Economy
US Stocks Risk Another Lacklustre Performance
By Investors Hub
The major U.S. index futures are pointing to a roughly flat opening on Thursday, with stocks poised to extend the lacklustre performance seen in the previous session. Continued uncertainty about the outlook for President Donald Trump’s policy agenda may lead to choppy trading on Wall Street.
Speeches by several Federal Reserve officials are likely to attract some attention, as traders look for clues about the outlook for interest rates.
Following the strength seen on Tuesday, stocks turned in a lacklustre performance during trading on Wednesday. The major averages eventually finished the day on opposite sides of the unchanged line.
While the Dow edged down 42.18 points or 0.2 percent to 20,659.32, the Nasdaq rose 22.41 points or 0.4 percent to 5,897.55 and the S&P 500 inched up 2.56 points or 0.1 percent to 2,361.13.
The choppy trading on Wall Street came as traders seemed reluctant to make any significant moves amid continued uncertainty about President Donald Trump’s policy agenda following the failure of the Republican health care bill.
Developments in the U.K. were also in focus after the British government sent a notification letter to European Council President Donald Tusk formally beginning the country’s exit from the European Union.
The move to trigger the Article 50 process to leave the EU comes after Britons voted last June in favour of the so-called Brexit.
“This is an historic moment, from which there can be no turning back. Britain is leaving the European Union,” said British Prime Minister Theresa May. “We are going to make our own decisions and our own laws. We are going to take control of the things that matter most to us.”
“And we are going to take this opportunity to build a stronger, fairer Britain — a country that our children and grandchildren are proud to call home,” she added. “That is our ambition and our opportunity, and that is what this government is determined to do.”
On the U.S. economic front, the National Association of Realtors released a report showing that pending home sales rebounded by much more than expected in the month of February.
NAR said its pending home sales index spiked by 5.5 percent to 112.3 in February from 106.4 in January. Economists had expected pending home sales to jump by 2.4 percent.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
With the bigger than expected increase, the index surged up to its highest level since reaching 113.6 last April and is at its second highest level since May of 2006.
Most of the major sectors ended the day showing only modest moves on the day, contributing to the lacklustre close by the broader markets.
Energy stocks saw considerable strength, however, with an increase by the price of crude oil generating buying interest. The increase by the price of crude oil came following the release of a report from the Energy Information Administration showing a smaller than expected weekly increase in crude oil inventories.
Reflecting the strength in the energy sector, the NYSE Arca Natural Gas Index surged up by 2.4 percent, the Philadelphia Oil Service Index jumped by 2.1 percent, and the NYSE Arca Oil & Gas Index advanced by 1.3 percent.
After initially showing a lack of direction, gold stocks also moved higher over the course of the trading session. The NYSE Arca Gold Bugs Index climbed by 1.2 percent. The gains by gold stocks came despite a decrease by the price of the precious metal.
Computer hardware, biotechnology and retail stocks also saw notable strength on the day, while weakness was visible among airline stocks.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.16 per cent decline on Tuesday, January 21, extending its loss this week to two.
This further depleted the market capitalisation of the alternative stock exchange by N1.65 billion at the close of transactions to N1.071 trillion from the N1.073 trillion it closed in the preceding session.
In the same vein, the NASD Unlisted Security Index (NSI) slid by 4.79 points to wrap the session at 3,100.33 points compared with 3,105.12 points recorded in the previous session.
The bourse ended with two price losers yesterday led by Geo Fluids Plc, which gave up 32 Kobo to trade at N4.38 per share versus Monday’s closing price of N4.70 per share and FrieslandCampina Wamco Nigeria Plc, which depreciated by 15 Kobo to close at N39.50 per unit compared with the previous day’s N39.65 per unit.
On the second trading day of the week, the number of deal carried out slightly went up by 8.3 per cent to 13 deals from the 12 deals executed at the previous trading session.
Also, the value of transactions increased by 97.2 per cent to N4.5 million from the N2.5 million recorded a day earlier, while the volume of securities traded in the session declined by 71.6 per cent to 183,780 units from the 767,610 units recorded on Monday.
FrieslandCampina Wamco Nigeria Plc remained the most traded equity by value (year-to-date) with 4.1 million units worth N162.9 million, followed by Geo-Fluids Plc with 9.1 million units valued at N44.0 million, and 11 Plc with 55,358 sold for N14.5 million.
Also, Industrial and General Insurance (IGI) Plc closed the day as the most active stock by volume (year-to-date) with 25.3 million units worth N5.9 million, trailed by Geo-Fluids Plc with 9.1 million units sold for N44.0 million, and FrieslandCampina Wamco Nigeria Plc with 4.1 million units valued at N162.9 million.
By Adedapo Adesanya
Pressure further mounted on the Nigerian Naira in the different segments of the foreign exchange market on Tuesday, making its value to shrink against the United States Dollar at the close of business.
In the Nigerian Autonomous Foreign Exchange Market (NAFEM), the domestic currency crashed against its American counterpart during the session by 0.18 per cent or N2.73 to settle at N1,552.78/$1, in contrast to Monday’s closing price of N1,550.05/1.
But against the Pound Sterling and the Euro, the local currency traded flat in the official market yesterday at N1,906.98/£1 and N1,613.48/€1, respectively.
As for the black market segment, the Naira weakened against the Dollar on Tuesday by N5 to sell for N1,670/$1 compared with the preceding day’s value of N1,665/$1.
Meanwhile, the cryptocurrency market heaved a sigh of relief during the session as President Donald Trump created a crypto task force dedicated to “developing a comprehensive and clear regulatory framework for crypto assets.”
The task force will be led by Commissioner Hester Peirce, a long-time advocate for the crypto industry, and will work closely with the crypto industry to develop regulations. This is after Mr Gary Gensler, an opponent of crypto, officially stepped down as chairman of the US Securities and Exchange Commission (SEC) after Mr Trump’s term started.
The task force will also work with Congress, providing “technical assistance” as it crafts crypto regulations.
Solana (SOL) recorded a 9.2 per cent growth to sell at $257.09, Dogecoin (DOGE) rose by 7.6 per cent to $0.36789, Ripple (XRP) added 4.0 per cent to finish at $3.18, and Bitcoin (BTC) increased by 3.7 per cent to $105,515.03.
Further, Binance Coin (BNB) appreciated by 2.8 per cent to close at $699.01, Cardano jumped by 2.1 per cent to trade at $0.9972, Ethereum (ETH) soared by 2.0 per cent to settle at $3,308.21, and Litecoin (LTC) went up by 1.5 per cent to end at $116.72, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
By Adedapo Adesanya
The price of the Brent crude oil grade went below the $80 mark on Tuesday after it shed 86 cents or 1.1 per cent to trade at $79.29 per barrel after the US President, Mr Donald Trump, signaled the possibility of his country boosting its oil production.
This move raised concerns of higher US output in a market widely expected to be oversupplied this year, with the US West Texas Intermediate (WTI) crude futures falling by $1.99 or 2.6 per cent during the session to $75.89 per barrel.
On his first day in office, the US President signed an executive order to unleash America’s energy by easing the barriers to oil and gas extraction and production and revoking a series of climate orders by former President Joe Biden.
As pledged in the campaign, the executive order follows the declaration of a national energy emergency.
The declaration includes measures to expedite energy infrastructure delivery, and emergency approvals by agencies “to facilitate the identification, leasing, siting, production, transportation, refining, and generation of domestic energy resources, including, but not limited to, on Federal lands.”
This will likely confirm expectations that the oil market will be oversupplied this year after weak economic activity and energy transition efforts weighed heavily on demand in top-consuming nations the US and China.
President Trump also said he was considering imposing 25 per cent tariffs on imports from Canada and Mexico from February 1, rather than on his first day in office as promised.
The delay helped ease concerns of an immediate tightening of the market among US refiners, many of which are geared to process the type of crude oil supplied by these countries.
The US Energy Information Administration (EIA) reiterated on Tuesday its expectations for oil prices to decline both this year and next.
On its part, the Organisation of the Petroleum Exporting Countries (OPEC) projects robust demand growth in the world both this year and next.
In 2025, OPEC says demand is set to grow by 1.4 million barrels per day leaving its projection unchanged from the December report.
However, losses were also limited after the US president said his administration would “probably” stop buying oil from Venezuela. The U.S. is the second-biggest buyer of Venezuelan oil after China.
Also weighing on prices on Tuesday was the potential end to the shipping disruption in the Red Sea.
Yemen’s Houthis said on Monday they will limit their attacks on commercial vessels to Israel-linked ships provided the Gaza ceasefire is fully implemented.
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