Economy
US Stocks Open Lower on Trade Deal Skepticism
By Investors Hub
The major U.S. index futures are pointing to a lower opening on Tuesday, with stocks likely to give back ground following the rally seen in the previous session.
Profit taking may contribute to initial weakness on Wall Street, as traders cash in on the strong gains posted on Monday in reaction to the trade war truce reached by President Donald Trump and Chinese President Xi Jinping.
Uncertainty about whether the 90-day truce will give the U.S. and China enough time to reach a long-term trade agreement may inspire traders to cash in on yesterday?s strong upward move.
News that U.S. Trade Representative Robert Lighthizer, one of Trump?s more hawkish advisors on trade with China, has been tapped to lead the negotiations has added to the skepticism.
Trump has appeared optimistic about the potential for an agreement, claiming U.S. relations with China have taken a ?big lead forward? as a result of his meeting with XI.
?Very good things will happen,? Trump said in a post on Twitter. ?We are dealing from great strength, but China likewise has much to gain if and when a deal is completed. Level the field!?
?President Xi and I have a very strong and personal relationship,? he added. ?He and I are the only two people that can bring about massive and very positive change, on trade and far beyond, between our two great Nations.?
Overall trading activity may be somewhat subdued, however, with a lack of major U.S. economic data likely to keep some traders on the sidelines.
Tomorrow?s national day of mourning for former President George H.W. Bush may also limit trading activity, as the NYSE and the Nasdaq will be closed on the day and the release of most economic data has been postponed.
After moving sharply higher at the open, stocks gave back some ground but managed to remain firmly positive throughout the trading session on Monday. With the advance on the day, the major averages added to the substantial gains posted last week.
The major averages moved roughly sideways for much of the session before closing significantly higher. The Dow surged up 287.97 points or 1.1 percent to 25,826.43, the Nasdaq soared 110.98 points or 1.5 percent to 7,441.51 and the S&P 500 shot up 30.20 points or 1.1 percent to 2,790.37.
The initial jump on Wall Street reflected a positive reaction to the highly anticipated meeting between Trump and Xi over the weekend.
At the meeting, Trump and Xi agreed to a 90-day truce in the escalating trade war between the world’s two largest economies as they work to reach a long-term trade deal.
A White House statement said Trump agreed not to raise the tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent on January 1st as planned.
In return, China agreed to purchase a “not yet agreed upon, but very substantial, amount” of agricultural, energy, industrial, and other product from the U.S.
The White House said the U.S. and China will use the next 90 days to attempt to reach an agreement on issues such as forced technology transfer, intellectual property protection, and non-tariff barriers.
If the two countries are not able to reach an agreement by the end of the time period, the 10 percent tariffs on Chinese goods will be raised to 25 percent.
In remarks to reporters aboard Air Force One, Trump called the agreement with Xi an “incredible deal,” claiming it will have an “incredibly positive impact” on “every type of product.”
Trump also said China will be “opening up” and “getting rid of tariffs,” stating in a subsequent post on Twitter that China has agreed to reduce and remove tariffs on cars coming into the country from the U.S.
Paul Ashworth, Chief U.S. Economist at Capital Economics, noted Trump ripped up an earlier trade deal with China negotiated by Commerce Secretary Wilbur Ross.
“We suspect that since he negotiated this deal himself, Trump will be much more reluctant to torpedo it when his own personal reputation is on the line,” Ashworth said.
He added, “Nevertheless, his own administration includes plenty of China hawks who are pushing the protectionist agenda, so we suspect China will have to offer a little more than the minor concessions that South Korea, Mexico and Canada agreed to reach trade deals with the U.S.”
On the U.S. economic front, the Institute for Supply Management released a report showing an unexpected acceleration in the pace of growth in manufacturing activity in the month of November.
The ISM said its purchasing managers index climbed to 59.3 in November after falling to 57.7 in October, with a reading above 50 indicating growth in manufacturing activity. Economists had expected the index to edge down to 57.5.
Meanwhile, a separate report from the Commerce Department showed construction spending unexpectedly edged lower in October.
Energy stocks showed a substantial move to the upside on the day, benefiting from a sharp increase by the price of crude oil.
Reflecting the strength in the energy sector, the Philadelphia Oil Service Index spiked by 3.5 percent, while the NYSE Arca Natural Gas Index and the NYSE Arca Oil Index both surged up by 2.7 percent.
Considerable strength also emerged among computer hardware stocks, as reflected by the 3.4 percent rally by the NYSE Arca Computer Hardware Index.
Steel, semiconductor, gold, and retail stocks also saw significant strength on the day, reflecting broad based buying interest on Wall Street.
By Modupe Gbadeyanka
The United Nations has expressed its readiness to assist in attracting investors to Zamfara State, especially in the mining and agricultural sectors.
The Deputy Secretary General of the global body, Mrs Amina Mohammed, during a visit on Thursday, said the northern Nigerian state is now ready for business and that the UN was willing to be a genuine partner to the state.
“Investors want an enabling environment. Peace is what you need today for people to come. The Zamfara narrative focuses on conflict related to solid minerals, and this needs to change,” she was quoted as saying in a statement issued on Friday by the spokesperson for the Zamfara Governor, Mr Sulaiman Bala Idris.
The former Nigerian Minister further said, “What you show us today is first and foremost your passion for what you want us to do, and that is what investors want. They want to know what you want.
“I am happy today to be here in Zamfara, because I really want to show the world that we should pay attention to what is happening at the local level. Because this is where people are weakest, where governance is weakest, and where there are the fewest resources.
“When we visit, we give visibility to the effort that has been made and to the impact of what is happening elsewhere in the world on people who have nothing to do with what caused it in the first place.
“Zamfara State is accessible today. And it would be even more accessible because the road we travelled on is still under construction. When it is finished, it will revive the businesses and markets around it, and hopefully, by then, we will witness more peace.
“I see the mining, I see the potentials, I see the market and the demand, but I also see the leadership here who is willing to look at the institution, framework and partner to get the job done.
“There is a lot of hope and potential here. Everyone must play their role; this is not something the governor will do alone. The United Nations is willing to be a genuine partner to Zamfara State.”
On his part, Governor Dauda Lawal said Zamfara is at a turning point, with a population of 5.3 million, and the state’s economy is agriculture-driven, with 82 per cent of the population depending on agriculture.
“Zamfara’s Six-Point Rescue Agenda is a deliberate strategy to stabilise, rebuild, and transition the state toward inclusive and sustainable development,” he told his guest.
By Adedapo Adesanya
The federal government has inaugurated the Governing Board of the Nigeria Commodity Exchange (NCX) to strengthen commodity trading and accelerate Nigeria’s transition to a non-oil, export-driven economy.
The Minister of Industry, Trade and Investment, Mrs Jumoke Oduwole, who inaugurated the board on Thursday in Abuja, said it was part of efforts to modernise commodity markets and boost export competitiveness.
According to her, the initiative seeks to formalise commodity trade and unlock value in agriculture and solid minerals, supporting the government’s agenda on diversification, job creation and food security.
The minister described the development as a major step toward repositioning Nigeria in regional and global markets.
She noted that Nigeria’s vast resources and access to over 1.4 billion consumers under the African Continental Free Trade Area (AfCFTA) present significant export opportunities.
She emphasised the need to address poor traceability, informal trading systems and infrastructure gaps affecting commodity markets.
Mrs Oduwole said the reactivation of the exchange would strengthen transparency, standardise trading and improve price discovery.
She added that the NCX would attract investment into market infrastructure and help Nigerian commodities meet international export standards.
On his part, the Permanent Secretary of the ministry, Mr Chris Isokpunwu, described the inauguration as a landmark step in strengthening Nigeria’s commodity export ecosystem.
Mr Isokpunwu, represented by the Director of the Commodity Exchange Department of the ministry, Mr Obasi Edozie, urged the newly inaugurated board to discharge their duties with diligence and professionalism.
He assured the board of the ministry’s support toward achieving measurable economic outcomes.
Mr Abubakar, Chairman of the governing board, pledged the board’s commitment to repositioning the exchange as a globally competitive trading platform.
He listed priorities to include strengthening governance, upgrading warehouses and digital trading systems and building capacity for farmers and market operators.
He also emphasised the need to deepen partnerships with financial institutions and international commodity markets.
“The inauguration underscores the Federal Government’s commitment to repositioning the NCX to drive export growth, rural prosperity and sustainable economic development.”
**Revokes Trading Licences of LMB, Platinum Stockbrokers
By Aduragbemi Omiyale
A stockbroking company, Premium Capital and Stockbrokers Limited, has been fined N5 million for engaging in “unauthorised sale of its clients’ securities.”
A circular issued by the Nigerian Exchange (NGX) Regulation Limited disclosed that the trading licence of the organisation has also been revoked.
In the notice signed by the Head of Market Regulation for NGX RegCo, Chinedu Akamaka, Premium Capital violated Rule 11.9 of the Rulebook of The Exchange, 2015 (Dealing Members’ Rules), which focuses on the Prohibition of Unauthorised Sale of Securities.
Business Post reports that Premium Capital was not the only stockbroker that had its trading licence withdrawn, as it also affected others.
The licence of LMB Stockbrokers Limited was revoked by NGX RegCo for prolonged inactivity, which falls contrary to Rule 6.4: Revocation of Inactive Dealing Members’ Licences, Rulebook of The Exchange, 2015 (Dealing Members’ Rules), as amended.
The same also affected Platinum Stockbrokers Limited, which has not witnessed activity on the floor of the NGX Limited for a while.
Similarly, the authorised dealing clerkship of Mr Bernard Oluwole Ilori, was taken back with immediate effect in alignment with an earlier determination by the Securities and Exchange Commission’s (SEC) Administrative Proceedings Committee (APC), which arose from his involvement in regulatory infractions connected to Mutual Alliance Investment and Securities Limited and resulted in his 10-year ban from the Nigerian capital market since March 25, 2021.
Investors have been “strongly advised not to engage in any activity with the firms” whose trading licenses have been revoked.
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