United States Stocks are trading in a narrow range Thursday after a fresh batch of economic reports showed the economy continues to slowly regain its strength.
The slightly positive reports on inflation, jobless claims and leading indicators are being tempered by fresh concerns about debt problems in Greece.
The reports continue to paint a picture that the domestic economy is slowly improving. Stocks have steadily edged higher over the past five weeks on similar news, even though the data hasn’t shown signs of strong growth.
“The market has been grinding higher on what has been benignly positive news,” said Alan Gayle, senior investment strategist for RidgeWorth Investments. “There is a growing sense the economy is plodding along in the right direction.”
In late morning trading, the Dow Jones Industrial average rose 17.31, or 0.2 percent, to 10,750.98. The Standard & Poor’s 500 index fell 1.49, or 0.1 percent, to 1,164.72, while the Nasdaq composite index fell 0.74, or less than 0.1 percent, to 2,388.35.
The Dow is looking to close higher for the eighth straight day.
The Labour Department said the Consumer Price Index was unchanged in February. Excluding volatile energy and food prices, the CPI rose 0.1 percent. Economists polled by Thomson Reuters, on average, forecast a rise of 0.1 percent in both figures.
The slow economic recovery and continued high unemployment have kept prices in check.
It was the second straight day the Labour Department reported tame inflation figures. On Wednesday the government reported that wholesale prices barely rose in February.
The Federal Reserve has said inflation is expected to remain low for quite some time. That will allow the central bank to keep interest rates low to help try and drive economic growth. Low rates are also favorable for stocks and other riskier investments like commodities.
Gains over the past couple of days came after the Fed said it would keep its federal funds rate near zero and noted the economy is showing more signs of improvement.
High unemployment is likely to be the biggest stumbling block for strong, sustained growth. The Fed isn’t expected to start hiking rates until job creation is consistent.
The Labour Department also said Thursday that initial jobless claims fell by 5,000 to a seasonally adjusted 457,000 last week. Economists were expecting claims to fall to 455,000.
Even though it came up just short of expectations, it was the third straight week of declines, which provide evidence that layoffs are slowing and employers could start hiring new workers soon.
Initial claims have hovered around the 450,000 mark in recent weeks, which Gayle called a “tipping point” between employers adding or cutting jobs.
In other reports, a gauge of future economic activity rose at its slowest pace in 11 months, indicating the economy isn’t expected to surge anytime soon. The Conference Board’s index of leading indicators rose 0.1 percent in February, matching analysts’ expectations.
Economic data has largely been falling in line with expectations in recent weeks, leaving little room for quick gains or losses on very upbeat or discouraging reports. Stocks have been grinding higher over the past five weeks, with the Dow up about 825 points during that time. The S&P 500 and Nasdaq both closed Wednesday at their highest levels since 2008.
Thursday’s economic reports are being offset somewhat by the latest worries in Greece. The country warned it might turn to the International Monetary Fund for support if European leaders can’t agree to a bailout plan next week.
Worries about Greece’s debt have weighed on the market off and on for nearly two months as the country tries to sort out billions of dollars in budgetary gaps. Overseas markets were mixed.
“That’s why you’re seeing a little bit of resistance,” Greg Merlino, president of Ameriway Financial Services, said about Greece. “Whenever we hear Greece, we get this knee-jerk reaction, is this the first domino to fall?”
There are concerns debt problems could spill over to other weak European countries like Spain and Portugal. The dollar rose against the euro and other currencies.
In corporate news, FedEx Corp. said its fiscal third-quarter profit more than doubled. It also raised its full-year earnings forecast, which brought it in line with analysts’ expectations.
FedEx is considered a bellwether for the economy because of the variety of products it ships. Despite the upbeat earnings report, shares fell 44 cents to $89.36.
About five stocks rose for every four that fell on the New York Stock Exchange, where volume came to 220.5 million shares, compared with 264.1 million traded at the same point Wednesday.
Bond prices were little changed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.65 percent from 3.64 percent late Wednesday.
Gold and oil both fell.
The Russell 2000 index of smaller companies fell 0.20, or less than 0.1 percent, to 683.78.
Overseas, Japan’s Nikkei stock average fell 1 percent. Britain’s FTSE 100 rose 0.1 percent, Germany’s DAX index rose 0.1 percent, and France’s CAC-40 gained 0.1 percent.
Senate Confirms Cardoso, 11 Others As Monetary Policy Committee Members
The Senate has confirmed the nomination of Olayemi Cardoso as the chairman of the Monetary Policy Committee of the Central Bank of Nigeria.
Also confirmed for appointment as members of the MPC yesterday, include, Muhammad Abdullahi, (CBN deputy governor), Bala Bello (CBN deputy governor), Emem Usoro (CBN deputy governor), Philip Ikeazor (CBN deputy governor), Lamido Yuguda, (DG Securities and Exchange Commission) and Jafiya Lydia Shehu, (Permanent Secretary, Ministry of Finance).
Others are Murtala Sabo Sagagi (CBN director) Aloysius Ordu, Aku Odukemelu, Mustapha Akinwunmi, and Bamidele Amoo.
President Bola Tinubu had on Wednesday named Cardoso as the chairman and 11 others as members of the MPC.
Tinubu in his letter of nomination to the Senate, said his action was in line with the provisions of Section 12 of the Central Bank of Nigeria Act 2007.
The President had about a week ago asked the Senate to confirm Cardoso, as the chairman of the Monetary Policy Committee of the apex bank.
CBN MPC will hold its first policy meeting for the year on February 26 and 27.
The Senate had , on Wednesday, screened the nominated members of the CBN Monetary Policy Committee, questioning them on the lingering foreign exchange and food crises.
‘Unemployment Rate Hit 0.8% In 2023 Q3’
The unemployment rate in Nigeria rose by 0.8percent in the third quarter of 2023.
According to the National Bureau of Statistics (NBS), this was a significant rise, adding that the unemployment rate rose from the 4.2percent recorded in Q2 2023 to 5.0 percent in Q3 2023.
The NBS, the custodian of official statistics in the country, disclosed this in a report it published last Monday titled “Nigeria Labour Force Survey Q3 2023”.
“The employment-to-population ratio was 75.6 percent in Q3 2023 with a decrease of 1.5 percent compared to a ratio of Q2 2023.
“The combined rate of unemployment and time-related underemployment as a share of the labour force population (LU2) increased to 17.3percent in Q3 2023 from 15.5percent in Q2 2023.
“About 87.3 percent of workers were self-employed in Q3 2023. The proportion of workers in Wage Employment in Q3 2023 was 12.7 percent.
“The unemployment rate increased significantly in Q3 2023 at 5.0 percent. This is an increase of 0.8 percent from Q2 2023.
“The rate of unemployment among persons with post-secondary education was 7.8 percent in Q3 2023”, the report stated in part.
It added that the unemployment rate for youth between the ages of 15 and 24 years was recorded at 8.6 per cent in Q3 2023 while the informal employment rate in Q3 2023 was 92.3 per cent.
The report added, “The unemployment rate in urban areas was 6.0 percent percentin Q3 2023, a slight increase of 0.1 percent from Q2 2023.
“Time-related underemployment in Q3 2023 was 12.3 percent, showing a slight increase of 0.5 percent from the rate recorded in Q2 2023. This shows an increase of 1.4 percent compared to the rate in Q4 2022.
“4.1percent of the working-age population was in subsistence agriculture in Q3 2023. Informal employment rate in Q3 2023 was 92.3percent, while Q2 2023 was 92.7percent.
“Percentage of youth Not in Employment, Education or Training was 13.7percent in Q3 2023”.
Recall that Nigeria’s inflation rate last Thursday climbed to 29.90 per cent in January 2024 from 28.92 per cent recorded in the previous month.
The 0.98 percent increase shows that the inflation rate in the country is yet to slow down.
The NBS revealed this in its ‘Consumer Price Index’
The development adds more pressure on the Central Bank’s monetary policy committee to sharply raise interest rates at a February 26-27 meeting its first in seven months.
Merchant Navy Lauds NIWA Over Staff Welfare
The Nigerian Merchant Navy Officers and Water Transport Senior Staff Association (NMNO/WTSSA) has expressed optimism that the Managing Director of National Inland Waterways Authority (NIWA), Mr. Bola Oyebamiji, will prioritise workers welfare for optimal performance of the agency.
Jibril Darda’u, General Manager, Corporate Affairs, NIWA, in a statement over the weekend, disclosed that the seafarers’ union’s remarks are one of the highlights of the meeting between the Trade Union Congress (TUC) affiliate group and management of the agency.
The statement quoted the Chairman of the NMNO/WTSSA, Comrade Suleiman Danjuma, as commending the Managing Director of NIWA for the good initiative of the kind of interaction that brings the staff closer to the management.
“This will definitely boost the morale of the staff and pledge their loyalty and confidence in the Managing Director’s leadership style”, Danjuma stated.
Earlier, the Managing Director of NIWA promised to build on the progress already achieved at the Lokoja River Port, Kogi State.
The MD disclosed this when he went on a familiarisation tour of NIWA’s facilities in Lokoja.
According to the MD, the importance of Lokoja River Port being in the confluence State is to boost the economic viability of the State and Nigeria at large.
“We are here for facility tour to see for ourselves what is on ground at Jamata Port, Lokoja. It is important we come here to assess the facilities to see, at least, how we can move the facilities forward”, he stated.
Recall that in continuation of his familiarisation tour, the Managing Director’s visited the NIWA Lokoja Area office to inspect the Dockyard facilities.
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