Economy
US Stocks Lack Direction Ahead of Monthly Jobs Report
By Investors Hub
The major U.S. index futures are pointing to a roughly flat opening on Thursday, with stocks likely to show a lack of direction in early trading.
The markets have recently benefited from optimistic reports regarding progress in U.S.-China trade talks, although traders may be waiting for more concrete developments.
Traders are likely to keep an eye on any news out of a meeting between President Donald Trump and Chinese Vice Premier Liu He later today.
The looming monthly jobs report is also likely to keep traders on the sidelines, with the Labor Department scheduled to release the March data on Friday.
A day ahead of the release of the more closely watched monthly data, the Labor Department released a report showing initial jobless claims slipped to their lowest level in nearly 50 years in the week ended March 30th.
After showing a strong move to the upside in morning trading on Wednesday, stocks gave back some ground in the afternoon but still closed mostly higher. The upward move lifted the Nasdaq and the S&P 500 to their best closing levels in about six months.
The major averages all closed in positive territory, although the tech-heavy Nasdaq outperformed its counterparts. While the Nasdaq advanced 46.86 points or 0.6 percent to 7,895.55, the Dow rose 39.00 points or 0.2 percent to 26,218.13 and the S&P 500 edged up 6.16 points or 0.2 percent to 2,873.40.
The higher close on Wall Street came amid optimism about the latest round of trade talks between U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He.
Ahead of the meetings, people briefed on the trade talks told the Financial Times top U.S. and Chinese officials have resolved most of the issues standing in the way of a deal to end their long-running trade dispute.
Officials are still haggling over how to implement and enforce the agreement, however, with Myron Brilliant, executive vice-president for international affairs at the U.S. Chamber of Commerce, telling reporters the last 10 percent is the “hardest part.”
The Financial Times said the two sides remain apart on two key issues: the fate of existing U.S. tariffs on Chinese goods and the terms of an enforcement mechanism demanded by Washington to ensure that China abides by the deal.
Buying interest was somewhat subdued, however, as traders were also digesting a report from payroll processor ADP showing much weaker than expected private sector job growth in the month of March.
ADP said private sector employment rose by 129,000 jobs in March after jumping by an upwardly revised 197,000 jobs in February.
Economists had expected employment to increase by 170,000 jobs compared to the addition of 183,000 jobs originally reported for the previous month.
“The job market is weakening, with employment gains slowing significantly across most industries and company sizes,” said Mark Zandi, chief economist of Moody’s Analytics.
“Businesses are hiring cautiously as the economy is struggling with fading fiscal stimulus, the trade uncertainty, and the lagged impact of Fed tightening,” he added. “If employment growth weakens much further, unemployment will begin to rise.”
On Friday, the Labor Department is scheduled to release its more closely watched monthly employment report, which includes both public and private sector jobs.
Employment is expected to jump by 180,000 jobs in March after inching up by just 20,000 jobs in February, while the unemployment rate is expected to hold at 3.8 percent.
A separate report from the Institute for Supply Management showed service sector growth in the U.S. cooled off in March after a significant acceleration in the previous month.
The ISM said its non-manufacturing index slid to 56.1 in March after jumping to 59.7 in February, although reading above 50 still indicates growth in the service sector.
Economists had expected the index to show a more modest pullback, with forecasts calling for the index to dip to 58.0.
Semiconductor stocks pulled back off their best levels of the day but still showed a substantial move to the upside. Reflecting the strength in the sector, the Philadelphia Semiconductor Index surged up by 2.3 percent to a record closing high.
Advanced Micro Devices (AMD) spiked by 8.5 percent after Nomura Instinet initiated coverage of the chip maker’s stock with a Buy rating.
Significant strength also remained visible among chemical stocks, as reflected by the 1.6 percent jump by the S&P Chemical Sector Index. The index ended the session at its best closing level in six months.
Computer hardware and networking stocks also saw considerable strength on the day, contributing to the advance by the tech-heavy Nasdaq.
On the other hand, tobacco and natural gas stocks fell sharply over the course of the session, dragging the NYSE Arca Tobacco Index and the NYSE Arca Natural Gas Index down by 2.7 percent and 2.1 percent, respectively.
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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