Economy
US Stocks Open Lower on Threat Of New Tariffs
By investors Hub
The major U.S. index futures are currently pointing to a lower opening on Friday, with stocks likely to come under pressure after ending the previous session modestly higher.
Trade concerns are likely to weigh on the markets once again after President Donald Trump revealed plans to use tariffs to compel Mexico to make efforts to stop flow of illegal immigrants across the country and into the U.S.
?On June 10th, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP,? Trump announced in a post on Twitter
He added, ?The Tariff will gradually increase until the Illegal Immigration problem is remedied, at which time the Tariffs will be removed.?
Trump revealed in a subsequent White House statement the tariffs will be raised to 10 percent on July 1st if the crisis persists, with tariffs eventually rising as high as 25 percent by October 1st.
The president argued the sustained imposition of tariffs will produce a massive return of jobs back to U.S., describing the move as an effort to ?firmly and forcefully? stand up for America?s interests.
?We have confidence that Mexico can and will act swiftly to help the United States stop this long-term, dangerous, and deeply unfair problem,? Trump said.
?The United States has been very good to Mexico for many years,? he added. ?We are now asking that Mexico immediately do its fair share to stop the use of its territory as a conduit for illegal immigration into our country.?
The threat of new tariffs on Mexican imports comes amid the escalating trade dispute between the U.S. and China, which has recently weighed on stocks and raised concerns about the global economic outlook.
After failing to sustain an early move to the upside, stocks fluctuated over the course of the trading session on Thursday. The major averages spent a good part of the day bouncing back and forth across the unchanged line.
Eventually, the major averages closed in positive territory but well off their best levels of the day. The Dow rose 43.47 points or 0.2 percent to 25,169.88, the Nasdaq climbed 20.41 points or 0.3 percent to 7,567.72 and the S&P 500 edged up 5.84 points or 0.2 percent to 2,788.86.
The early strength on Wall Street partly reflected bargain hunting following recent weakness, with the Dow bouncing off its lowest closing level in well over three months.
An early rebound by treasury yields also contributed to the upward move, as a recent decline by yields has led to concerns about the outlook for the economy and the possibility of a recession.
Buying interest waned shortly after the start of trading, however, as traders seemed reluctant to get back into the markets due to lingering concerns about the U.S.-China trade dispute.
Amid a continued escalation of the rhetoric, Chinese Vice Foreign Minister Zhang Hanhui accused the U.S. of “economic terrorism” by raising tariffs on Chinese goods.
“We oppose a trade war but are not afraid of a trade war,” Zhang said. “This kind of deliberately provoking trade disputes is naked economic terrorism, economic homicide, economic bullying.”
A report from Bloomberg News indicating China has put purchases of U.S. soybeans on hold has added to concerns about a trade war.
Treasuries also turned higher over the course of the trading session, contributing to a notable downturn by yields.
On the U.S. economic front, the Labor Department released a report showing a modest uptick in first-time claims for U.S. unemployment benefits in the week ended May 25th.
The report said initial jobless claims edged up to 215,000, an increase of 3,000 from the previous week’s revised level of 212,000.
A separate report from the Commerce Department showed U.S. economic growth in the first quarter accelerated by slightly less than initially estimated.
The Commerce Department said real gross domestic product surged up by 3.1 percent in the first quarter, reflecting a slight downward from revision from the previously reported 3.2 percent jump.
The downwardly revised increase in GDP, which matched economist estimates, still represented a notable acceleration from the 2.2 percent growth seen in the fourth quarter of 2018.
Meanwhile, the National Association of Realtors released a report showing pending home sales unexpectedly pulled back in the month of April.
NAR said its pending home sales index tumbled by 1.5 percent to 104.3 in April after surging up by 3.9 percent to an upwardly revised 105.9 in March.
The pullback came as a surprise to economists, who had expected pending home sales to climb by 0.9 percent compared to the 3.8 percent jump originally reported for the previous month.
Most of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.
Energy stocks showed a significant move to the downside, however, with a steep drop by the price of crude oil weighing on the sector.
Reflecting the weakness in the energy sector, the NYSE Arca Natural Gas Index tumbled by 2 percent, the Philadelphia Oil Service Index slumped by 1.7 and the NYSE Arca Oil Index fell by 1.3 percent.
Banking stocks also came under pressure over the course of the trading session, dragging the KBW Bank Index down by 1.3 percent.
On the other hand, gold stocks moved higher along with the price of the precious metal, with the NYSE Arca Gold Bugs Index jumping by 1.8 percent.
By Modupe Gbadeyanka
The federal government, the 36 states of the federation and the 774 local government areas have received N1.727 trillion from the Federal Accounts Allocation Committee (FAAC) for December 2024.
The funds were disbursed to the three tiers of government from the revenue generated by the nation in November 2024.
At the December meeting of FAAC held in Abuja, it was stated that the amount distributed comprised distributable statutory revenue of N455.354 billion, distributable Value Added Tax (VAT) revenue of N585.700 billion, Electronic Money Transfer Levy (EMTL) revenue of N15.046 billion and Exchange Difference revenue of N671.392 billion.
According to a statement signed on Friday by the Director of Press and Public Relations for FAAC, Mr Bawa Mokwa, the money generated last month was about N3.143 trillion, with N103.307 billion used for cost of collection and N1.312 trillion for transfers, interventions and refunds.
It was disclosed that gross statutory revenue of N1.827 trillion was received compared with the N1.336 trillion recorded a month earlier.
The statement said gross revenue of N628.972 billion was available from VAT versus N668.291 billion in the preceding month.
The organisation stated that last month, oil and gas royalty and CET levies recorded significant increases, while excise duty, VAT, import duty, Petroleum Profit Tax (PPT), Companies Income Tax (CIT) and EMTL decreased considerably.
As for the sharing, FAAC disclosed that from the N1.727 trillion, the central government got N581.856 billion, the states received N549.792 billion, the councils took N402.553 billion, while the benefiting states got N193.291 billion as 13 per cent derivation revenue.
From the N585.700 billion VAT earnings, the national government got N87.855 billion, the states received N292.850 billion and the local councils were given N204.995 billion.
Also, from the N455.354 billion distributable statutory revenue, the federal government was given N175.690 billion, the states got N89.113 billion, the local governments had N68.702 billion, and the benefiting states received N121.849 billion as 13 per cent derivation revenue.
In addition, from the N15.046 billion EMTL revenue, FAAC shared N2.257 billion to the federal government, disbursed N7.523 billion to the states and transferred N5.266 billion to the local councils.
Further, from the N671.392 billion Exchange Difference earnings, it gave central government N316.054 billion, the states N160.306 billion, the local government areas N123.590 billion, and the oil-producing states N71.442 billion as 13 per cent derivation revenue.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.65 per cent gain on Friday, December 13, boosted by three equities admitted on the trading platform.
On the last trading session of the week, Okitipupa Plc appreciated by N2.70 to settle at N29.74 per share versus Thursday’s closing price of N27.04 per share, FrieslandCampina Wamco Nigeria Plc added N2.49 to end the session at N42.85 per unit compared with the previous day’s N40.36 per unit, and Afriland Properties Plc gained 50 Kobo to close at N16.30 per share, in contrast to the preceding session’s N15.80 per share.
Consequently, the market capitalisation added N6.89 billion to settle at N1.062 trillion compared with the preceding day’s N1.055 trillion and the NASD Unlisted Security Index (NSI) gained 19.66 points to wrap the session at 3,032.16 points compared with 3,012.50 points recorded in the previous session.
Yesterday, the volume of securities traded by investors increased by 171.6 per cent to 1.2 million units from the 447,905 units recorded a day earlier, but the value of shares traded by the market participants declined by 19.3 per cent to N2.4 million from the N3.02 million achieved a day earlier, and the number of deals went down by 14.3 per cent to 18 deals from 21 deals.
At the close of business, Geo-Fluids Plc was the most active stock by volume on a year-to-date basis with a turnover of 1.7 billion units worth N3.9 billion, followed by Okitipupa Plc with the sale of 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.3 million units sold for N5.3 million.
In the same vein, Aradel Holdings Plc remained the most active stock by value on a year-to-date basis with the sale of 108.7 million units for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with a turnover of 297.3 million units worth N5.3 billion.
By Adedapo Adesanya
The Naira appreciated further against the United States Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N1.50 or 0.09 per cent to close at N1,533.00/$1 on Friday, December 13 versus the N1,534.50/$1 it was transacted on Thursday.
The local currency has continued to benefit from the Electronic Foreign Exchange Matching System (EFEMS) introduced by the Central Bank of Nigeria (CBN) this month.
The implementation of the forex system comes with diverse implications for all segments of the financial markets that deal with FX, including the rebound in the value of the Naira across markets.
The system instantly reflects data on all FX transactions conducted in the interbank market and approved by the CBN.
Market analysts say the publication of real-time prices and buy-sell orders data from this system has lent support to the Naira in the official market and tackled speculation.
In the official market yesterday, the domestic currency improved its value against the Pound Sterling by N12.58 to wrap the session at N1,942.19/£1 compared with the previous day’s N1,954.77/£1 and against the Euro, it gained N2.44 to close at N1,612.85/€1 versus Thursday’s closing price of N1,610.41/€1.
At the black market, the Nigerian Naira appreciated against the greenback on Friday by N30 to sell for N1,650/$1 compared with the preceding session’s value of N1,680/$1.
Meanwhile, the cryptocurrency market was largely positive as investors banked on recent signals, including fresh support from US President-elect, Mr Donald Trump, as well as interest rate cuts by the European Central Bank (ECB).
Ripple (XRP) added 7.3 per cent to sell at $2.49, Binance Coin (BNB) rose by 3.5 per cent to $728.28, Cardano (ADA) expanded by 2.4 per cent to trade at $1.11, Litecoin (LTC) increased by 2.3 per cent to $122.56, Bitcoin (BTC) gained 1.9 per cent to settle at $101,766.17, Dogecoin (DOGE) jumped by 1.2 per cent to $0.4064, Solana (SOL) soared by 0.7 per cent to $226.15 and Ethereum (ETH) advanced by 0.6 per cent to $3,925.35, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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