to doubt the talks will be successful in remarks during an Oval Office meeting with NATO Secretary General Jens Stoltenberg.
“The reason I doubt it is because China has become very spoiled,” Trump said. “The European Union has become very spoiled. Other countries have become very spoiled, because they always got 100 percent of whatever they wanted from the United States.”
However, Trump also claimed he would not allow the U.S. to be taken advantage of anymore and sounded more optimistic in later remarks.
“I can only tell you this; we’re going to come out fine with China,” Trump said. “Hopefully, China’s going to be happy. I think we will be happy.”
The comments from Trump come as Chinese officials have traveled to Washington for a second round of trade talks with Treasury Secretary Steven Mnuchin and others.
On the U.S. economic front, the Conference Board released a report showing a continued increase by its index of leading economic indicators.
The Conference Board said its leading economic index rose by 0.4 percent in April, matching the upwardly revised increase in March as well as economist estimates.
Ataman Ozyildirim, Director of Business Cycles and Growth Research at the Conference Board, said, “April’s increase and continued uptrend in the U.S. LEI suggest solid growth should continue in the second half of 2018.”
“However, the LEI’s six-month growth rate has recently moderated somewhat, suggesting growth is unlikely to strongly accelerate,” he added.
Before the start of trading, the Labor Department released a report showing a bigger than expected increase in initial jobless claims in the week ended May 12th.
The report said initial jobless claims rose to 222,000, an increase of 11,000 from the previous week’s unrevised level of 211,000. Economists had expected jobless claims to inch up to 215,000.
Meanwhile, a separate report from the Philadelphia Federal Reserve unexpectedly showed a significant acceleration in the pace of growth in regional manufacturing activity in the month of May.
Among individual stocks, shares of J.C. Penney (JCP) moved sharply lower after the department store chain reported a narrower than expected first quarter adjusted loss but cut its full-year earnings guidance.
Retail giant Wal-Mart (WMT) also moved to the downside on the day despite reporting first quarter results that exceeded analyst estimates on both the top and bottom lines.
On the other hand, shares of Dillard’s (DDS) jumped after the department store operator reported first quarter earnings that exceeded analyst estimates.
Most of the major sectors showed only modest moves on the day, contributing to the lackluster performance by the broader markets.
Energy stocks saw considerable strength, however, with the sector continuing to perform well even as the price of crude oil pulled back off its early highs.
Reflecting the strength in the energy sector, the NYSE Arca Oil & Gas Index advanced by 1.8 percent, while the NYSE Arca Natural Gas Index and the Philadelphia Oil Service Index climbed by 1.7 percent and 1.5 percent, respectively.
Brokerage and housing stocks also saw modest strength on the day, while utilities stocks extended the downward move seen over the past few sessions.
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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