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Stock Market

U.S Stocks post worst monthly drop since March

Blue-chip Dow just ended the month of October with a 4.6% loss, its worst monthly performance since March.

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U.S Stocks set to surge higher, on hopes of a stimulus package deal, What Does The Circuit Breaker Tell Us

Global investors are hoping for better returns in the U.S stock markets, amid a plunge in returns recorded across its market spectrum.

What we know

The blue-chip Dow just ended the month of October with a 4.6% loss, marking its worst monthly performance since March. The S&P 500 and the Nasdaq dropped by 2.8% and 2.3% last month respectively – both suffering their second straight negative month.

READ: Petrol supply drops by 21%, NNPC gives reasons for high production cost

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The major stocks indexes had a bad showing in October, as seen coming off their worst week since March 20, as COVID-19 cases explode at an alarming rate, fiscal stimulus negotiations are torn apart, and shares of leading tech brands like Amazon and Apple dropped following their quarterly earnings reports.

READ: MTN Nigeria posts N975.76 billion revenue for Q3 2020

What they are saying

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Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, gave further insights on the performance of U.S equities and how the upcoming U.S election would affect its volatility at least in the near term.

Risk reduction into the US election should allow asset prices to react more consistently with outcome-based scenarios after the event.

READ: U.S stock futures trade flat, Apple regains $2 trillion market value

Last week, the S&P 500 (-5.6%) and front-month WTI (-10.2%) recorded their largest weekly declines since March. The underperformance of reflationary trades over the past week (lower industrial metal prices, EM equities, and a stronger USD) suggests improving risk: reward in these assets on a Democratic sweep of Congress.

READ: Football: Manchester United net debt rises by 133% to £474.1million

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What to expect

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The US election will determine how much fiscal stimulus is possible and whether there will be a new trade war with China. Both the axes are pivotal to USD/Asia’s 2021 outlook.

Explore Data on the Nairametrics Research Website

Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment Trading. Featured Financial Market Analysis for a Fortune Global 500 Company. Member of the Chartered Financial Analyst Society. Follow Olumide on Twitter @tokunboadesina or email [email protected]

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Market Views

Tesla up 500% in 2020, near $500 billion market value

The tech powerhouse is now less than $6 billion short of approaching the $500 billion market value.

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Tesla up 500% in 2020, near $500 billion market value, Survey unveils Elon Musk as the most inspirational leader in tech 

Tesla, the electric car automaker, has gained 500% in 2020 and has become by far the world’s most valuable automaker in the world, despite it producing far less than Volkswagen, Toyota, or General Motors.

The tech powerhouse is now less than $6 billion short of approaching the $500 billion market value, and extending its surge since reports struck Wall Street on Tesla making its S&P 500 debut on December 21, forcing index funds to buy billions of dollars of its share.

READ: U.S stock futures trade flat, Apple regains $2 trillion market value

Unsurprisingly, it became global investors’ choice amid its recent price action rising by 6% – showing a gain of over 6%. Tesla Inc. extended its rally at the most recent trading session ahead of its December debut in the S&P 500 (SPX), as it is now worth a market value of $494 billion.

READ: Nigeria spends N1.08 trillion to import used cars and motorbikes in one year 

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Its market capitalization is higher than the Gross Domestic Product (GDP) of any African country, Nigeria – $448.1billion, South Africa – $351.4billion, Egypt – $303.2billion, Algeria – $169.98billion, Morocco – $118.7billion, Ethiopia – $96.12billion, Kenya – $95.5 billion, Angola – $94.6 billion, Ghana – $66.9 billion, Tanzania – $63.2 billion.

READ: Dangote Cement, Nigerian Breweries drop, investors lose N46 billion

What you should know

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Now worth $494 billion, Tesla will increase the concentration of heavyweight companies within the S&P 500. It will be the 7th most valuable company within the index, just behind Berkshire Hathaway and ahead of Visa Inc., according to Refinitiv data.

READ: Crypto: UniSwap gives each owner over $2,000

  • About a fifth of the car company’s shares is owned by its Chief Executive, Elon Musk and other insiders.
  • The S&P 500 is weighted by the number of companies’ stocks available on the stock market.
  • The car company’s influence within the benchmark will be slightly reduced, putting it in 8 positions, just behind Johnson & Johnson, with an equivalent of about 1% of the S&P 500 index.

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Stock Market

Nigerian stocks end near stalemate, despite gains from Nestle, Airtel, Dangote

A total volume of 568million units of shares, valued at N7.32billion exchanged hands in 8,928 deals.

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Bulls Win Grand Slam in Nigeria's stock market

Nigerian bourse ended Monday’s trading session near a stalemate, as the All Share Index dropped slightly by 0.04% to close at 34,121.78 points. Thus, the YTD performance currently stands at 27.56%.

A total volume of 568million units of shares, valued at N7.32billion exchanged hands in 8,928 deals. ZENITHBANK was the most traded shares by volume and valued at 79.7million units and N1.91billion.

  • Market sentiment was negative, as market breadth came in at 9.2x  with 46 decliners and 5 advancers.
  • The sectorial performance was bearish as Banking, Consumer Goods, Insurance, Oil & Gas were down by 4.72%, 2.07%, 2.07%, and 1.62% respectively, while the Industrial index closed as the lone gainer, up by +2.72%.

Sector performance

  • NSE Banking Index: Down by -4.72%, on sell-offs in WEMABANK (-9.09%), ACCESS (-8.14%), UBA (-6.10%), and ZENITHBANK (-5.66%).
  • NSE Consumer Goods Index: Fell by -2.07%, due to sustained losses in GUINNESS (-9.55%), PZ (-9.43%), and FLOURMILL (-8.43%).
  • NSE Insurance Index: Dipped by -2.07%, on price decline in CUSTODIAN (-10.00%), CHIPLC (-9.38%), and LINKASSURE (-9.09%).
  • NSE Oil & Gas Index: Dipped by -1.62%, as ARDOVA (-10.00%) and OANDO (-9.97%) declined in price.
  • NSE Industrial Index: Up by +2.72% due to the price appreciation in BUACEMENT (+4.77%) and DANGCEM (+3.42%)

Top gainers

  1. AIRTELAFRI up 5.00% to close at N500
  2. BUACEMENT up 4.77% to close at N53.45
  3. DANGCEM up 3.42% to close at N193.2
  4. NESTLE up 1.82% to close at N1400
  5. NEM up 0.78% to close at N2.6

Top Losers

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  1. ARDOVA down 10.00% to close at N13.5
  2. WAPCO down 10.00% to close at N22.05
  3. GUINNESS down 9.55% to close at N18
  4. FLOURMILL down 8.47% to close at N25.4
  5. STANBIC down 8.02% to close at N39.55

Outlook

Nigerian Stocks began the first trading session on a slightly bearish note, amid soaring oil prices prevailing at the U.S trading session. At the time of writing this report, Brent crude was trading above $45/barrel.

  • That said, significant gains seen from NSE30 Stocks that include Nestle, Airtel, Dangote, BUACement couldn’t stop Nigerian stocks from closing slightly red, as sell-offs intensified among top brewery stocks and medium capitalized stocks.
  • Nairametrics envisage cautious buying, on the sentiments that recent price action shows further market correction in the near term, however, stock traders anticipate the bullish run is still in play for the long term.

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Market Views

Bank stocks remain a buy amid uncertainty prevailing Nigeria’s economy

The All-Share Index and Market Capitalization depreciated by 2.57% to close the week at 34,136.82 and N17.838 trillion respectively.

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Investors flee Nigerian Stocks as FDI and FPI dips

Nigerian Stocks ended the previous week cumulatively on a bearish note.

What we know: The All-Share Index and Market Capitalization depreciated by 2.57% to close the week at 34,136.82 and N17.838 trillion respectively.

In the previous week, Nigerian Stocks had its bullish run halted arbitrarily on the bias that stock traders and investors intensified their profit, taking into account the significant amount of weak earnings recorded by Nigerian Banks.

It was unsurprising to see four Nigerian banks in the top 10 losers chart for the week, as investors fretted on such performance on the basis that Nigeria’s banking industry remains the most vibrant after Agriculture, Energy in Africa’s largest economy.

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That said, In the coming week stock traders are expected to be very cautious amid recent macros showing Africa’s largest economy has dipped into a recession in Q3 as oil production dropped to a four-year low.

Abdul-Rasheed Oshoma Momoh, Head of Capital Market in TRW Stockbrokers Ltd, in a phone chat interview with Nairametrics, said Nigerian markets are presently playing out like a ping pong ball the momentum has slowed down for now.

More of consolidation now as investors buy into good stocks that have a light at the end of the tunnel. (Zenith Bank, UBA, GTBank, First Bank, Access Bank) taking into consideration he doesn’t see any new highs now till 2021.

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Bottom- line: Profit taking is expected to remain at least in the near term, taking into consideration Nigeria is officially in a recession, meaning a lot needs to be done to get Africa’s biggest economy on its foot, as such development could trigger more profit-taking in spite of the positive trend playing relatively at Africa’s best-performing equity market.

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