Economy

Wall Street Opens Higher on Upbeat Earnings News

Published

6 years ago

23/01/2019

By Investors Hub

The major U.S. index futures are pointing to a higher opening on Wednesday, with stocks likely to move back to the upside following the sell-off seen in the previous session.

The upward momentum on Wall Street comes as upbeat earnings news from several big-name companies has overshadowed concerns about the global economic outlook.

Consumer products giant Procter & Gamble (PG) is likely to see initial strength after reporting better than expected fiscal second quarter results.

Shares of United Technologies (UTX) are also moving notably higher in pre-market trading after the industrial conglomerate reported fourth quarter results that exceeded analyst estimates on both the top and bottom lines.

Tech giant IBM Corp. (IBM) is also likely to move to the upside after reporting fourth quarter results that beat estimates after the close of trading on Tuesday.

The earnings news has offset concerns about U.S.-China trade talks raised by reports the U.S. rejected China’s offer to hold a preparatory meeting in Washington ahead of next week’s high-level trade talks.

Stocks moved sharply lower over the course of the trading session on Tuesday, partly offsetting the rally seen last week. With the sell-off on the day, the major averages pulled back after ending last Friday’s trading at their best closing levels in well over a month.

The major averages ended the day off their lows of the session but still firmly in negative territory. The Dow tumbled 301.87 points or 1.2 percent to 24,404.48, the Nasdaq plunged 136.87 points or 1.9 percent to 7,020.36 and the S&P 500 slumped 37.81 points or 1.4 percent to 2,632.90.

The pullback on Wall Street reflected concerns about the global economy after the International Monetary Fund said the global expansion is weakening at a rate that is somewhat faster than expected.

The IMF lowered its forecasts for global economic growth to 3.5 percent in 2019 and 3.6 percent in 2020, 0.2 and 0.1 percentage points below last October’s projections.

An escalation of trade tensions and a worsening of financial conditions are key sources of risk to the outlook, the IMF said.

The IMF also expressed concerns about a bigger than expected slowdown in Chinese growth, the Brexit cliffhanger, and the ongoing U.S. government shutdown.

In remarks at the World Economic Forum in Davos, Switzerland, on Monday, IMF Managing Director Christine Lagarde noted risks to the global economy are increasingly intertwined.

“Think of how higher tariffs and rising uncertainty over future trade policy fed into lower asset prices and higher market volatility,” Lagarde said. “This in turn contributed to tightening financial conditions, including for advanced economies, which is a major risk factor in a world of high debt burdens. “

“Does that mean that a global recession is around the corner? The answer is ‘no,'” she added. “But the risk of a sharper decline in global growth has certainly increased.”

Adding to the economic worries, the National Association of Realtors released a report showing a much steeper than expected drop in U.S. existing home sales in the month of December.

NAR said existing home sales plummeted by 6.4 percent to an annual rate of 4.99 million in December after jumping by 2.1 percent to a revised rate of 5.33 million in November.

Economists had expected existing home sales to slump by 1.3 percent to a rate of 5.25 million from the 5.32 million originally reported for the previous month.

With the much bigger than expected decrease, existing home sales tumbled to their lowest level since November of 2015.

Oil service stocks showed a substantial move to the downside on the day, with the Philadelphia Oil Service Index plunging by 3.8 percent after ending last Friday’s trading at its best closing level in over a month.

Halliburton (HAL) posted a steep loss after reporting fourth quarter earnings that exceeded estimates but disappointing North American revenues.

Significant weakness was also visible among semiconductor stocks, as reflected by the 2.9 percent slump by the Philadelphia Semiconductor Index.

Computer hardware, retail, tobacco, and biotechnology stocks also saw considerable weakness, while gold stocks were among the few groups to buck the downtrend.

Economy

UBN Property Triggers 0.22% Loss at NASD OTC Exchange

Published

2 hours ago

21/01/2025

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.22 per cent decline on Monday, January 20, with the market capitalisation shedding N2.35 billion to close at N1.073 trillion compared with the preceding session’s N1.075 trillion and the NASD Unlisted Security Index (NSI) going down by 6.79 points to wrap the session at 3,105.12 points compared with 3,111.91 points recorded in the previous session.

It was observed that the loss recorded on the first trading day of the week was triggered by UBN Property Plc, which crashed by 20 Kobo to trade at N2.00 per share versus last Friday’s N2.20 per share.

However, the share price of Industrial and General Insurance (IGI) Plc went up by 4 Kobo to 40 Kobo per unit from 36 Kobo per unit, it could not stop the bourse from going down at the close of transactions.

The activity chart showed that on Monday, the volume of securities traded by investors increased by 57.9 per cent to 767,610 units from the 486,215 units traded in the preceding session, while the value of shares traded yesterday slumped by 17.7 per cent to N2.3 million from the N2.8 million recorded in the preceding trading day, as the number of deals declined by 14.3 per cent to 12 deals from the 14 deals carried out in the previous trading day.

At the close of transactions, FrieslandCampina Wamco Nigeria Plc remained the most active stock by value on a year-to-date basis with the sale of 4.1 million units worth N162.9 million, followed by Geo-Fluids Plc with a turnover of 9.1 million units valued at N44.0 million, and 11 Plc with the sale of 55,358 for N14.5 million.

Also, Industrial and General Insurance (IGI) Plc closed the day as the most active stock by volume on a year-to-date basis with 25.3 million units sold for N5.9 million, Geo-Fluids Plc came next with 9.1 million units valued at N44.0 million, and FrieslandCampina Wamco Nigeria Plc with 4.1 million units worth N162.9 million.

Economy

Naira Weakens to N1,550/$1 at Official Market, Gains N5 at Black Market

Published

3 hours ago

21/01/2025

Adedapo Adesanya

By Adedapo Adesanya

The value of the Naira weakened against the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday, January 20 amid FX pressures associated with this period.

Most people who came into the country for Christmas and New Year holidays are already going back and are in need of forex, putting pressure on the local currency.

Also, the poor performance of the domestic currency could be attributed to end to the 42-day access granted by the Central Bank of Nigeria (CBN) to Bureaux de Change (BDC) operators to buy forex at official price.

According to data from the FMDQ Securities Exchange, the Nigerian Naira lost 0.16 per cent or N2.47 on the greeback yesterday to sell at N1,550.05/$1, in contrast to last Friday’s rate of N1,547.58/$1.

Similarly, the Naira slumped against the Pound Sterling in the spot market on Monday by N23.39 to trade at N1,906.98/£1 versus N1,883.59/£1 and depreciated against the Euro by N23.14 to sell for N1,613.48/€1 compared with last Friday’s N1,590.34/€1.

However, in the parallel market, the Nigerian currency improved its value against the Dollar during the session by N5 to quote at N1,665/$1 compared with the previous session’s N1,670/$1.

As for the cryptocurrency market, it turned red yesterday as the US President, Mr Donald Trump, didn’t bring up the much-expected subject of crypto in his inauguration speech on Monday afternoon.

Mr Trump had promised a far more friendly crypto policy stance than the previous administration but in the long speech that announced his plans in the coming days, he didn’t make mention of Bitcoin or crypto.

Just over the weekend, the President ignited a speculative frenzy with the Friday evening launch of the Trump meme coin, which was shortly followed by a meme coin associated with his wife, Melania.

Dogecoin (DOGE) crumbled yesterday by 6.3 per cent to $0.3419, Solana (SOL) slumped by 4.7 per cent to $235.32, Cardano (ADA) fell by 3.6 per cent to $0.9777, and Litecoin (LTC) moderated by 1.9 per cent to $114.98.

Further, Ethereum (ETH) went down by 1.7 per cent to $3,241.36, Binance Coin (BNB) retreated by 1.4 per cent to $693.30, Ripple (XRP) depreciated by 1.2 per cent to $3.06, and Bitcoin (BTC) tumbled by 0.8 per cent to $101,746.99, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.

Economy

Oil Prices Fall as Trump Announces Changes in US Energy Policies

Published

3 hours ago

21/01/2025

Adedapo Adesanya

By Adedapo Adesanya

Oil prices settled lower on Monday after Mr Donald Trump was sworn in for a second time as President of the United States.

On assumption of office, Mr Trump declared a national energy emergency immediately, promising to replenish strategic reserves and export American energy worldwide.

Consequently, Brent crude futures went down by 64 cents or 0.8 per cent to settle at $80.15 per barrel and the US West Texas Intermediate crude futures depreciated by $1.30 or 1.7 per cent to trade at $76.58 per barrel.

Mr Trump and his allies have signalled they would use the authority to rapidly approve new oil, gas, and electricity projects that typically take years to permit, and during his speech said he plans to unleash new oil and gas development on federal lands while reversing the Biden-Harris administration’s de-growth climate regulations.

Market analysts noted that while many of the executive actions will simply kick off a lengthy regulatory process, they extend by a large degree to the US energy industry, from oil fields to car dealerships.

These also underscore Mr Trump’s determination to reorient federal government policy behind oil and gas production, a sharp pivot from Biden’s efforts to curb fossil fuels.

He also said in his inaugural speech that he would impose tariffs and tax countries and promised an overhaul of the trade system.

Last week, prices rose for a fourth-consecutive weekly gain after the Biden administration imposed sanctions on more than 100 tankers and two Russian oil producers. This led to a scramble by top buyers China and India for prompt oil cargoes and a rush for ship supply.

Meanwhile, dealers of Russian and Iranian oil sought tankers not under sanctions for oil shipment.

While the new sanctions could cut supply from Russia by nearly 1 million barrels per day, market analysts noted that recent price gains could be short-lived depending on Trump’s actions as the new American president promised to help end the Russia-Ukraine war quickly.

Russian President Vladimir Putin congratulated Mr Trump on taking office hours, saying he was open to dialogue with the new US administration on Ukraine and nuclear arms.

Pressure was reduced based on easing tension in the Middle East after Hamas and Israel exchanged hostages and prisoners on Sunday which marked the first day of a ceasefire after 15 months of war.