Economy
US Stocks Open Sharply Lower After Fed Slashes Rates
By Investors Hub
The major U.S. index futures are currently pointing to a sharply lower open on Monday, with stocks likely to give back ground following the rally seen going into the close of trading last Friday.
Traders may look to cash in on the previous session’s gains amid escalating concerns about the economic impact of the coronavirus pandemic.
Central banks around the world, including the Federal Reserve, are taking steps to provide economic stimulus to combat the effects of the virus, but the moves may only serve to exacerbate concerns about the impact of the outbreak.
On Sunday, the Fed took the unusual step of slashing interest rates by 100 basis points just days ahead of its scheduled monetary policy meeting this week.
The Fed lowered the target range for the federal funds rate to zero to 0.25 percent from 1 to 1.25 percent, noting the coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the U.S.
The central bank said it expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.
In addition to cutting rates, the Fed also announced a new quantitative easing program, revealing plans to increase its holdings of Treasury and mortgage-backed securities by at least $700 billion.
“The Fed’s decision to slash interest rates to near-zero won’t stop the economy falling into a recession, but the package of liquidity-boosting measures will help prevent credit markets seizing up, reducing the risks a deeper downturn,” said Michael Pearce, Senior U.S. Economist at Capital Economics.
He added, “We expect the Fed to do whatever it takes to keep markets functioning smoothly, and to announce further QE & forward guidance to support demand should the crisis worsen significantly.”
The drastic moves by the Fed, which come ahead of the two-day monetary policy meeting set to begin on Tuesday, have raised some concerns that central banks around the world will run out of ammunition to deal with a deepening crisis.
A day after the worst drop by the Dow in over thirty years, stocks showed a substantial move back to the upside during trading on Friday. The major averages fluctuated over the course of the session before experiencing a late-day rally.
The major averages spiked going into the close of trading, ending the session at their best levels of the day. The Dow soared 1,985.00 points or 9.4 percent to 23,185.62, the Nasdaq skyrocketed 673.00 points or 9.3 percent to 7,874.80 and the S&P 500 surged up 230.38 points or 9.3 percent to 2,711.02.
Despite the rebound on the day, the major averages moved sharply lower for the week. The Dow plummeted by 10.4 percent, while the Nasdaq and the S&P 500 plunged by 8.2 percent and 8.8 percent, respectively.
The late-day spike on Wall Street came after President Donald Trump declared the coronavirus outbreak a national emergency.
The declaration by Trump would free up as much as $50 billion in additional funding to combat the outbreak and allow officials to waive certain regulations to accelerate testing and care for coronavirus patients.
Trump said during a press conference in the White House Rose Garden that he expects the U.S. to have 1.4 million coronavirus test kits available within a week and a total of 5 million kits within the next month.
The president said he is also working with private sector companies to develop “drive thru” testing facilities across the country.
However, Trump said he does not want everybody running out and taking the test, saying only people with certain symptoms should be tested.
Adding to the positive sentiment, a coronavirus test developed by Swiss drug giant Roche has been granted emergency use authorization by the FDA.
The FDA said this is the first commercially distributed diagnostic test to receive emergency authorization during the coronavirus outbreak.
Roche said it is committed to delivering as many tests as possible and is going to the limits of its production capacity.
The emergency authorization of the Roche test comes amid rising concerns about the relatively low levels of coronavirus testing in the U.S.
In U.S. economic news, a report released by the University of Michigan showed a relatively modest deterioration in consumer sentiment in the month of March in light of the rampant fear over the coronavirus outbreak and the subsequent sell-off on Wall Street.
The report showed the consumer sentiment index slid to 95.9 in March after rising to 101.0 in February, although the index still came in above economist estimates for a reading of 95.0.
“Importantly, the initial response to the pandemic has not generated the type of economic panic among consumers that was present in the runup to the Great Recession,” said Surveys of Consumers chief economist Richard Curtin.
He added, “Nonetheless, the data suggest that additional declines in confidence are still likely to occur as the spread of the virus continues to accelerate.”
Banking stocks saw considerable strength amid a continued increase in treasury yields, with the KBW Bank Index soaring by 14.8 percent.
Substantial strength also emerged among energy stocks in late-day trading after Trump pledged to purchase oil at the currently severely reduced prices to fill the U.S. strategic petroleum reserve.
Software stocks also moved sharply higher over the course of the session, driving the Dow Jones U.S. Software Index up by 12.7 percent. The index ended the previous session at a nine-month closing low.
Oracle (ORCL) and Adobe (ADBE) posted standout gains within the software sector after reporting better than expected quarterly earnings.
Steel, semiconductor, brokerage, and transportation stocks also moved sharply higher, while gold stocks bucked the uptrend amid a steep drop by the price of the precious metal.
By Adedapo Adesanya
Brent crude dropped below $70 on Monday, specifically losing $1.08 or 1.5 per cent to trade at $69.28 per barrel, as fears that the United States’ tariffs on Canada, Mexico and China would slow economies around the world and slash energy demand.
Also, the US West Texas Intermediate (WTI) futures settled at $66.03 a barrel after shedding $1.01 or 1.5 per cent during the session as the wider market saw plunges after the US President, Mr Donald Trump’s protectionist policies sent jitters across major economies and the oil market wasn’t spared.
The American president has imposed and then delayed tariffs on the country’s biggest oil suppliers,Canada and Mexico, while also raising duties on Chinese goods.
China and Canada have responded with tariffs of their own but Mexico has not followed in the path of two countries, waiting to study the direction of the development before making any move.
Over the weekend, US Commerce Secretary Howard Lutnick said President Trump would not let up pressure on tariffs on Mexico, Canada, and China.
Also, President Trump over the weekend declined to predict whether the US could face a recession as investors worried about a possible economic slowdown that could curtail oil demand.
On the supply front, President Trump is seeking to choke off Iranian oil exports as part of efforts to pressure the country to reduce in its nuclear programme.
Meanwhile, Iran’s Supreme Leader Ayatollah Ali Khamenei said on Saturday that his country will not be bullied into negotiations.
President Trump also said the US would intensify sanctions on Russia if it fails to reach a ceasefire deal with Ukraine.
This is as the country is looking ways to ease sanctions on Russia’s energy sector if it agrees to end its war with Ukraine.
Meanwhile, Russia’s Deputy Prime Minister Alexander Novak said the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) agreed to start increasing oil production from April.
He added that the alliance could reverse the decision afterwards if there are market imbalances in the future.
By Aduragbemi Omiyale
The N3.1 billion shares of Ellah Lakes Plc converted from debt to equity have been listed on the Nigerian Exchange (NGX) Limited.
The equities from the exercise were taken to the stock exchange for listing last Wednesday to increase the total issued and fully-paid shares of the organisation.
Business Post reports that the company used a total of 1,104,386,890 ordinary shares of 50 Kobo each at N2.8 per unit to pay up about N3.1 billion debt incurred by the firm.
The board of Ellah Lakes was given the authority to convert the company’s outstanding debt into equity at its Annual General Meeting (AGM) on December 5, 2024, in Lagos.
In a notice to investing public last week, the NGX said, “Trading licence holders are hereby notified that additional 1,104,386,890 ordinary shares of 50 Kobo each of Ellah Lakes Plc were on Wednesday, March 5, 2025, listed on the daily official list of Nigerian Exchange (NGX) Limited.
“The additional shares listed on NGX arose from Ellah Lakes Plc’s conversion of N3,092,283,294.81 debt to equity.
“With this listing of the additional 1,104,386,890 ordinary shares, the total issued and fully paid-up shares of Ellah Lakes Plc have now increased from 2,753,786,788 to 3,858,173,678 ordinary shares of 50 Kobo each.”
The conversion of the company’s debt to equity came after one of its largest shareholders, CBO Capital, offloaded about 81 million units of the organisation’s equities at the stock market recently.
By Adedapo Adesanya
Thailand’s Securities and Exchange Commission (SEC) has approved the use of Tether’s stablecoin, USDT, as a currency.
According to a statement on Monday, the approval enables USDT to be traded within the country, facilitating its listing on regulated exchanges and paving the way for USDT to be accepted for payments, which advances the region’s leadership in digital asset innovation.
The updated regulations aim to enhance flexibility in digital asset businesses and will take effect on March 16, 2025.
This comes after the Thailand regulator sought public feedback on these changes, which were finalized in February 2025 with widespread industry support.
“The regulator’s recognition of USDT as an approved cryptocurrency marks a pivotal moment in the evolution of digital assets in the region and represents a major step toward clarifying and enhancing Thailand’s regulatory framework.
“This will provide investors with greater flexibility and choice while fostering a more dynamic and resilient industry. By enabling the seamless integration of USDT, the decision supports the diversification and modernization of Thailand’s financial landscape,” the statement added.
Thailand is one of the friendliest jurisdictions for digital assets in recent years and ranks among the top 20 countries globally in terms of adoption.
USDT accounts for around 40 per cent of volumes.
Tether’s USDT with a market cap of $142 billion, is the world’s most widely used stablecoin, providing a trusted, efficient bridge between traditional fiat systems and digital economies.
Speaking on the development, Mr Paolo Ardoino, CEO of Tether, said it will continue to boost its services and offerings in more friendly markets.
“We highly value the Thai market and are continuously exploring ways to enhance our services and offerings. Our priority is to provide users in Thailand with a secure, transparent, and reliable stablecoin experience.
“We are committed to supporting the long-term success and adoption of stablecoins in Thailand and look forward to contributing to the growth of the country’s digital asset ecosystem by fostering a strong and sustainable stablecoin infrastructure.”
Thailand’s forward-thinking approach to digital asset regulation sets a global benchmark, and Tether is proud to see USDT play a pivotal role in driving economic progress and digital transformation in the region.
Tether added that this approval confirms its dedication to building bridges between traditional and decentralized economies while ensuring security, trust, and efficiency for users worldwide.
“Thailand’s forward-looking stance on stablecoins is reflected in its vibrant, Thai baht-backed digital asset market,” it added.
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