Select a category

While market participants are anything but certain about the specifics of the Federal Reserve's decision on interest rates rate tomorrow, there is one thing they know for sure: rates are about to come down. 

That conviction has boosted small-cap stocks in recent days. The Russell 2000 index was up for the fifth consecutive session on Tuesday. The small-cap benchmark has risen more than 5% in those five days, putting it ahead of the large-cap S&P 500, which has advanced about 2.5%.

Small caps' outperformance comes as investors await the Federal Reserve's first interest rate cut in more than four years. The cut, due Wednesday, is expected to be the first in a series of reductions that Wall Street thinks will lower the benchmark federal funds rate by at least a full percentage point before the end of the year.  

Rate cuts are broadly supportive of stocks, as long as the economy isn’t in a recession. Small-cap stocks are thought to benefit more than their large-cap peers from monetary policy easing because they’re more likely to hold floating-rate debt. That assumption underpinned the small-cap rally that propelled the Russell 2000 more than 10% higher in July, its best month all year. 

However, as analysts at Oxford Economics recently noted, small-cap performance has been mixed after previous interest rate cuts. At best, rate cuts have helped to moderate small caps’ underperformance relative to large caps in the late stages of tightening cycles. 

Though, they say, this time could be different. Oxford expects small caps to be “outsized beneficiaries of the upcoming rate cuts…due to their relatively weak balance sheets.” Lower borrowing costs, easier financial conditions, and resilient consumer and business spending, they said, should alleviate some of small caps’ balance sheet pressure.

Others, however, advocate caution. Bank of America (BofA) on Monday said its "Regime Indicator," a measure of market sentiment, declined for a second consecutive month in August, indicating a general risk aversion in markets. Small-cap stocks, due to their sensitivity to economic conditions and typically weaker balance sheets, are often riskier investments than comparable large caps.

Quarterly earnings are also, according to BofA analysts, an overhang for small caps. The small-cap S&P 600, they note, may have exceeded second-quarter earnings expectations, but the group’s aggregate profits still declined 10% from a year ago. Total sales also missed estimates and the outlook for the remainder of the year was bleaker than previously forecast. That, they said, could limit near-term upside from this week’s rate cut. 

BofA analysts instead recommended mid-cap stocks as a near-term hedge against market weakness. Mid caps, they said, offered better second-half earnings guidance than small caps, and tend to outperform small and large caps in the year after rate cuts.

Analysts at Goldman Sachs were similarly bullish on mid caps in a note last week. The group offered investors, they wrote, "superior earnings growth at a reasonable price compared with large-caps," and stronger income statements and balance sheets than small caps.

Read more on Investopedia

The Bauchi State Police Command has arrested a dismissed soldier, Aliyu Adamu, for defrauding three applicants of N200,000 under the guise of helping them secure jobs in the Nigerian Army.

The command’s spokesperson, SP Ahmed Muhammed Wakil, disclosed this in a statement on Tuesday, September 17, 2024.

“Operatives attached to ‘B’ Divisional Police Headquarters has taken a significant step in apprehending an individual involved in fraudulent activities. L/Cpl Aliyu Adamu from Obi Local Government Area of Nasarawa State has been arrested on charges of impersonation, cheating, criminal misappropriation, and criminal breach of trust.

This arrest follows complaints from three individuals who reported that L/Cpl Aliyu Adamu collected a total sum of two hundred thousand naira from them, promising to secure jobs for them in the Nigerian Army.

However, they were not invited to the Nigerian Army depot for training as promised. The suspect admitted to having been dismissed as a Lance Corporal from the Nigerian Army a few months ago for being absent without official leave for a year. Furthermore, he confessed to using the money collected from the victims for personal purposes,” the statement reads in part. #Instablog9jaNews #Information #Awareness #StayUpdated

Continue reading on Instablog

Instagram is launching "Teen Accounts," designed to provide additional privacy for users under 18.

The Meta Platforms (META) social media app's new built-in protections for teen users include limits on who can contact them and the type of content they can see. Teens younger than 16 will need a parent's permission to change any of the included settings, the company said Tuesday. 

Users currently must verify that they are at least 13 to create an Instagram account.

Instagram Teen Accounts automatically will be set to private, meaning teen users will have to manually accept any new followers. The accounts also will be subject to the strictest messaging settings, meaning only people "they follow or are already connected to" can message them. Teens can also "only be tagged or mentioned by people they follow," Instagram said.

Additionally, Teen Accounts will receive reminder notifications to leave the app after an hour each day and sleep mode—which mutes notifications and sends auto-replies to direct messages—will be enabled between 10 p.m. and 7 a.m. daily. 

Teens who create accounts now will be subject to the new restrictions, with existing accounts converted within 60 days in the U.S., U.K., Canada, and Australia, and in the European Union (EU) "later this year." Beyond those countries, Teen Accounts will go into effect in January.

Last October, a coalition of 33 states sued the tech giant, alleging Meta's social media platforms harm children and teenagers and accentuate a national mental health crisis.

The plaintiffs accused Meta of targeting children and teenagers with addictive and manipulative features to keep them engaged on its apps to maximize advertising revenue and profits.

Last month, the reported that Meta and Alphabet's Google had a "secret deal" to target Instagram advertisements to teenagers on YouTube.

Meta shares edged higher to $534.88 Tuesday afternoon. Shares are up about 50% this year.

Read more on Investopedia

Nigerian journalist Jimi Disu has lamented the economic hardship plaguing the nation.

Speaking on Nigeria Info FM, he said: “Nigeria has never been this bad. Just this morning, I was talking to an ordinary person, and she told me that in her home, they’ve resorted to one meal a day. Even during the war, it wasn’t this bad in this part of town.

To cut a long story short, I’m going to be spending about N120,000 on electricity for an apartment, and I live alone. Not only do I live alone, I also have two homes: a day home and a weekend home. It’s the weekend home I’m talking about.

In my estate, the minimum amount one can spend on electricity is N50,000. I said Nigeria has never been this bad. If you’re not careful, you’ll sell a house only to use the money to clear some debts and have just a little left to buy something for the house.

The dilemma now is that you can’t save because the Naira has no value.”

#Instablog9jaNews #Information #Awareness #StayUpdated

Continue reading on Instablog

The Central Bank of Nigeria (CBN) says the country’s foreign exchange reserves are at risk due to the petrol subsidy removal, lower crude oil earnings, increased external debt servicing obligations and rising import bills.

CBN disclosed this in its Monetary, Credit, Foreign Trade and Exchange Policy guidelines for fiscal years 2024/2025 released on Tuesday, September 17.

However, the apex bank projected an overall positive economic growth for the period based on continued policy support to the agriculture and oil sectors, reforms in the foreign exchange market, and the effective implementation of the Finance Act 2023 and the 2022-2025 Medium-Term National Development Plan (MTNDP).

According to the apex bank, “The outlook for Nigeria’s external sector in 2024/2025 is optimistic, with expectations of favorable terms of trade due to a sustained rally in crude oil prices and an improvement in domestic crude oil production.

The positive outlook is supported by the continued high crude oil prices, driven by production cuts, as well as gains from capital flows and remittances.

However, lower crude oil earnings, the removal of fuel subsidies, rising import bills, and increased external debt servicing obligations could pose downside risks to the accumulation of external reserves. [SWIPE]

#Instablog9jaNews #Information #Awareness #StayUpdated

Continue reading on Instablog

American rapper Sean Love Combs, better known as Diddy, will remain in custody pending his trial after a New York federal judge denied his $50 million bail proposal on Tuesday, September 17, 2024.

The judge remanded the musician in custody after prosecutors argued he was a “serious flight risk”.

The 54-year-old music mogul was arrested on Monday evening over alleged racketeering conspiracy, s+x tr@fficking, among others. He pleaded not guilty to all charges.

CNN reports Combs will appeal the decision to hold him without bail in front of US District Court Judge Andrew Carter on Wednesday afternoon. If the appeal is denied, Combs will be remanded back to the detention center.

📷: @gettyimages

#Instablog9jaNews #Information #Awareness #StayUpdated

Continue reading on Instablog