January 5, 2026/United Capital Update
Global Markets:
United States
In the United States (US), weekly jobless claims fell to around 214,000, indicating layoffs remain limited despite a cooling labour market. However, structural shifts hit some sectors with over 17,000 jobs lost in entertainment and media due to automation and changing revenue models. Despite this, Wall Street remained strong, with the S&P 500 and Dow Jones reaching near-record highs on optimism over a soft-landing and resilient corporate earnings.
Euro Area
In the Euro Area, the December flash Composite Purchasing Managers’ Index (PMI) eased to 51.9 points from 52.8 points in November. This signals slower growth as weaker services activity and ongoing manufacturing contraction weighed on momentum. However, European Central Bank (ECB)’s projections point to a gradual recovery, with Gross Domestic Product (GDP) growth forecast at about 1.2% in 2026 and inflation easing toward 2% target, supported by resilient labour markets and improving domestic demand.
Asia
Across Asia, economic conditions were mixed, with China showing renewed momentum as factory activity returned to expansion in December, supported by pre–Lunar New Year orders. President Xi Jinping reaffirmed confidence in meeting a near 5% growth target and signalled more proactive policy support in 2026, even as weak domestic demand and exports persist. Asian equity markets closed the year mixed, reflecting thin holiday trading and cautious investor sentiment.
Oil Markets
Oil prices fell last week due to renewed concerns over oversupply and soft global demand, as higher OPEC+ output expectations and weaker economic signals weighed on market sentiment.
Outlook:
This week, markets could remain cautious, balancing resilient US labour data and supportive policies against slowing growth and weak demand. US stocks may hold near highs, Europe may see modest moves on soft PMI data, and Asia might be mixed with China supported by policy but constrained by weak demand. Oil may remain pressured from oversupply, while metals like copper could see support from infrastructure demand.
Domestic Economy:
Improved Business Confidence
Business confidence improved strongly at the end of the year, as Nigeria’s Composite PMI rose to about 57.6 points in December from 56.7 points in November. This reading signals a clear expansion in private-sector activity, driven by stronger output, rising new orders, and improved momentum across both manufacturing and services, pointing to sustained economic activity.
Equity Market:
The Nigerian Exchange All Share Index (NGX-ASI) rose by 1.91% week on week (W/W), closing at 156,472.36 points. Market capitalisation stood at ₦99.94tn and year to date return stood at 0.55%.
Fixed Income and Money Market:
The fixed-income market traded the week as investors balanced improved system liquidity with cautious positioning. Yields across the Short-to-long-tenor Nigerian Treasury Bills yields’ fell on strong investor demand. The bond market was mixed, with yields on the 3-year and 7-year curve declining while the 5-year and 10 year yield had marginal gains. Open Repo Rate (OPR) and Overnight Rate (OVR) settled at 22.50% and 22.75% respectively. Open Market Operations (OMO) yield closed at 19.76% for the 188-day paper.
Outlook:
Equity Market
This week, the equity market is expected to remain positive but selective, supported by improving business confidence and strong momentum in consumer goods, banking, and insurance stocks. However, gains may moderate as investors take profits after recent advances and await fresh catalysts.
Fixed Income Market
The fixed-income market is likely to stay mixed, with treasury bill yields remaining under mild downward pressure due to strong demand and ample liquidity, while bond yields may continue to move sideways. Investor positioning will remain cautious, focusing on attractive tenors amid elevated money market rates.
