Market Data
Local
Global
*Data as of 4pm WAT
Market News
Local
Tinubu orders electricity supply cut off to Niger Republic - Business News Report
Nigeria has cut electricity supply to Niger Republic following a presidential directive, possibly in compliance with ECOWAS sanctions. Nigeria has been a major electricity supplier to Niger, but the ECOWAS leaders demanded a return to democracy within seven days or face sanctions and military intervention after the military coup in Niger.
High food prices loom, USAID warns Nigeria, others - Punch
The United States Agency for International Development (USAID) warns African countries, including Nigeria, to prepare for higher food prices due to Ukraine's temporary halt in food exports. The impact will be felt more in developing import-dependent nations relying on grain imports from Ukraine.
Global
US Productivity Jumps By Most Since 2020, Blunting Labor Costs - Bloomberg
US labor productivity saw a significant increase of 3.7% in the second quarter, the highest in nearly three years, offsetting rising labor costs. Higher productivity can help reduce inflationary pressures caused by increased wages. Hourly compensation rose 5.5%, but adjusted for inflation, it increased by 2.7%, the first rise in almost a year.
The Bank of England Raises Rates for 14th Meeting in a Row - New York Times
The Bank of England raised interest rates by 0.25 percentage point to 5.25% to combat high inflation, with caution about further rate increases. They expect inflation to fall to just below 5% by year-end but anticipate slow economic growth due to higher rates. Further tightening may be required if inflation pressures persist.
Weekly Investment Watchlist
Market Commentary
Asia and Australia
Asian equities mostly traded higher. Hang Seng rebounded, breaking a three-day losing streak. Mainland China stocks also edged up with higher trading volumes. ASX and Nikkei both recorded gains, while Taiex and Kospi closed slightly lower.
PBOC Governor Pan met with property developers and pledged funding support, reassuring that the bank would keep China’s banking system with reasonably ample liquidity.
The rare vow from the Politburo on market support is leading to expectations that Beijing will take steps to increase trading activity.
RBA minutes were released, indicating that inflation is not expected to return within the 2-3% target band until late 2025. Wage growth peak was slightly revised up, but the near-term GDP growth outlook was downgraded due to the larger drag on consumption growth from the cost of living and higher rates.
Europe, Middle East, Africa
European equity markets were mostly higher, following the STOXX 600's three negative closes in a row on Thursday.
Saudi Arabia warned that it could deepen cuts to oil production as it extended voluntary supply curbs with Russia for another month.
Eurozone retail trade unexpectedly declined in June, coming in at (0.3%) vs. the expected +0.2% MoM or (1.4%) vs. (1.7%) YoY.
German factory orders unexpectedly jumped the most in three years in June, driven by strong demand from the aerospace sector.
ECB’s Lane sees lower headline inflation ahead, while core inflation may have peaked in H1.
For the first time, the Bank of England (BoE) referred to its current monetary policy stance as “restrictive,” which some investors interpreted as a sign that tightening may be nearing its end. However, some analysts still predict two more 25bps rate hikes by the MPC for this year, taking the Bank Rate to 5.75%.
The Americas
Amazon’s beat was driven by both AWS and e-commerce. Amazon’s Q2 revenue beat expectations by more than 2%, and operating income was more than 60% ahead.
BofA flow data shows investors fleeing equities amid US recession risk, although tech funds still saw inflows.
Hedge funds lost more than $6 billion this year betting against cruise lines and hotels, underestimating US consumer resilience.
US 30-year Treasury bonds head for their worst week of the year amid rising bets on a recession.
Morgan Stanley doesn’t see 3% GDP growth for the US economy, discussing the GDP growth coming in from nearshoring activity that may not be as sustainable.
The Week Ahead:
Monday:
Large Retailer Sales (Japan)
NBS Manufacturing PMI (China)
Chicago Purchasing Managers Index (US)
Tuesday:
Unemployment Rate (Japan)
Caixin Manufacturing PMI (China)
Unemployment Rate (EA)
S&P Global Manufacturing PMI (Canada)
ISM Manufacturing PMI (US)
Wednesday:
BOJ Monetary Policy Meeting Minutes (Japan)
ADP Employment Change (US)
U.S Added 324,000 Jobs in July Beating Estmate of +190,000 Jobs
Thursday:
US credit rating downgraded by Fitch Ratings from an AAA to AA+.
US Treasury boosts quarterly bond sales for the first time in 2.5 years in order to help finance budget deficits.
US ADP nonfarm payrolls for July come in at 324k; est: 190k.
Softbank (SFTBY) chip maker ARM is targeting a $60b IPO in September.
Friday:
US non-farm productivity came in at +3.7% YoY; est: 2.2%. Biggest rise since 2020.
US weekly jobless claims come in at 227k; est: 225k.
Bank of England (BOE) raises its benchmark rate .25bps and it is now 5.25%.
Investment Tip of The Day
Consider investing in companies with a sustainable competitive advantage and a track record of consistent profitability. Evaluate factors such as strong brand recognition, innovative products or services, cost leadership, and a stable customer base.