Economy
Wall Street Opens Slighly Higher on Looming Fed Outcome
By Investors Hub
The major U.S. index futures are currently pointing to a slightly higher opening on Monday following the strong upward move seen last week.
New on the merger-and-acquisition front may generate some early buying interest, although trading activity is likely to be subdued ahead of key events later this week.
The Federal Reserve?s monetary policy announcement is likely to be in the spotlight, with the central bank widely expected to cut interest rates by at least 25 basis points on Wednesday.
Assuming the Fed cuts rates as expected, traders are likely to pay close attention to accompanying statement for clues about the potential for future rate cuts.
The Labor Department is also due to release it closely watched monthly jobs report, which could also have a significant impact on the outlook for rates.
Employment is expected to climb by 170,000 jobs in July after jumping by a much bigger than expected 224,000 jobs in June, while the unemployment rate is expected to hold at 3.7 percent.
Reports on personal income and spending, consumer confidence, pending home sales, manufacturing activity and the U.S. trade deficit are also likely to attract attention in the coming days.
Stocks moved mostly higher over the course of the trading day on Friday, rebounding following the weakness seen on Thursday. With the turnaround, the Nasdaq and the S&P 500 reached new record closing highs.
The major averages all closed in positive territory, although the Nasdaq posted a standout gain amid strength in the tech sector. The Nasdaq surged up 91.67 points or 1.1 percent to 8,330.21, while the S&P 500 climbed 22.19 points or 0.7 percent to 3,025.86 and the Dow rose 51.47 points or 0.2 percent to 27,192.45.
For the week, the Nasdaq and the S&P 500 jumped by 2.3 percent and 1.7 percent, respectively, but the narrower Dow inched up by just 0.1 percent.
The rally by the tech-heavy Nasdaq was partly due to spike by shares of Google parent Alphabet (GOOGL), which soared by 9.6 percent after the tech giant reported its second quarter results.
Alphabet beat analyst estimates on both the top and bottom lines and also announced a massive $25 billion share repurchase program.
Shares of Twitter (TWTR) also surged higher after the social media giant reported better than expected second quarter earnings, revenues, and daily users.
Fast food giant McDonald’s (MCD) posted a more modest gain after reporting second quarter earnings that met expectations on stronger than expected same-store sales growth.
On the other hand, shares of Amazon (AMZN) moved to the downside after the online retail giant reported second quarter earnings that missed analyst estimates.
Semiconductor giant Intel (INTC) also turned lower despite reporting second quarter results that exceeded estimates and boosting its full-year guidance.
Traders were also reacting to a report from the Commerce Department showing U.S. economic growth slowed in the second quarter but still exceeded economist estimates.
The Commerce Department said real gross domestic product climbed by 2.1 percent in the second quarter following the 3.1 percent jump in the first quarter. Economists had expected the pace of GDP growth to slow to 1.9 percent.
The stronger than expected GDP growth reflected positive contributions from consumer spending, federal government spending, and state and local government spending.
Meanwhile, negative contributions from private inventory investment, exports, non-residential fixed investment and residential fixed investment limited the upside.
“Now in its longest expansion on record, the U.S. economy continues to look healthy,” said Oxford Economics’ Chief U.S. Economist Gregory Daco and U.S. Economist Jake McRobie.
They added, “However, given the persistent protectionist draft, the lingering policy uncertainty breeze, the sniffling global economy, and the cooling room temperature at home, now may be an opportune time for a Fed immunization shot.”
Tobacco stocks showed a substantial move to the upside on the day, driving the Dow Jones Tobacco Index up by 3.2 percent. The index rebounded strongly after ending the previous session at its lowest closing level in a month.
Significant strength also emerged among telecom stocks, as reflected by the 1.8 percent jump by the NYSE Arca North American Telecom Index.
Sprint (S) and T-Mobile (TMUS) helped lead the telecom sector higher after the Justice Department approved the $26 billion merger of the wireless giants.
Financial stocks also turned in a strong performance on the day, with the KBW Bank Index and the NYSE Arca Broker/Dealer Index climbing by 1.5 percent and 1.2 percent, respectively.
On the other hand, natural gas stocks extended the sell-off seen in the previous session, dragging the NYSE Arca Natural Gas Index down by 2 percent to a seven-month closing low.
By Aduragbemi Omiyale
More petroleum marketers are looking to take advantage being offered by the Dangote Refinery in Lagos through its bulk-purchase incentives, allowing petrol stations to sell premium motor spirit (PMS), otherwise known as petrol, cheaper to motorists.
Recall that recently, Dangote Refinery entered into a deal with MRS Oil Nigeria, Ardova Plc, Heyden for the purchase of petrol at least two million litres at N909 per litre.
With this agreement, MRS Oil has been able to dispense to customers at a pump price of N935 per litre across its stations in Nigeria.
For those not under this arrangement, they have been battling with price instability, especially after depot owners recently increased their price to N950 per litre from N909 per litre because of the rise in crude oil prices in the international market.
Worried by this and attracted by the bulk-purchase agreement incentives of Dangote Petroleum Refinery, the Independent Petroleum Marketers Association (IPMAN) is already having talks to buy directly from the Lagos-based oil facility.
The national president of the group, Mr Abubakar Maigandi Garima, said members are eager to sign on with Dangote Refinery for the bulk-purchase agreement.
He argued that members could not continue to depend on depot owners for products when they can buy directly from the refinery bearing in mind that the minimum quantity to buy from Dangote Refinery is two million litres at N909 per litre.
The desire to be part of the bulk-purchase agreement, it was also gathered, was also apparently being fuelled by the testimonies from motorists who have been praising the impressive burn rate of fuel sourced from Dangote Refinery and sold in MRS filing stations which they said lasts longer compared to other products imported into the country and sold by others.
The management of the Dangote Refinery, citing economic relief provided by President Bola Ahmed Tinubu’s crude-for-naira swap initiative, had announced a bulk-purchase offer incentives to the three leading downstream sector operators, so that Nigerians could heave a sigh of relief on the reduced pump price.
By Adedapo Adesanya
The World Bank has projected a 3.6 per cent economic growth for Nigerian in 2025 and 2026 on the back of ongoing reforms by the federal government.
The Bretton Wood institution in its report titled Global Economic Prospects, January 2025 published on Thursday, said recent reforms, including subsidy removal, Naira liberalisation and the introduction of tax reform bills would help to boost business confidence.
“In Nigeria, Gross Domestic Product (GDP) growth increased to an estimated 3.3 per cent in 2024, mainly driven by services sector activity, particularly in financial and telecommunication services.
“Macroeconomic and fiscal reforms helped improve business confidence. In response to rising inflation and a weak naira, the central bank tightened monetary policy.
“Meanwhile, the fiscal deficit narrowed due to a surge in revenues driven by the elimination of the implicit foreign exchange subsidy, following the unification of the exchange rate and improved revenue administration,” a part of the report stated.
The World Bank noted that the wider Sub-Saharan Africa, to which Nigeria belongs would see a 4.1 per cent growth in the current year, before seeing a 4.3 per cent rise in 2026.
“Growth in Sub-Saharan Africa, SSA is expected to firm to 4.1 per cent in 2025 and 4.3 per cent in 2026, as financial conditions ease alongside further declines in inflation. Following weaker-than-expected regional growth last year, growth projections for 2025 have been revised upward by 0.2 percentage points, and for 2026 by 0.3 percentage points, with improvements seen across various subgroups. At the country level, projected growth has been upgraded for nearly half of SSA economies in both 2025 and 2026.
“Growth in Nigeria is forecast to strengthen to an average of 3.6 per cent a year in 2025-26. Following monetary policy tightening in 2024, inflation is projected to gradually decline, boosting consumption and supporting growth in the services sector, which continues to be the main driver of growth,” it added.
The global lender disclosed that oil production is expected to increase over the forecast period but remain below the 1.5 million barrels per day quota of the Organisation of the Petroleum Exporting Countries (OPEC).
By Adedapo Adesanya
Four price gainers helped the NASD Over-the-Counter (OTC) Securities Exchange close higher by 0.35 per cent on Thursday, January 16.
The value of the trading platform jumped by N3.69 billion during the session to N1.072 trillion from the N1.068 trillion it closed in the preceding session, and the NASD Unlisted Security Index (NSI) made an addition of 10.67 points to wrap the session at 3,103.83 points compared with 3,093.16 points recorded at the previous session.
Industrial and General Insurance (IGI) Plc added 3 Kobo to its price yesterday to trade at 33 Kobo per unit compared with Wednesday’s closing price of 30 Kobo per unit, Newrest Asl Plc appreciated by N2.85 to N31.18 per share from N28.53 per share, 11 Plc gained N2.90 to close at N256.00 per unit versus the N253.10 per unit it finished a day earlier, and FrieslandCampina Wamco Nigeria Plc grew by 21 Kobo to N39.16 per share, in contrast to midweek’s N38.95 per share.
On Thursday. there was an 85.3 per cent increase in the volume of securities traded by investors to 1.2 million units from the 666,494 units recorded in the preceding session, the value of shares traded surged by 8.9 per cent to N18.0 million from N16.5 million, and the number of deals leapt by 65 per cent to 33 deals from 20 deals.
FrieslandCampina Wamco Nigeria Plc remained the most active stock by value (year-to-date) with 3.4 million units worth N134.9 million, trailed by Geo-Fluids Plc with 8.9 million units sold for N43.0 million, and Afriland Properties Plc valued at 690,825 sold for N11.1 million.
IGI Plc closed the day as the most active stock by volume (year-to-date) with 23.5 million units sold for N5.3 million, followed by Geo-Fluids Plc with 8.9 million units valued at N43.0 million, and FrieslandCampina Wamco Nigeria Plc followed with 3.4 million units worth N134.9 million.
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