{"id":1842,"date":"2024-11-29T14:11:24","date_gmt":"2024-11-29T13:11:24","guid":{"rendered":"https:\/\/mainstreetcapltd.com\/?p=1842"},"modified":"2025-03-12T13:05:06","modified_gmt":"2025-03-12T12:05:06","slug":"trumps-election-and-economic-updates","status":"publish","type":"post","link":"https:\/\/mainstreetcapltd.com\/sandbox\/blog\/trumps-election-and-economic-updates\/","title":{"rendered":"TRUMP’S ELECTION AND ECONOMIC UPDATES"},"content":{"rendered":"\n


In this article, we have a range of updates from Donald Trump\u2019s victory in the 2024 U.S. Presidential election and its impact on global markets, to Nigeria\u2019s evolving budgetary concerns, fluctuations in oil prices, and the latest financial market developments.

Trump\u2019s Election: Making America Great Again?<\/strong>

On November 6th, Donald Trump won the 2024 U.S. Presidential election, defeating Kamala Harris in a politically charged race. US equities market indices like the S&P 500 and Dow Jones have trended higher since the elections as the nation responds to Trump\u2019s incoming economic policies.

We\u2019ve highlighted some important ones below.

Tariffs and Global Trade: The president-elect said that he would impose tariffs on goods from certain countries until Canada, Mexico and China halt the flow of drugs and migrants. Some of these tariffs include a 25% tariff on goods from Canada and Mexico and a 10% tariff on goods from China.

The tariffs would also have implications for American industries, including manufacturers, farmers and consumer goods companies. Mexico, China and Canada together account for more than a third of the goods and services (both imported and exported) by the United States, supporting millions of jobs.

While this is not a supported by all parties and stakeholders (consumers, business owners), Trump emphasizes an \u201cAmerica first\u201d stance for trade. We\u2019ll keep an eye on the situation.

Key Appointments & Economic Plans: Trump is breaking the mould with his cabinet picks. One thing that\u2019s clear is his sidestepping career politicians for what appears to be political outsiders, and this has Washington a little worried.

Trump nominated Scott Bessent, a former hedge fund manager, for U.S. Treasury Secretary. Some of Bessent\u2019s economic ideologies are in tandem with Trump\u2019s. The Treasury secretary nominee believes in reducing government deficit and deregulating industries to promote economic growth. The coming administration\u2019s focus on revitalizing the energy and financial sectors could have far-reaching effects.

What Else Happened in the United States

\u2022    US job growth slowed in October, and speculation is growing that the Federal Reserve may pause its aggressive rate cuts.

\u2022    The Fed\u2019s recent 25 basis point interest rate cut to 4.5% was largely expected, but it had little effect on dousing the strength of the dollar as the buzz from incoming administration\u2019s planned policy continues to bolster the DXY.

\u2022    The Fed rate cut is expected to be less aggressive following inflation data for October which printed 2.6%, higher than the 2.4% printed in September.

Oil Prices: Geopolitical Tensions, OPEC Forecast and Hurricanes<\/strong>

Crude oil has been on a rollercoaster ride recently, with price swings driven by geopolitical conflicts and the impacts of hurricane Helene. The recent ceasefire between Israel and Hezbollah has brought a sigh of relief to oil markets although supply concerns remain as the Trump\u2019s administration plans to increase production. 

Meanwhile, China\u2019s oil demand has slowed because of rising sales of new energy vehicles, economic deceleration due to a struggling real estate sector, and sluggish demand for Chinese exports.

The year has been marked by intense conflict between Israel and Hamas and Russia and Ukraine, which have kept oil prices volatile. On the other hand, OPEC is still holding back on production increases, but with tensions in the Middle East, OPEC expects global oil demand to rise by 1.82 million barrels per day in 2024, a slight drop from previous projections of 1.93 million barrels per day.

Moving on to other global economies. 

Below are recent and previous economic indicators such as interest rate, inflation rate, unemployment rate and gross domestic product for select countries.
 
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(*Eurozone is a union of 20 countries that the European Union has adopted the Euro as their currency.)<\/em>

Global Economic Changes: Europe, Asia & Africa<\/strong>

The eurozone faces increasing pressure as trade relations with the US worsen, and economic conditions continue to slide. The euro has fallen against the dollar, and approaches parity. In the global economy, while interest rate cut was the policy used by Central Banks to tame high level of inflation, rate decisions in coming months may be hawkish. <\/p>\n\n\n\n


In Africa, the Economic Community of West African States (ECOWAS) has introduced the digitalized ECOWAS electronic Certificate of Origin to streamline trade across the continent, supporting the goals of the African Continental Free Trade Agreement.

Chevron, a global oil and gas corporation, is focusing more on West Africa, including Nigeria and Angola, in anticipation of a production increase in these oil-rich nations. The global oil company is the supplier for Dangote refinery\u2019s resumed imports from the US.

In Asia, China\u2019s services sector picked up a bit thanks to a major stimulus push. Economic growth projections are still lower than the initial 5% target, and stimulus packages focus more on restructuring government debt than bolstering manufacturing and real estate.

Industrial profits continue to decline, signaling that recovery is still fragile. Meanwhile a 10% drop in China\u2019s industrial profits is a reminder that the road to recovery will be slow and bumpy.

Let\u2019s move on to Nigeria.

Nigeria\u2019s Budget and Financial Concerns<\/strong>

The 2025 budget is pegged at a staggering \u20a647.9 trillion. Due to the naira\u2019s devaluation, that\u2019s roughly $27.96 billion, down nearly 18% from the previous year. As oil prices fluctuate. This month, the Senate approved a $2.2 billion external borrowing plan to address a significant budget deficit.\u00a0

In a positive turn, local crude oil production increased to 1.43 million barrels per day in October, though still short of its OPEC target. Also, the Port Harcourt refinery resumed operations in November as the FG tries to revamp refineries. Since oil exports are a major source of revenue, these developments could translate to increased earnings for the country.

Equities Market: Mixed-to-Bearish Sentiments\u00a0<\/strong>

The equities market has fluctuated around the current support level at 97,000 points as investors show mixed sentiments in the short term. The market index started November on a decline and while the index trades slightly higher, investors are still cautious despite boosts from the banking and insurance sectors.

The market showed signs of turbulence, with earnings reports highlighting the increasing cost of operation for companies in the consumer goods sector. On the other hand, banks reported large profits as high interest rates boost interest income.

Meanwhile, Access Bank made a strategic acquisition of a majority stake in Afrasia Bank and completed its acquisition of Standard Chartered branched in Angola and Sierra Leone, marking a significant expansion.\u00a0

Speaking of banks\u2019 expansion, Zenith Bank Plc opened a Zenith Bank (UK) branch in Paris,\u00a0United Bank for Africa signed a deal with the French Government to commence full banking operations in France and First Bank of Nigeria Plc plans to expand its operations in China to include Guangdong and Shanghai, in addition to its current presence in Beijing.\u00a0Seems Nigerian banks want to take over the world.

The stock market\u2019s positive performance in January 2024 (up 35.28% m\/m) is the largest monthly gain in 2024, as bullish investor sentiment from the last month of 2023 continued in early 2024.
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Top Stock Price Gainers in November 2024
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(*The above represents data\u00a0at the end of equities trading on November 28, 2024)<\/em>

Interest Rates and Central Bank of Nigeria Updates<\/strong>

The Central Bank of Nigeria (CBN) continues to adjust its policies. The 25bps hike in the Monetary Policy Rate (MPR) to 27.50% signals a tightening stance. CBN also rolled out new forex trading systems, aiming at market efficiency.

Additionally, CBN initiated a bold strategy to streamline its foreign exchange market by introducing the Bloomberg BMatch system, set to be launched in December 2024. CBN also sent $100,000 at the minimum for banks to trade FX. Though the Apex bank\u2019s monetary policy stance was the hike rate this year, it did not address the rising inflation it was intended to. Recent data for inflation places it at 33.88%, as food costs and transport costs exert pressure on consumers.
\u00a0
Nigeria\u2019s Economy: An Uneven Growth\u00a0<\/strong>

The economy grew by 3.46% in the third quarter of 2024, higher than the 3.19% growth recorded in the second quarter. However, a closer look at the numbers tells a story of uneven growth, with significant variations between sectors, highlighting both resilience and vulnerability in the Nigerian economy.

The oil sector, a key source of revenue for the country, faced a setback in the third quarter of 2024. Its growth slowed yet it represents a significant improvement over the same period in 2023. Its contribution to the overall Gross Domestic Product was lower than in the previous quarter.\u00a0

The Agricultural sector is pertinent as individuals require necessities which include food. Contributions of the agricultural sector to the GDP improved, largely due to the growth in the livestock subsector, which has seen steady expansion, particularly in the latter half of the year. The increased demand for livestock ahead of the festive season could drive further growth in the coming months.

Agriculture continues to grapple with persistent insecurity and flooding, which has disrupted crop production. Businesses in the Trade sector are similarly burdened with foreign exchange liquidity issues and rising local prices eroding margins. The combination of these factors has dampened the sector\u2019s growth potential, despite Nigeria\u2019s continued reliance on agricultural exports.

On the other hand, the services sector now accounts for more than half of Nigeria\u2019s GDP (53.58%) as at Q3-2024, though this is down slightly from 58.76% in Q2-2024. The sector\u2019s dynamism contrasts with the challenges facing other parts of the economy, particularly agriculture and trade.

The recent GDP growth data paints a picture of an economy that is growing, but in an uneven manner. While there\u2019s growth in the non-oil sector, this expansion is far from uniform. Some sectors, particularly finance, have benefited from favourable economic conditions such as higher interest rates and inflation, while others, like agriculture, are facing the brunt of rising raw material costs and higher loan rates.

Reader\u2019s Corner<\/strong><\/p>\n\n\n\n


\u201cIf months had personalities, November would be that friend who always brings snacks.\u201d
November is that crucial prelude to the year-end sprint. The holidays are approaching, but there\u2019s still time to seize those gains.

Have you positioned yourself for the final stretch? Remember, as Robert Kiyosaki wisely put it, \u201cIt\u2019s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.\u201d

The Nigerian economy faces a delicate balancing act. While the financial services sector is poised to continue its strong performance, the agriculture and trade sectors will need to navigate the ongoing challenges of insecurity, inflation, and foreign exchange liquidity issues.

That\u2019s all folks! Stay diversified with effective investment strategies because the market never sleeps. Until next time, happy investing!
\u201cAlexa, play\u2026 \u266b Its beginning to look a lot like Christmas\u2026 \u266b \u201c<\/p>\n\n\n\n

To Stay tuned for more updates; follow Mainstreet Capital<\/a> on social media ( LinkedIn <\/a>| X<\/a>  | Instagram<\/a> | Facebook<\/a> )  and fill this form <\/a>to subscribe to our newsletter. Remember, the more you learn, the better equipped you\u2019ll be to make sound investment decisions.<\/em><\/p>\n\n\n\n

Until next time, happy Investing!<\/em><\/p>\n\n\n","protected":false},"excerpt":{"rendered":"

In this article, we have a range of updates from Donald Trump\u2019s victory in the 2024 U.S. Presidential election and its impact on global markets, to Nigeria\u2019s evolving budgetary concerns, fluctuations in oil prices, and the latest financial market developments. Trump\u2019s Election: Making America Great Again? On November 6th, Donald Trump won the 2024 U.S. […]<\/p>\n","protected":false},"author":14,"featured_media":1843,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1842","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"builder_content":"","_links":{"self":[{"href":"https:\/\/mainstreetcapltd.com\/sandbox\/wp-json\/wp\/v2\/posts\/1842"}],"collection":[{"href":"https:\/\/mainstreetcapltd.com\/sandbox\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mainstreetcapltd.com\/sandbox\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mainstreetcapltd.com\/sandbox\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/mainstreetcapltd.com\/sandbox\/wp-json\/wp\/v2\/comments?post=1842"}],"version-history":[{"count":9,"href":"https:\/\/mainstreetcapltd.com\/sandbox\/wp-json\/wp\/v2\/posts\/1842\/revisions"}],"predecessor-version":[{"id":1858,"href":"https:\/\/mainstreetcapltd.com\/sandbox\/wp-json\/wp\/v2\/posts\/1842\/revisions\/1858"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mainstreetcapltd.com\/sandbox\/wp-json\/wp\/v2\/media\/1843"}],"wp:attachment":[{"href":"https:\/\/mainstreetcapltd.com\/sandbox\/wp-json\/wp\/v2\/media?parent=1842"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mainstreetcapltd.com\/sandbox\/wp-json\/wp\/v2\/categories?post=1842"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mainstreetcapltd.com\/sandbox\/wp-json\/wp\/v2\/tags?post=1842"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}