Economy
Wall Street Opens Higher Monday on Trade Deal Optimism
By Investors Hub
The major U.S. index futures are currently pointing to a higher opening on Monday, suggesting stocks will see further upside following the rally last Friday.
The markets may benefit from optimism about a U.S.-China trade agreement, with Commerce Secretary Wilbur Ross expressing optimism phase one of a trade deal could be signed this month.
?We?re in good shape, we?re making good progress, and there?s no natural reason why it couldn?t be,? Ross said in an interview with Bloomberg on Sunday.
Ross called the phase one agreement ?particularly complicated? and acknowledged it is ?always possible? the signing of the deal could ?slip a little bit.?
In the interview, Ross also said licenses for U.S. firms to sell components to China?s Huawei Technologies would be coming ?very shortly.?
President Donald Trump has also continued to express optimism about a trade deal, recently suggesting phase one of an agreement could be signed somewhere in the U.S. as soon as this month.
Stocks moved sharply higher over the course of the trading session on Friday as traders reacted to much better than expected U.S. jobs data. With the strong upward moves, the Nasdaq and the S&P 500 reached new record closing highs.
The major averages saw further upside going into the close, ending the session at their best levels of the day. The Dow surged up 301.13 points or 1.1 percent to 27,347.36, the Nasdaq soared 94.04 points or 1.1 percent to 8,386.40 and the S&P 500 jumped 29.35 points or 1 percent to 3,066.91.
For the week, the Dow shot up by 1.4 percent, while the Nasdaq and the S&P 500 skyrocketed by 1.7 percent and 1.5 percent, respectively.
The rally on Wall Street came as the much stronger than expected U.S. jobs data washed away concerns about the economic outlook.
The Labor Department said non-farm payroll employment climbed by 128,000 jobs in October compared to economist estimates for an increase of about 89,000 jobs.
The report also showed substantial upward revisions to job growth in September and August, with revised data showing employment jumped by 180,000 jobs and 219,000 jobs, respectively.
With the upward revisions, employment gains in September and August combined were 95,000 more than previously reported.
“The upshot is that the three-month average gain is now 175,000, which is easily enough to outpace population growth,” said Michael Pearce, Senior U.S. Economist at Capital Economics.
He added, “That is in stark contrast with much of the recent survey evidence, which had pointed to a sharp slowdown in employment growth.”
Despite the stronger than expected job growth, the report said the unemployment rate inched up to 3.6 percent in October from 3.5 percent in September. The uptick matched economist estimates.
The unemployment rate crept up from the nearly 50-year low hit in the previous month as a 325-person jump in the size of the labor force more than offset a 241,000-person increase in the household survey measure of employment.
Renewed optimism about a U.S.-China trade deal added to the positive sentiment, as a report from China’s Xinhua News Agency said negotiators have “reached consensus on principles.”
Meanwhile, traders largely shrugged off a separate report from the Institute for Supply Management showing a continued contraction in U.S. manufacturing activity in the month of October.
The ISM said its purchasing managers index crept up 48.3 in October from 47.8 in September, although a reading below 50 still indicates a contraction in manufacturing activity. Economists had expected the index to rise to 48.9.
In the previous month, the index fell to its lowest level since hitting 46.3 in June of 2009, the last month of the Great Recession.
“Comments from the panel reflect an improvement from the prior month, but sentiment remains more cautious than optimistic,” said Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee. “Global trade remains the most significant cross-industry issue.”
Energy stocks turned in some of the market’s best performances on the day, benefiting for a sharp increase by the price of crude oil.
Reflecting the strength in the energy sector, the Philadelphia Oil Service Index soared by 5.4 percent, the NYSE Arca Natural Gas Index surged up by 3 percent and the NYSE Arca Oil Index jumped by 2.3 percent.
Substantial strength was also visible among steel stocks, as reflected by the 4.3 percent spike by the NYSE Arca Steel Index. The index ended the session at its best closing level in well over a month.
U.S. Steel (X) helped lead the sector higher after reporting a narrower than expected third quarter loss on revenues that exceeded analyst estimates.
Biotechnology, transportation and financial stocks also saw significant strength on the day, while gold, networking and telecom stocks bucked the uptrend.
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By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange rose by 0.40 per cent on Monday, July 13, buoyed by buying interest in 11 Plc, Central Securities Clearing System (CSCS) Plc and UBN Property Plc, which offset the profit-taking in Food Concepts Plc, the parent company of Chicken Republic.
11 Plc gained N20.69 to end at N227.64 per share compared with last Friday’s price of N206.95 per share, CSCS Plc grew by N1.83 to N91.48 per unit from N89.65 per unit, and UBN Property Plc added 1 Kobo to sell at N1.81 per share versus N1.80 per share.
On the flip side, Food Concepts Plc depreciated by 24 Kobo to close at N2.45 per unit, in contrast to the preceding session’s N2.69 per unit.
As a result, the market capitalisation increased by N9.2 billion to N2.587 trillion from N2.578 trillion, and the NASD Security Index (NSI) improved by 15.33 points to 4,311.67 points from 4,296.34 points.
Yesterday, the volume of securities traded by investors surged by 615.9 per cent to 9.1 million units from the previous 1.3 million units, and the value of securities rose by 997.1 per cent to N320.4 million from the preceding session’s N29.2 million, while the number of deals decreased by 12.5 per cent to 28 deals from last Friday’s 32 deals.
At the close of trades, Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 73.9 million units exchanged for N5.2 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units sold for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Adedapo Adesanya
The Naira maintained stability against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Monday, July 13, at N1,379.65/$1.
However, it appreciated against the Pound Sterling in the official market by N2.44 to exchange at N1,848.18/£1 compared with the previous rate of N1,850.62/£1, and lost 73 Kobo against the Euro to sell at N1,576.39/€1 versus last Friday’s N1,575.66/€1.
At the GTBank fore counter, the Naira declined by N2 to settle at N1,388/$1, in contrast to the previous session’s rate of N1,386/$1, and at the black market, it traded flat at N1,400/$1.
Market analysts expect the Naira to trade within a relatively stable range, supported by sustained FX inflows and a continued market intervention by the Central Bank of Nigeria (CBN), although persistent underlying FX demand is likely to keep depreciation pressures elevated.
According to Monday’s trading data, interbank FX turnover surged by 21.14 per cent to $86.136 million from $71.044 million at the previous trading session on Friday.
However, interbank deal counts declined to 85 from 87 on Monday, reflecting the absence of pressure from US Dollar payments against local units. Last week, total foreign exchange inflows amounted to $0.97 billion, according to a Coronation Merchant Bank research report.
Analysts reported that foreign portfolio investors (FPIs) remained the largest source of inflows, contributing 30.29% or $0.29 billion, closely followed by Exporters and Importers at 30.14 per cent.
Non-bank corporates accounted for 26.49 per cent or $0.26 billion, while the CBN contributed 6.93 per cent or $0.07 billion. Other sources made up the remaining 5.4 per cent of total inflows.
In the cryptocurrency market, major coins came under pressure following heightened expectations for a Federal Reserve interest-rate increase as soon as July, just ahead of key US inflation data and congressional testimony from Chairman Kevin Warsh came into focus.
Bitcoin (BTC) fell by 0.2 per cent to $62,627.03, Solana (SOL) dipped by 1.5 per cent to $75.18, TRON (TRX) depreciated by 0.2 per cent to $0.3248, Ripple (XRP) slumped by 0.6 per cent to $1.06, and Cardano (ADA) lost 0.6 per cent to close at $0.1589.
On the flip side, Ethereum (ETH) appreciated by 0.5 per cent to $1,784.26, Dogecoin (DOGE) grew by 0.2 per cent to $0.073, and Binance Coin (BNB) jumped by 0.2 per cent to $569.23, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.
