Wealth Wednesday
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Market Data
Local
Global
*Data as of 4pm WAT
Market News
Local
17 independent power distributors get licences, 10 operational - Punch
Seventeen independent power distributors have successfully secured licenses in Nigeria, reflecting a notable expansion in the country's independent power sector. However, it's worth noting that at present, only ten of these licensed entities are actively operating, indicating potential opportunities for further development and growth in this sector.
Global
Oil falls over $2 on demand fears, Saudi confirms cuts to year-end - Reuters
Oil prices dropped due to concerns about macroeconomic challenges affecting demand, despite Saudi Arabia and Russia pledging to extend crude output cuts until the end of 2023. Brent crude fell 2.22% to $88.90 a barrel, and U.S. West Texas Intermediate crude dropped 2.35% to $87.13 per barrel.
Weekly Investment Watchlist
Market Commentary:
Asia and Australia:
Asian equities experienced significant declines on Wednesday, with the Nikkei extending its selloff to its lowest level since mid-May. Hong Kong approached an 11-month low due to slumps in tech stocks, while mainland China remained offline. The ASX also reached an 11-month low, and South Korea faced sharp losses after a holiday break. Taiwan was weighed down by falling semiconductor stocks, and Southeast Asia displayed mixed performance. India’s trading session was in negative territory.
The Japanese Yen made headlines in Asian markets as it reached 150 against the US Dollar, a significant threshold for many analysts. However, the USD/JPY didn’t stay at this level for long and dropped to 147.27 before recovering to 149. It was back down to 148.87 on the following day. There was no official news of intervention by Japan.
The Bank of Japan conducted a series of unscheduled purchases of Japanese Government Bonds as benchmark 10-year yields hit their highest level in a decade. They offered to buy JPY 675 billion ($4.25 billion) worth of 5 to 10-year maturity JGBs, surpassing market expectations. A recovery in Japanese equities might be expected if the Yen can stabilize above 149.
The Reserve Bank of New Zealand (RBNZ) left the OCR (Official Cash Rate) unchanged at 5.50%, in line with expectations. They reiterated the need to maintain restrictive rates to reduce inflation during a prolonged period of subdued activity. There is a near-term risk that activity and inflation may not slow as expected.
In South Korea, industrial production rose by 5.5% MoM in August, marking the fastest growth since June 2020 and significantly surpassing consensus expectations. This rebound was attributed mainly to recovering overseas semiconductor demand after encouraging signs from September exports.
Europe, Middle East, Africa:European equity markets recovered from early losses and were trading higher after closing lower on the previous day, nearing six-month lows. The DAX briefly dipped below 15,000 for the first time since March 2023 as the 10-year bund yield crossed 3%, a level not seen since 2011. Yields in Europe still have potential for further upside, and the outlook remains bearish for European equities.
September Eurozone PMI services came in at 48.7, slightly better than the preliminary reading of 48.4 and surpassing August’s reading of 47.9, marking a two-month high. The overall composite PMI index for September was 47.2, compared to August’s reading of 46.7, also a two-month high.
Services PMI readings across Europe showed slight improvements, with Spain and Germany returning to expansionary territory. However, France experienced a slight decline.
Eurozone retail sales in August missed expectations, showing a -1.2% MoM decrease compared to expectations of -2.1% YoY. The previous month’s M/M figure was revised higher from -0.2% to -0.1%. This data suggests weaker consumer demand due to rising living costs.
UK PMI services data indicated that the business downturn eased after inflation data and the Bank of England’s pause in rate hikes.
The Americas:President Biden planned to announce the approval of an additional $9 billion in student debt relief, which could have significant implications for consumer spending.
Unions representing 53,000 Las Vegas workers were in talks, and there was a potential strike looming as early as October 6. This could bring a fresh round of wage negotiations and put pressure on core CPI (Consumer Price Index).
August JOLTS job openings received attention due to an unexpected rise to 9.6 million compared to July’s 8.8 million. This was seen as a positive sign for the labor market, suggesting it was moving toward better balance. However, the quits rate increased only marginally, with 3.638 million quits compared to 3.619 million in July.
US High Yield spreads were on the rise, with credit markets showing more weakness than equities. The MOVE Index, which tracks bond volatility, reached 141.67, the highest level since May 2023.
The Week Ahead:
Monday: US ISM Manufacturing PMI rose to 49 in September of 2023 from 47.6 in the previous month
Tuesday:
Wednesday:
US private payrolls up 89,000 in September
US ISM Services PMI is at a current level of 54.50, up from 52.70 last month
Thursday:
Unemployment Claims (US)
Friday:
Non-Farm Employment Change (US)
Unemployment Rate
Investment Tip of The Day
Avoid Herd Mentality: Steer clear of making investment decisions solely based on what others are doing. Herd mentality can lead to irrational exuberance or panic, increasing investment risk.
Meme of the Day
