Economy
Wall Street Opens Higher on Trade Talks Optimism
By Investors Hub
The major U.S. index futures are currently pointing to a modestly higher opening on Friday after the major averages closed mixed for two straight sessions.
The markets may benefit from optimism that stimulus packages by central banks around the world will help bolster slowing economic growth.
Traders also remain hopeful about an eventual end to the U.S.-China trade war, with deputy U.S. and Chinese trade negotiators resuming talks for the first time in almost two months on Thursday.
The deputy-level talks this week are expected to help pave the way for more productive high-level U.S.-China trade talks next month.
On the trade front, a report from Politico says the Trump administration is exempting hundreds of Chinese products from tariffs imposed last year.
The report, confirmed by CNBC, says the list of exemptions includes products such as Christmas tree lights, plastic straws, and pet supplies.
Politico said the exemptions are less about placating China than they are an effort to provide relief to some U.S. companies who say they have been harmed by the tariffs.
Meanwhile, on a quiet day on the U.S. economic front, St. Louis Federal Reserve President James Bullard released a statement explaining his preference for cutting interest rates by 50 basis points at the Fed meeting earlier this week.
Bullard cited signs that U.S. economic growth is expected to slow in the near horizon as well as continued indications of low inflation.
?In light of these developments, I believe that lowering the target range for the federal funds rate by 50 basis points at this time would provide insurance against further declines in expected inflation and a slowing economy subject to elevated downside risks,? Bullard wrote.
He added, ?It is prudent risk management, in my view, to cut the policy rate aggressively now and then later increase it should the downside risks not materialize.?
Stocks saw moderate strength throughout morning trading on Thursday before giving back ground over the course of the afternoon. The major averages pulled back well off their highs before eventually closing mixed for the second straight day.
While the Dow dipped 52.29 points or 0.2 percent to 27,094.79, the Nasdaq inched up 5.49 points or 0.1 percent to 8,182.88 and the S&P 500 crept up 0.06 points or less than a tenth of a percent to 3,006.79.
The lackluster close on Wall Street came amid continued uncertainty about the outlook for interest rates following the Federal Reserve’s monetary policy announcement on Wednesday.
The Fed lowered interest by 25 basis points as expected but indicated officials are mixed about whether the central bank should cut rates again before the end of the year.
While seven participants expect another rate cut before the end of year, five expect rates to remain unchanged and another five expect rates to be raised back to 2 to 2-1/4 percent.
The central bank reiterated that it will “act as appropriate” to sustain the economic expansion, with a strong labor market and inflation near its symmetric 2 percent objective.
CME Group’s FedWatch Tool currently indicates a mixed outlook for rate cuts at the Fed’s next meetings in October and December.
On the U.S. economic front, the Labor Department released a report showing a modest rebound in initial jobless claims in the week ended September 14th.
The report said initial jobless claims inched up to 208,000, an increase of 2,000 from the previous week’s revised level of 206,000. Economists had expected jobless claims to climb to 213,000.
A separate report from the Philadelphia Federal Reserve showed a modest slowdown in the pace of growth in regional manufacturing activity in the month of September.
The Philly Fed said its diffusion index for current general activity fell to 12.0 in September from 16.8 in August, although a positive reading still indicates growth in regional manufacturing activity. The index had been expected to drop to 11.0.
Looking ahead, the survey’s future general activity index moderated but continues to suggest growth over the next six months.
The National Association of Realtors also released a report showing an unexpected jump in existing home sales in the month of August.
NAR said existing home sales surged up by 1.3 percent to an annual rate of 5.49 million in August after spiking by 2.5 percent to a rate of 5.42 million in July.
The continued increase came as a surprise to economists, who had expected existing home sales to pull back by about 0.4 percent.
“Buyers are finding it hard to resist the current rates,” said NAR chief economist Lawrence Yun. “The desire to take advantage of these promising conditions is leading more buyers to the market.”
Tobacco stocks moved sharply lower over the course of the trading session, dragging the NYSE Arca Tobacco Index down by 2.7 percent. The index tumbled to its lowest closing level in over seven months.
Significant weakness was also visible among steel stocks, as reflected by the 1.6 percent drop by the NYSE Arca Steel Index.
U.S. Steel (X) plunged by 11.1 percent after lowering its third quarter guidance due to a drop in steel prices and deteriorating market conditions in Europe.
Energy stocks also came under pressure as the price of crude oil pulled back off its early highs, while gold stocks showed a significant move to the upside.
The NYSE Arca Gold Bugs Index surged up by 2.3 percent even though the price of gold for December delivery moved lower on the day.
Notable strength also remained visible among software stocks, with the Dow Jones U.S. Software Index climbing by 1.3 percent.
Microsoft (MSFT) posted a strong gain after raising its quarterly dividend by $0.05 to $0.51 per share and announcing plans to buy back up to $40 billion worth of stock.
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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