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 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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