Economy
US-China Trade Talks Uncertainty Ruffles Wall Street
By Investors Hub
The major U.S. index futures are pointing to a roughly flat opening on Wednesday, with stocks likely to extend the lackluster performance seen in the previous session.
Traders may be reluctant to make significant moves as they wait for developments regarding the latest round of trade talks between the U.S. and China.
Officials from the U.S. and China are meeting in Washington this week as the world’s two largest economies attempt to reach a long-term trade deal.
The U.S. and China currently face an early March deadline to strike an agreement, although President Donald Trump has suggested the deadline could be postponed.
An editorial by state-run Chinese newspaper the Global Times warned the global stock markets could face a “catastrophic strike” if Trump raises tariffs on Chinese goods as currently planned.
“In terms of avoiding such blows, the Trump administration is probably the most pressured,” the Global Times wrote. “Thus in general, by the end of the trade negotiations, China and the US have become more psychologically equal.”
“Both sides have showed their strength and volition in the unprecedented trade war: The US didn’t easily stop and China was not that fragile to be defeated,” the paper added. “However, it has proven no empty talk that in a long-term trade war, both sides would eventually lose.”
Trump has claimed China is under pressure to avoid an increase in tariffs, citing recent weakness in the Chinese economy and stock markets.
Traders are also likely to look ahead to this afternoon’s release of the minutes of the Federal Reserve’s monetary policy meeting held in late January.
The minutes may shed additional light on the Fed’s shift toward a “patient” approach regarding future interest rate hikes.
Stocks fluctuated over the course of the trading session on Tuesday as traders returned to their desks following the long holiday weekend.
After spending the morning bouncing back and forth across the unchanged line, the major averages climbed more firmly into positive territory in the afternoon.
The major averages pulled back going into the close but still ended the day modestly higher. The Dow inched up 8.07 points or less than a tenth of a percent to 25,891.32, the Nasdaq rose 14.36 points or 0.2 percent to 7,486.77 and the S&P 500 edged up 4.16 points or 0.2 percent to 2,779.76.
The choppy trading came amid uncertainty about the potential for a trade deal between the U.S. and China as the next round of trade talks get underway in Washington, D.C. this week.
News that China accused the U.S. of attempting to curtail its technology development by putting pressure on allies to shun networks supplied by Huawei Technologies raised concerns about tensions between the world’s two largest economies.
However, President Donald Trump later told reporters the U.S.-China trade talks are “going very well” and once again hinted that an early March deadline to reach a deal could be postponed.
“I can’t tell you exactly about timing, but the date is not a magical date,” Trump said in the Oval Office. “A lot of things can happen.”
Trump claimed China is “trying to move fast” so that an increase in tariffs on Chinese goods currently set to take effect does not happen.
On the U.S. economic front, the National Association of Home Builders released a report showing a much bigger than expected improvement in homebuilder confidence in the month of February.
The report said the NAHB/Wells Fargo Housing Market Index climbed to 62 in February after rising to 58 in January. Economists had expected the index to inch up to 59.
With the increase, the index continued to recover after hitting a more than three-year low of 56 in December.
“Ongoing reduction in mortgage rates in recent weeks coupled with continued strength in the job market are helping to fuel builder sentiment,” said NAHB Chairman Randy Noel.
He added, “In the aftermath of the fall slowdown, many builders are reporting positive expectations for the spring selling season.”
Most of the major sectors ended the day showing only modest moves, although substantial strength was visible among gold stocks.
Reflecting the strength in the gold sector, the NYSE Arca Gold Bugs Index spiked by 4.4 percent to its best closing level in over seven months. The rally by gold stocks came amid a sharp increase by the price of the precious metal.
Considerable strength was also visible among brokerage stocks, as reflected by the 1.4 percent gain posted by the NYSE Arca Broker/Dealer Index. The index reached a three-month closing high.
On the other hand, telecom stocks saw substantial weakness on the day, dragging the NYSE Arca North American Telecom Index down by 3.1 percent. The steep drop by the index came after it skyrocketed to its best closing level in over two months last Friday.
By Adedapo Adesanya
Four securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.95 per cent on Friday, erasing N41.17 billion from the bourse, which had its market capitalisation at N2.567 trillion compared with the previous session’s N2.618 trillion.
In the same vein, the NASD Unlisted Security Index (NSI) decreased at the close of business by 85.28 points to 4,277.07 points from 4,362.32 points.
The price decliners were led by 11 Plc, which gave up N20.50 to sell at N200.50 per share compared with the preceding day’s N221.00 per share, FrieslandCampina Wamco Nigeria Plc dropped N16.94 to close at N155.20 per unit versus Thursday’s closing price of N172.14 per unit, Central Securities Clearing System (CSCS) Plc went down by N2.11 to N84.68 per share from N86.79 per share, and Afriland Properties Plc lost 11 Kobo to end at N16.74 per unit, in contrast to the N16.85 per unit it closed a day earlier.
During the trading day, the value of transactions jumped by 172.1 per cent to N29.9 million from the preceding session’s N10.9 million, and the volume of trades soared by 136.5 per cent to 955,096 units from the previous 403,901 units, while the number of deals went down by 11.4 per cent to 31 deals from 35 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 68.6 million units sold for N4.7 billion.
GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, trailed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Dipo Olowookere
The last trading session of this week on the floor of the Nigerian Exchange (NGX) Limited ended on a negative note, with a 0.66 per cent loss on Friday.
This was influenced by sustained selling pressure and cautious trading, which forced investors into profit-taking.
Data obtained by Business Post showed that the energy sector fell by 4.66 per cent, the insurance counter dipped by 2.23 per cent, the consumer goods index depreciated by 0.96 per cent, and the banking segment shed 0.28 per cent, while the industrial goods space remained unchanged.
At the close of business, the All-Share Index (ASI) of Nigeria’s stock exchange went down by 1,531.81 points to 232,049.02 points from 233,580.83 points, and the market capitalisation dropped N983 billion to settle at N148.905 trillion compared with Thursday’s N149.888 trillion.
Aradel was the worst-performing equity after it lost 10.00 per cent to close at N1,417.50. International Energy Insurance slipped by 9.95 per cent to N5.79, Trans-Nationwide Express depreciated by 9.89 per cent to N3.28, eTranzact crashed by 9.79 per cent to N14.75, and UPDC slumped by 9.72 per cent to N28.12.
The best-performing equity for the day was Universal Insurance, which gained 6.32 per cent to close at N1.01, McNichols grew by 5.52 per cent to N8.60, Linkage Assurance expanded by 4.67 per cent to N1.57, NGX Group appreciated by 4.35 per cent to N120.00, and Transcorp increased by 3.62 per cent to N41.50.
As look at the activity level indicated that investors traded 388.7 million stocks worth N18.4 billion in 44,631 deals compared with the 393.7 million stocks valued at N19.2 billion executed in 45,813 deals a day earlier, representing a decline in the trading volume, value, and number of deals by 1.27 per cent, 4.17 per cent, and 2.58 per cent, respectively.
By Adedapo Adesanya
The Naira recorded a loss of 82 Kobo or 0.06 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, June 26, exchanging at N1,380.93/$1, in contrast to the previous day’s rate of N1,380.11/$1.
Equally, the domestic currency further weakened against the Pound Sterling in the official FX market yesterday by N6.06 to settle at N1,824.90/£1 versus the preceding session’s N1,818.84/£1, and lost N10.74 on the Euro to sell at N1,577 .58/€1 versus N1,566.84/€1.
At the GTBank forex counter, the Naira depreciated against the greenback during the session by N4 to close at N1,387/$1, in contrast to Thursday’s value of N1,383/$1, and at the parallel market, it was unchanged at N1,395/$1.
Interbank FX activity among financial institutions has fluctuated amid a sharp slowdown in forex market interventions by the Central Bank of Nigeria (CBN), as it allows demand and supply to move the market.
Also, a stronger greenback has generally put significant pressure on emerging-market currencies.
Nigeria has accessed the first tranche of a proposed $5 billion derivatives financing arrangement with First Abu Dhabi Bank PJSC, the largest lender in the United Arab Emirates (UAE).
The $5 billion facility, approved by the National Assembly earlier this year, is part of the federal government’s plan to diversify external financing sources and reduce borrowing costs. Structured as a Total Return Swap with First Abu Dhabi Bank, proceeds are earmarked for refinancing debt and supporting infrastructure financing.
If the proceeds are brought into the country through the official FX market, the transaction will increase the currency reserves or Dollar liquidity.
At the cryptocurrency market, Solana (SOL) grew by 2.2 per cent to $71.92, Cardano (ADA) gained 1.1 per cent to trade at $0.1474, Ripple (XRP) also appreciated by 1.1 per cent to $1.05, Dogecoin (DOGE) expanded by 0.9 per cent to $0.0755, and Ethereum (ETH) improved by 0.4 per cent to $1,578.84.
On the flip side, TRON (TRX) slid 0.6 per cent to $0.3203, Binance Coin (BNB) slumped by 0.3 per cent to $564.33, and Bitcoin fell by 0.2 per cent to $60,219.37, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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