Economy
US Stocks Open Higher Tuesday
By Investors Hub
The major U.S. index futures are pointing to a higher opening on Tuesday, with stocks likely to see further upside after moving modestly higher over the course of the previous session.
The markets may benefit from recent upward momentum, which has helped propel stocks to record highs amid unshakable optimism about a potential U.S.-China trade deal.
Boeing (BA) may help lead the Dow higher after the aerospace giant received orders for 50 of its embattled 737 Max jets at the Dubai Air Show.
On the other hand, shares of Home Depot (HD) may come under pressure after the home improvement retailer reported weaker than expected third quarter revenues and lowered its full-year sales guidance.
After moving mostly lower early in the session, stocks recovered over the course of the trading day on Monday. The major averages climbed well off their lows of the session and managed to end the day modestly higher.
The major averages crept up to new record closing highs. The Dow edged up 31.33 points or 0.1 percent to 28,036.22, the Nasdaq inched up 9.11 points or 0.1 percent to 8,549.94 and the S&P 500 ticked up 1.57 points or 0.1 percent to 3,122.03.
Stocks initially moved to the downside after a tweet from CNBC’s Beijing Bureau Chief Eunice Yoon suggested Chinese officials have grown pessimistic about the chances for a trade deal.
“Mood in Beijing about #trade deal is pessimistic, government source tells me. #China troubled after Trump said no tariff rollback. (China thought both had agreed in principle.)” Yoon tweeted.
She added, “Strategy now to talk but wait due to impeachment, US election. Also prioritize China economic support.”
Yoon’s tweet offset earlier positive sentiment in reaction to weekend report from Chinese state media indicating the U.S. and China had “constructive discussions” regarding a phase one trade deal in a high-level phone call.
U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin reportedly talked with Chinese Vice Premier Liu He about the core issues for an agreement.
However, traders have recently shown a predilection for taking upbeat reports about the trade talks at face value while shrugging off the negative news.
The prevailing optimism about an eventual trade deal has led to a steady upward trend on Wall Street for the past month and a half.
On the U.S. economic front, the National Association of Home Builders released a report showing homebuilder confidence edged slightly lower in the month of November.
The report said the NAHB/Wells Fargo Housing Market Index slipped to 70 in November after climbing to 71 in October. Economists had expected the index to come in unchanged.
The modest decrease came after the housing market index rose for four straight months to reach its highest level since hitting a matching reading in February of 2018.
Meanwhile, Federal Reserve Chairman Jerome Powell met with President Donald Trump and Treasury Secretary Mnuchin at the White House on Monday.
Powell traveled to the White House at Trump’s invitation to discuss the economy, growth, employment and inflation, the Fed said in a statement.
The Fed said Powell’s comments were consistent with his remarks at his congressional hearings last week, when he indicated the central bank would leave interest rates on hold for the foreseeable future unless there is a material change in the economic outlook.
Powell did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming information that bears on the outlook for the economy, the Fed said.
The Fed chief also told Trump that the Federal Open Market Committee will make its monetary policy decisions based solely on careful, objective and non-political analysis.
In a subsequent post on Twitter, the president described the sit-down with Powell as a “very good & cordial meeting.”
Despite the recovery by the broader markets, energy stocks showed a substantial move to the downside, with decreases in associated commodities prices weighing on the sector.
With natural gas for December delivery plummeting $0.122 to $2.566 per million BTUs, the NYSE Arca Natural Gas Index plunged by 3.8 percent, while the Philadelphia Oil Service Index tumbled by 2.3 percent as crude oil slumped.
On the other hand, gold stocks showed a strong move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 2 percent. The strength among gold stocks came amid an increase by the price of the precious metal.
By Dipo Olowookere
The hope of Nigerians getting premium motor spirit (PMS), commonly known as petrol, below N800 per litre, at least for now when the price of crude oil is less than $80 per barrel and the official exchange rate of the Naira to the Dollar is above N1,600/$1 at the currency market, may have been dashed.
This is because the Chief Financial Officer (CFO) of the Nigerian National Petroleum Company (NNPC) Limited, Mr Adedapo Segun, has said the price of the commodity from unrefined crude oil is about N800 per litre.
He made this revelation while speaking on Channels Television’s Sunrise Daily on Wednesday, monitored by Business Post.
According to him, this reality might make it impossible for the company to sell PMS to Nigerians at that price because the cost of getting the final product must be added to arrive at the actual price of petrol.
“This pricing conversation is an interesting one. What are the components of the price? I just told you that the crude [oil] unrefined is N800 per litre, a barrel of crude is about $80 (actually at $72 per barrel as of Wednesday), give or take, you have about 159 litres [of PMS) in a barrel of crude, let’s approximate it to 160 litres, that gives you 50 cents per litre [and] at N1,600 per Dollar, that’s N800 per litre.
“So, the crude itself, unrefined, is N800 per litre. Then you talk about the refiner’s margin, he has to make some money and has costs like operating the plant and other overhead costs. When you are done with these costs, you move to the wholesalers.
“[The product] is transported either by vessel or trucks. The transporter also has his margin as well as the retailer. There are also costs for the regulators and other statutory fees to be paid.
“When you look at all of these costs, what will the Port Harcourt refinery do differently than what Dangote Refinery for example is doing today?
“The only difference would be that it is closer to the people of Port Harcourt and reduces the cost of transporting things like PMS from Dangote Refinery in Lagos to Port Harcourt. That is where the savings would come, but that is very marginal. The cost of transportation is very marginal in the cost-build-up for PMS,” he said.
However, he noted that what the refineries will do to Nigeria is to create competition based on market conditions.
At the moment, the price of PMS at NNPC retail stations is N1,025 per litre in Lagos, while independent marketers sell between N1,040 per litre and N1,060 per litre.
Last week, Dangote Refinery announced a slash in its ex-depot price to N970 per litre from N990 per litre.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed the midweek session with a 0.88 per cent depreciation after the duo of FrieslandCampina Wamco Nigeria and UBN Property Plc suffered losses.
The market capitalisation lost N9.31 billion to close at N1.053 trillion compared with the previous session’s N1.063 trillion and the NASD Unlisted Security Index (NSI) recorded a slide of 26.54 points to end the day at 3,006.38 points as against 3,032.92 points it recorded at the previous session.
The volume of securities traded at the bourse witnessed a surge as investors exchanged 1.0 million units, which is 208.4 per cent higher than the 327,425 units transacted by market participants at the last session.
However, the day’s trading data showed that the total amount of stocks traded at the midweek session slid by 86.9 per cent to N2.1 million from the N15.7 million quoted on Tuesday.
These transactions were completed in three deals compared with the nine deals carried out a day earlier, representing a decline of 66.7 per cent.
FrieslandCampina Wamco Nigeria shed N4.39 yesterday to trade at N39.51 per unit versus Tuesday’s closing price of N43.90 per unit and UBN Property Plc recorded a 13 Kobo depreciation to sell at N1.67 per share, in contrast to the preceding session’s N1.80 per share.
At the close of business, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units worth N3.9 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.3 million units sold for 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, Okitipupa Plc came next with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc was in third with 297.3 million units sold for N5.3 billion.
By Adedapo Adesanya
The Naira weakened against the Dollar by 0.08 per cent or N1.39 to N1,660.83/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Wednesday, November 27, from the preceding day’s value of N1,659.44/$1.
However, the value of the domestic currency remained stable against the Pound Sterling and the Euro in the official market yesterday at N2,116.44/£1 and N1,788.98/€1.
It was observed that the FX turnover for the trading session went down by 20.9 per cent or $88.91 million to $337.07 million from the $425.98 million recorded a day earlier, according to data obtained from FMDQ Securities Exchange.
As for the black market, the exchange rate of the Nigerian Naira to the US Dollar remained unchanged at the midweek session at N1,750/$1, according to data harvested by Business Post.
Speaking at the end of the 298th Monetary Policy Committee (MPC) meeting, the Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, said the apex bank remains committed to its core mandate of price and exchange rate stability in anchoring inflation.
“Members thus focused on the optimal policy choice to address the uptrend in price development, stabilize the exchange rate and anchor inflation expectations appropriately,” Mr Cardoso said.
In the cryptocurrency market, prices were largely positive for benchmarked tokens ahead of Thanksgiving weekend in the US which has historically recorded sudden price dumps.
Rising activity and a bump in revenue, fees, new wallets and on-chain volumes have also indicated further support for digital assets, which has gained support from an expected friendly environment in the US next year.
Ripple (XRP) grew by 7.4 per cent to $1.47, Binance Coin (BNB) appreciated by 5.3 per cent to $650.61, Ethereum (ETH) rose by 4.9 per cent to $3,571.110, Cardano (ADA) expanded by 4.4 per cent to $1.00, Solana (SOL) jumped by 3.4 per cent to $237.39, Dogecoin (DOGE) increased by 3.1 per cent to $0.4035, Bitcoin (BTC) went up by 2.6 per cent to $95,288.95 and Litecoin (LTC) gained 2.4 per cent to settle at $64.89, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.
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