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 Dipo Olowookere
About 0.04 per cent was recovered on Friday from the loss recorded by the Nigerian Exchange (NGX) the previous due to profit-taking.
Yesterday, investors were in the market with renewed vigour, mopping up stocks trading at relatively cheaper prices.
According to data, the insurance counter gained 0.41 per cent, the banking sector appreciated by 0.38 per cent, and the consumer goods index grew by 0.14 per cent.
The gains achieved by these three sectors were enough to lift Customs Street at the close of business despite the 0.26 per cent decline printed by the industrial goods segment and the 0.14 per cent loss suffered by the energy industry. The commodity counter was flat during the session.
A total of 43 equities gained weight on the last trading day of this week, while 26 equities shed weight, indicating a positive market breadth index and strong investor sentiment.
Red Star Express increased its share price by 10.00 per cent to N13.20, NCR Nigeria grew by 9.97 per cent to N128.55, SCOA Nigeria inflated by 9.96 per cent to N14.90, Omatek appreciated by 9.94 per cent to N1.77, and Deap Capital expanded by 9.85 per cent to N4.46.
On the flip side, McNichols decreased by 8.81 per cent to N6.00, Legend Internet crumbled by 7.56 per cent to N5.50, Cornerstone Insurance crashed by 6.48 per cent to N6.35, C&I Leasing contracted by 6.29 per cent to N8.20, and Austin Laz slipped by 5.78 per cent to N3.75.
Yesterday, 539.9 million shares valued at N16.7 billion were transacted in 48,023 deals versus the 1.0 billion shares worth N31.6 billion executed in 51,227 deals in the preceding day, implying a shrink in the trading volume, value, and number of deals by 46.01 per cent, 47.15 per cent, and 6.26 per cent apiece.
Zenith Bank was the most active for the day with 54.6 million stocks sold for N3.8 billion, Jaiz Bank traded 41.5 million units worth N359.4 million, Secure Electronic Technology transacted 37.7 million units valued at N39.2 million, Access Holdings exchanged 30.5 million units for N699.2 million, and Lasaco Assurance transacted 27.2 million units worth N68.3 million.
When the market closed for the day, the All-Share Index (ASI) went up by 72.21 points to 166,129.50 points from 166,057.29 points and the market capitalisation gained N31 billion to N106.354 trillion from N106.323 trillion.
By Adedapo Adesanya
It was a positive ending for the Naira this week after it further appreciated against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, January 16 by N1.33 or 0.09 per cent to sell for N1,417.95/$1 compared with the previous day’s N1,419.28/$1.
The domestic currency also gained N2.41 against the Euro in the official market to close at N1,647.51/€1 versus the preceding session’s closing price of N1,649.92/€1, however, it suffered a N7.97 loss against the Pound Sterling in the same market window to trade at N1,901.32/£1, in contrast to Thursday’s closing price of N1,893.35/£1.
In the same vein, the Nigerian Naira depleted against the Dollar at the GTBank FX counter by N2 to quote at N1,427/$1 compared with the previous day’s N1,425/$1, but strengthened against the greenback at the black market yesterday by N5 to settle at N1,485/$1 versus the N1,490/$1 it was exchanged a day earlier.
Improved supply conditions helped keep the market within range as exporters’ and importers’ inflows in addition to non-bank corporate supply enhanced liquidity as the Central Bank of Nigeria (CBN) made no visible intervention.
Stronger external inflows from foreign portfolio investors (FPIs) and improving current account dynamics, continue to align with structural support in the wider economy.
Nigeria has seen projections of a stronger economic or gross domestic product (GDP) growth and lower inflation in 2026, with these forecasts citing improved macroeconomic fundamentals and reform impacts.
As for the cryptocurrency market, it was mixed following selloff in precious metals and lower US stocks appeared to be denting crypto sentiment.
Gold and silver, both of which also enjoyed big rallies earlier this week, tumbled 1.2 per cent and 5 per cent, respectively while key US stock indexes — the Nasdaq, S&P 500 and Dow Jones Industrial Average — all reversed from early gains to modest losses in Friday trade.
Dogecoin (DOGE) shrank by 2.2 per cent to $0.1370, Ripple (XRP) slipped by 0.8 per cent to $2.05, Ethereum (ETH) went down by 0.7 per cent to $3,228.56, and Bitcoin (BTC) slumped by 0.6 per cent to $95,086.80.
Conversely, Litecoin (LTC) appreciated by 3.2 per cent to $74.48, Solana (SOL) rose by 0.4 per cent to $143.70, Cardano (ADA) jumped by 0.2 per cent to $0.3942, and Binance Coin (BNB) increased by 0.1 per cent to $935.88, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Adedapo Adesanya
Oil prices settled higher amid lingering worries about a possible US military strike against Iran, a decision that may still occur over the weekend.
Brent crude settled at $64.13 a barrel after going up by 37 cents or 0.58 per cent and the US West Texas Intermediate (WTI) crude finished at $59.44 a barrel after it gained 25 cents or 0.42 per cent.
The US Navy’s aircraft carrier USS Abraham Lincoln was expected to arrive in the Persian Gulf next week after operating in the South China Sea.
Market analysts noted that it doesn’t seem likely anything will happen soon. However, the weekends have become the perfect time for actions so as not offset the markets.
The market had risen after protests flared up in Iran and US President Donald Trump signalled the potential for military strikes, but lost over 4 per cent on Thursday as the American president said Iran’s crackdown on the protesters was easing, allaying concerns of possible military action that could disrupt oil supplies.
Iran produces approximately 3.2 million barrels per day, accounting for roughly 4 per cent of global crude production, so it was not a coincidence that markets rallied sharply through Tuesday and Wednesday as President Trump canceled meetings with Iranian officials and posted that “help is on its way” to Iranian protesters, raising fears of potential US military strikes that sent prices surging toward multi-month highs.
Weighing against those fears are potential supply increases from Venezuela.
The Trump administration is exploring plans to swap heavy Venezuelan crude for US medium sour barrels that can actually go straight into Strategic Petroleum Reserve (SPR) caverns, since not all all oil belongs in the reserve.
According to Reuters, the Department of Energy is considering moving Venezuelan heavy crude into commercial storage at the Louisiana Offshore Oil Port, while US producers deliver medium sour crude into the SPR in exchange.
Analysts expect higher supply this year, potentially creating a ceiling for the geopolitical risk premium on prices.
Some investors covered short positions ahead of the three-day Martin Luther King holiday weekend in the US.
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