Economy

US Stocks Open Sharply Lower After Fed Slashes Rates

Published

6 years ago

16/03/2020

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.

Economy

Food Concepts Return NASD OTC Exchange to Danger Zone

Published

1 hour ago

05/12/2025

Adedapo Adesanya

By Adedapo Adesanya

Food Concepts Plc neutralized the gains recorded by three securities, returning the NASD Over-the-Counter (OTC) Securities Exchange into the negative territory with a 0.27 per cent loss on Thursday, December 4.

Yesterday, the share price of the parent company of Chicken Republic and PieXpress declined by 34 Kobo to sell at N3.15 per unit compared with the previous day’s N3.49 per unit.

This shrank the market capitalisation of the OTC bourse by N5.72 billion to N2.136 billion from N2.142 trillion and weakened the NASD Unlisted Security Index (NSI) by 9.57 points to 3,571.53 points from 3,581.10 points.

Business Post reports that Central Securities Clearing System (CSCS) Plc went down by 50 Kobo to N38.50 per share from N38.00 per share, FrieslandCampina Wamco Nigeria Plc gained 29 Kobo to sell at N55.79 per unit versus N55.50 per unit, and Geo-Fluids Plc added 5 Kobo to close at N4.60 per share compared with Wednesday’s closing price of N4.55 per share.

Trading data indicated that the volume of securities recorded at the session surged by 6,885.3 per cent to 4.3 million units from the 61,570 units posted a day earlier, the value of securities increased by 10,301.7 per cent to N947.2 million from N3.3 million, and the number of deals went up by 146.7 per cent to 37 deals from the 15 deals achieved in the previous trading session.

At the close of business, Infrastructure Credit Guarantee Company (InfraCredit) Plc was the most traded stock by value on a year-to-date basis with the sale of 5.8 billion units for N16.4 billion, trailed by Okitipupa Plc with 170.4 million units worth N8.0 billion, and Air Liquide Plc with 507.5 million units valued at N4.2 billion.

InfraCredit Plc also finished the session as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units traded for N524.9 million.

Economy

Investors Gain N97bn from Local Equity Market

Published

1 hour ago

05/12/2025

Dipo Olowookere

By Dipo Olowookere

The upward trend witnessed at the Nigerian Exchange (NGX) Limited in recent sessions continued on Thursday as it further improved by 0.10 per cent.

This was despite investor sentiment turning bearish after the local equity market ended with 23 price gainers and 28 price gainers, indicating a negative market breadth index.

UAC Nigeria gained 10.00 per cent to finish at N88.00, Morison Industries appreciated by 9.94 per cent to N3.54, Ecobank rose by 8.53 per cent to N36.90, and Coronation Insurance grew by 8.47 per cent to N2.56.

On the flip side, Ellah Lakes depreciated by 10.00 per cent to N13.14, Eunisell Nigeria also shed 10.00 per cent to finish at N72.90, Transcorp Hotels slipped by 9.95 per cent to N157.50, Omatek shrank by 9.23 per cent to N1.18, and Guinea Insurance dipped by 8.46 per cent to N1.19.

Yesterday, the All-Share Index (ASI) went up by 152.28 points to 145,476.15 points from 145,323.87 points and the market capitalisation chalked up N97 billion to finish at N92.726 trillion compared with the previous day’s N92.629 trillion.

Customs Street was bubbling with activities on Thursday, though the trading volume and value slightly went down, according to data.

A total of 1.9 billion stocks worth N19.2 billion exchanged hands in 23,369 deals during the session versus the N2.3 billion valued at N21.0 billion traded in 21,513 deals a day earlier.

This showed that the number of deals increased by 8.63 per cent, the volume of transactions depleted by 17.39 per cent, and the value of trades decreased by 8.57 per cent.

For another trading day, eTranzact led the activity chart with 1.6 billion units sold for N6.4 billion, Fidelity Bank traded 31.0 million units worth N589.3 million, GTCO exchanged 28.3 million units valued at N2.5 billion, Zenith Bank transacted 27.1 million units for N1.6 billion, and Ecobank traded 21.9 million units worth N744.3 million.

Economy

Naira Loses 18 Kobo Against Dollar at Official Market, N5 at Black Market

Published

2 hours ago

05/12/2025

Adedapo Adesanya

By Adedapo Adesanya

The Naira marginally depreciated against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, December 4 amid renewed forex pressure associated with December.

At the official market yesterday, the Nigerian currency lost 0.01 per cent or 18 Kobo against the Dollar to close at N1,447.83/$1 compared with the previous day’s N1,447.65/$1.

It was not a different scenario with the local currency in the same market segment against the Pound Sterling as it further shed N15.43 to sell for N1,930.97/£1 versus Wednesday’s closing price of N1,925.08/£1 and declined against the Euro by 20 Kobo to finish at N1,688.74/€1 compared with the preceding session’s N1,688.54/€1.

Similarly, the Nigerian Naira lost N5 against the greenback in the black market to quote at N1,465/$1 compared with the previous day’s value of N1,460/$1 but closed flat against the Dollar at the GTBank FX counter at N1,453/$1.

Fluctuations in trading range is expected to continue during the festive season as traders expect the Nigerian currency to be stable, supported by intervention s by to the Central Bank of Nigeria (CBN)in the face of steady dollar demand.

Support is also expected in coming weeks as seasonal activities, particularly the stylised “Detty December” festivities, will see inflows that will give the Naira a boost after it depreciated mildly last month, according to a new report.

“As the festive Detty December season intensifies, inbound travel, tourism spending, and diaspora inflows are expected to provide moderate support for FX liquidity,” analysts at the research unit of FMDA said in its latest monthly report for November.

Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450 next week, buoyed by improved FX interventions by the apex bank.

Meanwhile, the crypto market was down as the US Federal Reserve’s preferred inflation gauge, core PCE, likely rose in September—moving in the wrong direction. However, volatility indices show no signs of major turbulence.

If the actual figure matches estimates, it would mark 55 straight months of inflation above the US central bank’s 2 per cent target. The sticky inflation would strengthen the hawkish policymakers, who are in favour of slower rate cuts.

Ripple (XRP) depreciated by 4.5 per cent to $2.08, Solana (SOL) went down by 3.8 per cent to $138.11, Litecoin (LTC) shrank by 3.1 per cent to $83.23, Dogecoin (DOGE) slid by 2.5 per cent to $0.1463, Cardano (ADA) declined by 2.1 per cent to $0.4368, Bitcoin (BTC) fell by 0.9 per cent to $91,975.45, Binance Coin (BNB) crumbled by 0.9 per cent to $899.41, and Ethereum (ETH) dropped by 0.7 per cent to $3,156.44, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 apiece.