Finance Friday
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Market Data
Local
Global
*Data as of 6pm WAT
Market News
Local
Foreign airlines fear $200m loss over naira depreciation - Punch
Airlines fear losing $200m due to trapped funds in Nigeria as naira depreciates. IATA says $700m remains trapped despite CBN claims of completing payments. Travel agents ask foreign airlines to lower fares or face consequences. Naira's recent plunge from 900/dollar to 1400/dollar intensifies concerns.
Stock Darket Depreciates by N480.8bn on Profit-taking in Tier-1 Banks - This Day
Nigerian stock market falls for 2nd day, losing N480 billion as investors cash out, particularly from major banks. Overall market value down 0.86%, with only 7 stocks gaining vs 53 losing. Zenith, UBA, Access Corporation among biggest losers. Trading volume surges despite negative sentiment.
Forex Crisis: Importers Dump Nigerian Ports For Cotonou, Togo - Leadership
Nigerian importers are abandoning local ports due to rising customs exchange rates and unstable foreign exchange, shifting to ports in neighboring countries like Ghana and Togo. This trend is expected to lead to smuggling and loss of government revenue.
NNPCL board approves dollar revenue transfer to CBN - Punch
Nigerian oil firm NNPCL to move significant revenue to central bank, sparking debate. CBN assures smooth transition and no fuel price increase despite public concerns about legality and independence.
Tinubu approves N126bn for housing projects nationwide - Sun News
Nigeria's government has approved N126.5 billion to build 100,000 houses in 18 months, starting with 3,112 units in the capital. This public-private partnership aims to ease the housing burden and create jobs. The president subsidized 400 units for low-income earners and ordered better infrastructure access for all projects.
Global
S&P 500 briefly tops 5,000 for first time ever - Fortune
U.S. stocks hit new highs as strong job data and earnings reports boosted investor sentiment. S&P 500 briefly topped 5,000 for the first time, while Disney and Ralph Lauren surged on positive results. However, PayPal and S&P Global fell after missing expectations. Bond yields rose as traders anticipate later Fed rate cuts.
Big Tech’s $140 Billion Cash Haul Points to Shareholder Returns - Bloomberg
Big Tech, Apple, Microsoft, Alphabet, Amazon, and Meta, reported a record $139.5 billion cash in Q4 2023. Expectations rise for increased shareholder returns through dividends and buybacks, particularly after Meta's successful move. Amazon likely to boost capital returns.
US Initial Jobless Claims Drop for the First Time in Three Weeks - Bloomberg
US job market holds steady despite recent layoffs, with unemployment claims falling to lowest level in 3 weeks. This suggests businesses are keeping workers, but high-profile job cuts hint at potential future slowdown in demand. Weekly claims volatility remains, but overall trend points to a resilient labor market currently.
Putin Takes Hard Line on Ukraine in Tucker Carlson Interview - Bloomberg
Russian President Putin, in an interview with Tucker Carlson, says Russia hasn't achieved goals in Ukraine, proposes negotiations if U.S. halts weapons supply to Kyiv. Mentions potential journalist swap. Interview amid crackdown on dissent in Russia and U.S. aid debate for Ukraine.
Market Commentary:
Overview:
The US dollar saw a notable surge against the Japanese yen (JPY) as higher bond yields drove it to its peak levels since November. Notably, several Asian markets, including China, remain closed in observance of the Lunar New Year, while in the United States, attention is directed towards the anticipated revisions in the Consumer Price Index (CPI).
Currencies/Macro:
US dollar showed mixed performance against G10 currencies.
EUR/USD fluctuated between 1.0780 and 1.0742.
GBP/USD rebounded from 1.2572 to 1.2620.
USD/JPY rose from 148.00 to 149.48, a two-month high, influenced by BoJ comments and higher Treasury yields.
Weekly initial jobless claims were at 218k (est. 220k), and continuing claims were at 1.871m (est. 1.875m).
Wholesale sales in December rose +0.7%m/m (est. +0.3%m/m).
Richmond Fed president Barkin emphasized patience regarding the timing of rate cuts, citing robust demand and a strong labor market.
ECB Chief Economist Lane highlighted the need for further progress in the disinflation process before adjusting policy.
BoE official Mann expressed a finely balanced vote for a rate hike but suggested the UK would lag behind the US and Eurozone in returning inflation to its target.
Interest Rates:
US 2yr treasury yield rose from 4.41% to 4.45%, and the 10yr yield rose from 4.09% to 4.15%.
Markets priced the Fed funds rate, currently 5.375% (mid), with a 15% chance of a cut in March and a 70% chance of a cut by May.
Markets anticipated the RBA cash rate to remain unchanged in March, with an 85% chance of a cut by August.
Main and CDX each improved by half a bp to 59.5 and 55, respectively.
US IG cash remained unchanged.
Europe saw 7 issuers price ~EUR7.5bn.
Commodities:
Crude oil prices surged due to Israel PM Netanyahu’s dismissal of a potential cease-fire and a US drone strike.
March WTI contract rose by 3.5% to $76.46, and April Brent contract rose by 3.3% to $81.81.
Gasoil contract increased by 4%.
Crude market disruptions were countered by ConocoPhillips' optimism on US crude production.
Copper declined by 1% to $8,226, and zinc fell by 3% to $2,328.
Global inventories of copper, nickel, and zinc surged, contributing to negative sentiment.
Iron ore markets gained as Chinese home purchase limits were relaxed in Shenzhen.
Day Ahead:
US:
Annual CPI revisions and anticipation for January CPI.
Eurozone:
The Week Ahead:
Monday:
Tuesday:
US The ISM Services PMI jumped to 53.4 in January 2024 from 50.5 in December, beating forecasts of 52
Wednesday:
Thursday:
US initial jobless claims down by 9,000 to 218,000
Friday:
Investment Tip of The Day
Assess Market Reaction to Earnings Reports: Analyze how the market typically reacts to earnings reports of companies in your portfolio. This historical perspective can inform future investment decisions.
Service Spotlight of the week - Advisory Services
Meme of the Day
