Finance Friday
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Market Data
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Global
*Data as of 4pm WAT
Market News
Local
Nigeria: Supreme Court Dismisses Atiku's Appeal, Affirms Tinubu's Election - All Africa
Nigeria's Federal Executive Council (FEC) has approved contracts worth over N50 billion for various projects, including the rehabilitation of the Lagos-Ibadan Expressway and the provision of equipment for the Nigeria Customs Service. These approvals reflect the government's commitment to infrastructure development enhance service delivery.
FG, Chinese consortium sign $463m power development deal - Punch
The Federal Government of Nigeria signed a $463 million agreement with a Chinese consortium for the development of the Mambilla Hydropower Project in Taraba State. The project aims to generate about 3,050 megawatts of electricity and is expected to significantly boost the country's power supply.
Global
U.S. GDP grew at a 4.9% annual pace in the third quarter, better than expected - CNBC
In Q3, the US economy grew faster than anticipated, propelled by robust consumer demand, in spite of increased interest rates, inflationary pressures, and other national and international obstacles. The GDP increased from an unrevised 2.1% rate in the second quarter to a seasonally adjusted 4.9% annualised pace in the July–September period.
Weekly Investment Watchlist
Market Commentary:
Asia and Australia:
Asian equities were predominantly higher on Friday. Japan is poised to end the day with gains, although it is still set to conclude the week lower, aligning with the performance of developed markets. Australia bounced back, but New Zealand shares slipped once more. There were solid gains in Greater China, with Hong Kong up by over 2%, and Seoul and Taipei also recovering. Meanwhile, India opened with early gains, and the rest of Southeast Asia witnessed mixed performances.
The core Consumer Price Index (CPI) in Tokyo increased by 2.7% year-on-year in October. This exceeded both consensus estimates and the previous month’s figure of 2.5%. It’s worth noting that this marks the first strengthening in four months, although it is still well below the peak of 4.3% recorded in January. The ex-fresh food and energy series of the CPI also rose by 3.8%, surpassing the consensus of 3.7% after September’s figure was revised from 3.8% to 3.9%.
In China, profits at industrial firms for September increased by 11.9% year-on-year for the second consecutive month, following a 17.2% surge in August. This was a significant milestone, as it was the first expansion in more than a year. Although profits fell by 9% year-on-year for the first nine months, this represents a narrowing of the pace of decline compared to the 11.7% decrease during January to August, marking the seventh consecutive month of improvement.
Europe, Middle East, Africa:
European equity markets were mostly higher, although there was notable underperformance in the French CAC due to a selloff in Sanofi.
As anticipated, the European Central Bank (ECB) decided to keep rates steady during its recent meeting, providing minimal new information. It appears that further decisions have been deferred until December, when the next set of forecasts is due. The ECB noted the easing of inflation due to base effects but did not focus on rising oil prices. ECB President Lagarde mentioned that they had not discussed the PEPP (Pandemic Emergency Purchase Programme) and discussed rates being pushed higher due to developments in the US.
UK bank stocks were under pressure following weak earnings from NWG-GB. This has rounded off a challenging week for the sector, as the Q3 update indicated a downgrade in profit outlook after reporting weaker-than-expected net income.
Spain’s GDP came in at 0.3% quarter-on-quarter, down from 0.44% in the previous period, while industrial sales in Italy fell to -5% year-on-year, compared to -1.6% in the preceding month.
The Americas:
Exxon Mobil Corp. increased its quarterly dividends to 95 cents per share, exceeding expectations. The company also posted a surprise increase in cash flow, benefiting from rising crude prices and improved US oil-refining margins. Third-quarter free cash flow more than doubled compared to the previous period, reaching $11.7 billion, far exceeding the average estimate of $9.36 billion.
Amazon reported Q3 operating income of $11.19 billion, surpassing its prior guidance of $5.5-8.5 billion. The AWS (Amazon’s Cloud Services) segment experienced a 12.3% year-on-year growth in sales, reaching $23.06 billion, and the Advertising Services segment revenue grew by +25% CC (constant currency) to $12.06 billion. Although the company provided downside guidance on Q4 Revenue, its stock price traded higher after hours and in the pre-market on the following morning.
The first print of Q3 GDP showed an annualized growth rate of 4.9% quarter-on-quarter, the fastest pace in nearly two years, exceeding the consensus estimate of 3.8%. The core Personal Consumption Expenditure (PCE) price index came in at 2.4%, which was 0.1 percentage point below estimates. The report indicated that personal consumption increased by 4%, in line with consensus estimates, marking the highest level in two years.
Initial jobless claims reached 210,000, in line with the consensus, while the prior week’s figure was revised upward by 2,000 to 200,000. For the week ending October 14, continuing claims reached 1.79 million, exceeding the consensus of 1.735 million and the previous week’s figure of 1.727 million (revised from 1.734 million).
In terms of Bank of America Weekly Flows, there was an inflow of $29.2 billion into cash, an inflow of $2.2 billion into bonds, an inflow of $0.5 billion into gold, and an outflow of $2.1 billion from equities.
The Week Ahead:
Monday:
Tuesday:
US Flash Manufacturing Purchasing Managers' Index (PMI) was slightly higher than forecast, at 50 versus 49.5
Wednesday:
UK Consumer Price Index rose by 6.3%
Thursday:
Advance GDP (US)
Unemployment Claims (US)
Friday:
US Q3 Advanced GDP print comes in at 4.9% YoY; est: 4.3%.
US weekly jobless claims come in at 210k; est: 208k.
Investment Tip of The Day
Monitor Portfolio Turnover: Keep an eye on portfolio turnover rates, especially in actively managed funds. High turnover can result in increased transaction costs and tax implications.
Meme of the Day
