Trading Tuesday
Ranora Daily - Your daily source for reliable market analysis and news.
Market Data
Local
Global
*Data as of 4pm WAT
Market News
Local
Abuja land: FG may revoke land allocations, demolish 6,000 buildings, slums - Punch
The Nigerian government is considering demolishing over 6,000 buildings in Abuja, including slums, to restore the city's master plan. The Minister of the Federal Capital Territory, Mohammed Bello, stated that illegal structures and undeveloped allocated land would be affected, aiming to uphold the city's orderliness despite mixed public reactions.
NDDC moves to end duplication in budget implementation - Punch
The Niger Delta Development Commission (NDDC) has begun a process to eliminate duplication and waste in the implementation of its budget. The commission said it would create a single project management office to oversee all projects, and that it would also establish a system for tracking and monitoring project implementation.
Naira hits new low of 900/$ after JP Morgan revelations - BNR
The naira hit a new low of N900 to the dollar on the parallel market on Monday, after JP Morgan revealed that it would no longer list the currency on its emerging markets bond index. JP Morgan's decision was due to concerns about the naira's stability and the country's economic outlook. The news sent the naira tumbling, and it is now trading at its weakest level since 2020.
Operators unsettled over Tinubu’s ‘hold’ on Petroleum Ministry - The Guardian
Oil and gas operators in Nigeria are unsettled over the decision of President Muhammadu Buhari to retain the Petroleum Resources Ministry under himself, with the appointment of separate ministers of state for petroleum and gas. The operators are concerned that the decision will lead to a lack of coordination and transparency in the oil and gas sector. They are also worried that it will give Tinubu too much power over the sector.
Global
S&P downgrades multiple US banks, citing ‘tough’ operating conditions - Reuters
S&P and Moody's downgraded U.S. regional banks due to rising funding costs and challenges in commercial real estate. Relentless Fed rate hikes increased deposit costs and led to higher interest rates, impacting credit strength.
Mortgage rates hit their highest point since 2000 - CNBC
Mortgage rates surged due to rising bond yields and concerns about prolonged high interest rates and inflation. The 30-year fixed mortgage rate reached 7.48%, the highest since November 2000, as Fed policy shift looms. This affects homebuyers' affordability and exacerbates supply issues in the housing market.
Market digests $1T jump in T-bill supply without hiccup - Bloomberg
The market efficiently absorbed a $1 trillion increase in U.S. Treasury bill supply, signaling resilience despite concerns about rising government debt levels and inflation.
Car prices might be unsustainable for buyers - WSJ
In the past five years, the market for new cars under $20,000 has drastically changed. In 2023, only the basic Mitsubishi Mirage hatchback remained in this category, comprising around 5,300 out of 7.7 million new vehicles sold in the U.S. during the first half of the year.
Booming trade with China helps boost Russia’s war effort - WSJ
China's influence on Russia's economy and military efforts is growing, evident in recent trade data that highlights Beijing's provision of various goods, including items like microchips and excavators, which could have military applications.
Weekly Investment Watchlist
Market Commentary
Asia and Australia:
Asian equities ended mostly higher on Tuesday following a positive session on Wall Street. Hong Kong and mainland bourses rose, with Hong Kong ending around 1% higher. Japan had a strong day, while Australia, South Korea, and Taiwan saw modest gains.
Asia bond prices fell again on Tuesday morning, pushing yields to multi-week or even multi-year highs. Japan’s 10-year yield hit over a 9-year high.
SoftBank’s Arm Holdings filed for the biggest US IPO since 2021, with the roadshow scheduled to begin in the first week of September and pricing in the second week. They are looking to raise $10 billion. If the ARM IPO goes through at its expected valuation of ~$64 billion, it would be the 3rd largest tech IPO in history.
The yuan is expected to have more room to depreciate to about 7.5 despite Beijing’s pushback.
BOJ’s underlying inflation metrics strengthened further to new highs in July, with the trimmed mean rising 3.3% YoY, surpassing the prior peak of 3.1% in May.
Europe, Middle East, Africa:
European equity markets were higher, with basic resources, real estate, and tech sectors advancing. Media, telecom, and food/beverage sectors lagged.
BHP posted its lowest profit in three years, raised capex, and cut its dividend.
HSBC predicted that the British Pound has peaked and will come under renewed pressure.
The CEO of Australia LNG producer Woodside Energy, O’Neill, referred to EU gas price volatility as “irrational” but also a clear sign of a tight market.
Italy may seek funds for the next budget from the gambling sector and banks.
The Americas:
Zoom’s earnings beat expectations, causing a +7% rally in after-hours trading.
Lowe’s beat expectations by $0.09, reported in-line revenues and reaffirmed its FY24 EPS guidance. The company saw a strong spring recovery and growth in Pro and online sales.
Dick’s Sporting Goods had disappointing earnings, missing EPS, revenue, and margin estimates.
BJ’s Wholesale beat expectations by $0.07 but missed on revenues while providing FY24 EPS guidance in-line.
Medtronic beat expectations by $0.09 and beat on revenues, raising its FY24 EPS and organic revenue growth guidance.
American Airlines confirmed a new collective bargaining agreement with its mainline pilots represented by the Allied Pilots Association, resulting in about a 46% higher increase in CASM (Cost Per Available Seat Mile) guidance.
The Week Ahead:
Monday:
China PBOC Interest Rate Decision
Tuesday:
US Existing Home Sales Change (MoM)(Jul)
Wednesday:
S&P Global/CIPS Composite PMI (Aug) PREL (UK)
Retail Sales (MoM)(Jun) (Canada)
S&P Global Manufacturing PMI (Aug) PREL(US)
Consumer Confidence (Aug) PREL (EU)
Thursday:
ECB Monetary Policy Meeting Accounts (EU)
Durable Goods Orders (Jul)
Friday:
GFK Consumer Confidence (Aug) (UK)
Investment Tip of The Day
Continuously Educate Yourself: Commit to ongoing learning about financial markets, investment strategies, and economic trends. Informed decisions are vital for successful investing.
Meme of the Day
