Economy
Wall Street Opens Higher Amid Unimpressive Jobs Data
By Investors Hub
The major U.S. index futures are currently pointing to a higher opening on Friday, with stocks likely to extend the strong upward move seen over the two previous sessions.
The futures remained positive even though a closely watched Labor Department report showing employment in the U.S. increased by less than expected in the month of August.
The report said non-farm payroll employment rose by 130,000 jobs in August after climbing by a downwardly revised 159,000 jobs in July. Economists had expected employment to increase by about 158,000 jobs.
Despite the weaker than expected jobs data, the markets may continue to benefit from optimism about next month?s U.S.-China trade talks.
Following the significant rebound seen on Wednesday, stocks showed another strong move to the upside during trading on Thursday. With the continued advance, the major averages ended the session at their best closing levels in over a month.
The major averages ended the day off their highs of the session but still firmly in positive territory. The Dow surged up 372.68 points or 1.4 percent to 26,728.15, the Nasdaq spiked 139.95 points or 1.8 percent to 8,116.83 and the S&P 500 jumped 38.22 points or 1.3 percent to 2,976.00.
The rally on Wall Street partly reflected a positive reaction to news that the U.S. and China plan to hold high level trade talks in early October.
A statement from China’s Commerce Ministry said both sides agreed to the new round of talks during a phone call between Chinese Vice Premier and chief trade negotiator Liu He and U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.
“Both sides agreed they should work together and take practical actions to create favorable conditions for the negotiations,” China’s Commerce Ministry said, according to a CNBC translation.
A spokesperson for the U.S. Trade Representative’s office confirmed the phone call and said the U.S. and China agreed to hold meetings “in the coming weeks.”
U.S. and Chinese officials will purportedly hold deputy-level talks later this month in preparation for the meeting in October.
A report from payroll processor ADP showing stronger than expected private sector job growth in August also generated buying interest.
The report said private sector employment surged up by 195,000 jobs in August after climbing by a downwardly revised 142,000 jobs in July.
Economists had expected employment to increase by about 149,000 jobs compared to the addition of 156,000 jobs originally reported for the previous month.
“Businesses are holding firm on their payrolls despite the slowing economy,” said Mark Zandi, chief economist of Moody’s Analytics. “Hiring has moderated, but layoffs remain low. As long as this continues recession will remain at bay.”
On Friday, the Labor Department is scheduled to release its more closely watched monthly jobs report, which includes both public and private sector jobs.
Employment is expected to increase by 158,000 jobs in August after climbing by 164,000 jobs in July, while the unemployment rate is expected to hold at 3.7 percent.
Shortly after the start of trading, the Institute for Supply Management released a separate report showing a notable acceleration in the pace of growth in U.S. service sector activity in the month of August.
The ISM said its non-manufacturing index climbed to 56.4 in August after falling to 53.7 in July, with a reading above 50 indicating growth in service sector activity. Economists had expected the index to inch up to 54.0.
The bigger than expected increase by the non-manufacturing index came after it dropped to its lowest level since August of 2016 in the previous month.
Oil service stocks turned in some of the market’s best performances on the day, driving the Philadelphia Oil Service Index up by 4.1 percent to its best closing level in nearly a month.
The rally by oil service stocks came even though the price of crude oil pulled back near the unchanged after moving sharply higher early in the session.
Substantial strength was also visible among semiconductor stocks, as reflected by the 3.1 percent jump by the Philadelphia Semiconductor Index.
Financial, transportation, computer hardware and steel stocks also saw considerable strength on the day, reflecting broad-based buying interest.
Meanwhile, gold stocks were among the few groups to buck the uptrend, with a steep drop by the price of the precious metal weighing on the sector.
By Adedapo Adesanya
The Organisation of the Petroleum Exporting Countries (OPEC) has once again trimmed its 2024 and 2025 oil demand growth forecasts.
The bloc made this in its latest monthly oil market report for December 2024.
The 2024 world oil demand growth forecast is now put at 1.61 million barrels per day from the previous 1.82 million barrels per day.
For 2025, OPEC says the world oil demand growth forecast is now at 1.45 million barrels per day, which is 900,000 barrels per day lower than the 1.54 million barrels per day earlier quoted.
On the changes, the group said that the downgrade for this year owes to more bearish data received in the third quarter of 2024 while the projections for next year relate to the potential impact that will arise from US tariffs.
The oil cartel had kept the 2024 outlook unchanged until August, a view it had first taken in July 2023.
OPEC and its wider group of allies known as OPEC+ earlier this month delayed its plan to start raising output until April 2025 against a backdrop of falling prices.
Eight OPEC+ member countries – Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman – decided to extend additional crude oil production cuts adopted in April 2023 and November 2023, due to weak demand and booming production outside the group.
In April 2023, these OPEC+ countries decided to reduce their oil production by over 1.65 million barrels per day as of May 2023 until the end of 2023. These production cuts were later extended to the end of 2024 and will now be extended until the end of December 2026.
In addition, in November 2023, these producers had agreed to voluntary output cuts totalling about 2.2 million barrels per day for the first quarter of 2024, in order to support prices and stabilise the market.
These additional production cuts were extended to the end of 2024 and will now be extended to the end of March 2025; they will then be gradually phased out on a monthly basis until the end of September 2026.
Members have made a series of deep output cuts since late 2022.
They are currently cutting output by a total of 5.86 million barrels per day, or about 5.7 per cent of global demand. Russia also announced plans to reduce its production by an extra 471,000 barrels per day in June 2024.
By Aduragbemi Omiyale
A minority equity stake in Chappal Energies Mauritius Limited has been acquired by a Nigerian energy firm, Aradel Holdings Plc.
This deal came a few days after Chappal Energies purchased a 53.85 per cent equity stake in Equinor Nigeria Energy Company Limited (ENEC).
Chappal Energies went into the deal with Equinor to take part in the oil and gas lease OML 128, including the unitised 20.21 per cent stake in the Agbami oil field, operated by Chevron.
Since production started in 2008, the Agbami field has produced more than one billion barrels of oil, creating value for Nigerian society and various stakeholders.
As part of the deal, Chappal will assume the operatorship of OML 129, which includes several significant prospects and undeveloped discoveries (Nnwa, Bilah and Sehki).
The Nnwa discovery is part of the giant Nnwa-Doro field, a major gas resource with significant potential to deliver value for Nigeria.
In a separate transaction, on July 17, 2024, Chappal and Total Energies sealed an SPA for the acquisition by Chappal of 10 per cent of the SPDC JV.
The relevant parties to this transaction are working towards closing out this transaction and Ministerial Approval and NNPC consent to accede to the Joint Operating Agreement have been obtained.
“This acquisition is in line with diversifying our asset base, deepening our gas competencies and gaining access to offshore basins using low-risk approaches.
“We recognise the strategic role of gas in Nigeria’s energy future and are happy to expand our equity holding in this critical resource.
“We are committed to the cause of developing the significant value inherent in the assets, which will be extremely beneficial to the country.
“Aradel hopes to bring its proven execution competencies to bear in supporting Chappal’s development of these opportunities,” the chief executive of Aradel Holdings, Mr Adegbite Falade, stated.
By Adedapo Adesanya
Afriland Properties Plc helped the NASD Over-the-Counter (OTC) Securities Exchange record a 0.04 per cent gain on Tuesday, December 10 as the share price of the property investment rose by 34 Kobo to N16.94 per unit from the preceding day’s N16.60 per unit.
As a result of this, the market capitalisation of the bourse went up by N380 million to remain relatively unchanged at N1.056 trillion like the previous trading day.
But the NASD Unlisted Security Index (NSI) closed higher at 3,014.36 points after it recorded an addition of 1.09 points to Monday’s closing value of 3,013.27 points.
The NASD OTC securities exchange recorded a price loser and it was Geo-Fluids Plc, which went down by 2 Kobo to close at N3.93 per share, in contrast to the preceding day’s N3.95 per share.
During the trading session, the volume of securities bought and sold by investors increased by 95.8 per cent to 2.4 million units from the 1.2 million securities traded in the preceding session.
However, the value of shares traded yesterday slumped by 3.7 per cent to N4.9 million from the N5.07 million recorded a day earlier, as the number of deals surged by 27.3 per cent to 14 deals from 11 deals.
Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units worth N5.3 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.
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