Last week, American companies reported profits that blew past expectations. South African factories posted their strongest output in nearly four years. And Nigeria’s stock market kept climbing, even as banking stocks got hammered. Everything looks green across the board, but what do the insights reveal?
Let’s get into the details.
Global Economy
US: Strong Earnings Meet Labor Market Cracks
US equity markets rallied during the period, supported by strong corporate earnings. As of May 7th, nearly 85% of companies in the S&P 500 had reported quarterly results. Most surpassed consensus estimates, delivering an average earnings surprise of about 19%. A 19% average earnings surprise is exceptional. It means companies aren’t just beating expectations a little. They’re crushing them by amounts that suggest either analysts were too conservative or business conditions improved faster than forecasts captured.
The information technology sector led gains, driven by optimism around artificial intelligence infrastructure and demand. AI spending continues to justify itself through actual revenue and earnings rather than just promises of future potential. When tech companies report strong results while simultaneously investing billions in AI infrastructure, it validates the investment cycle and encourages more capital deployment. Energy and utilities sectors lagged, which makes sense given oil price volatility and the capital-intensive nature of utility operations during periods of regulatory uncertainty.
Labor market data reflected both resilience and emerging weaknesses. Initial jobless claims rose slightly to 200,000 but remained below expectations. Continuing claims fell to their lowest level since 2024. Translation? People who lose jobs are finding new ones relatively quickly. But nonfarm payrolls increased by just 115,000 in April, exceeding forecasts but still representing modest job creation for an economy of this size. Healthcare, transportation, warehousing, and retail drove the gains.
The unemployment rate held steady at 4.3%, although labor force participation declined to its lowest level since October 2021. This indicates that people are leaving the workforce entirely rather than finding jobs. They’re not counted as unemployed because they’ve stopped looking. That can reflect discouragement, early retirement, or structural changes that make certain workers less employable. None of those interpretations is positive for long-term economic health.
Layoffs increased month over month, particularly in the technology sector. Many firms explicitly attributed workforce reductions to artificial intelligence-driven restructuring. This is different from typical recession layoffs. Companies aren’t cutting people because demand is weak or revenues are falling. They’re eliminating positions because AI can now perform tasks that previously required human workers. Labor productivity growth also slowed in the first quarter, though annual productivity gains remained relatively strong. The productivity slowdown seems counterintuitive if AI is eliminating jobs. It might reflect a transition period in which companies are still learning to deploy AI effectively.
Europe: ECB Signals More Hikes Despite Growth Concerns
Comments from ECB Governing Council member Joachim Nagel strengthened expectations that the European Central Bank may raise interest rates again at its upcoming policy meeting. Nagel emphasized that the ECB must remain prepared to tighten monetary policy further unless there’s a substantial and sustained improvement in the inflation outlook.
The hawkish stance reflects continued focus on restoring price stability despite concerns about slowing economic growth. This is the classic central bank dilemma. Growth is weakening, which normally argues for easier policy. But inflation remains elevated, which demands tighter policy. The ECB is choosing price stability over growth support, which is the right long-term call but painful in the near term for businesses and consumers facing higher borrowing costs during an economic slowdown.
Supporting this cautious stance, eurozone producer price inflation accelerated significantly in March, according to Eurostat data. Producer prices rose 3.4% month-over-month and 2.1% year-over-year, marking the sharpest monthly increase since August 2022. The increase was primarily driven by higher energy prices, underscoring persistent cost pressures within the region and the risk of inflation remaining elevated longer than expected.
If the ECB hikes while the Fed holds or cuts, the euro strengthens against the dollar. That shifts global capital flows and can affect emerging-market currencies, including the naira. For Nigerian investors with European exposure, tighter monetary policy also means higher borrowing costs for eurozone companies, which could squeeze corporate margins.
Sub-Saharan African Economies
African Eurobonds showed mixed performance, with Nigerian papers strengthening while others were more volatile. The divergence continues, highlighting country-specific factors driving investor decisions. Markets are differentiating between African sovereigns based on fiscal positions, policy credibility, and exposure to various risks rather than treating the continent as a single bloc.
South Africa: Strongest Expansion Despite Supply Chain Chaos
The S&P Global South Africa PMI rose to 51.6 in April 2026 from 50.8 in March, marking the strongest expansion in business activity since August 2022. South Africa is growing but not explosively. The improvement was driven by stronger output growth, which reached an 11-month high, supported by a recovery in sales and the fastest increase in new orders in more than one and a half years.
According to survey respondents, part of the increase in demand was linked to precautionary stock building amid concerns about the Middle East conflict. This is an important context. When businesses build inventory because they’re worried about future supply disruptions, it creates artificial demand that can reverse quickly. If the conflict de-escalates and supply concerns ease, companies will stop ordering and work through existing inventory. That creates a demand cliff that shows up in future PMI readings.
Employment growth also strengthened during the month, reaching its highest level since September 2022. But it was not all good news. Supply chain conditions further deteriorated as geopolitical disruptions lengthened supplier delivery times. Lead times increased to the greatest extent in over one and a half years.
This constrains how much businesses can actually produce, even if demand is strong. You can have orders and willing customers, but if you can’t get the inputs, you need to make products and growth stalls. Cost pressures intensified sharply as input cost inflation surged to a 30-month high, driven by higher fuel prices and rising supplier charges. In response, firms increased output prices at the fastest pace since August 2024.
Despite the stronger activity levels, businesses remained cautious about the outlook, citing persistent geopolitical uncertainty and elevated cost pressures as risks to sustaining recent gains.
A PMI above 50, coupled with rising employment, is positive for South African equities. But input cost inflation at a 30-month high means the South African Reserve Bank may keep rates higher for longer. If you hold rand-denominated bonds or South African stocks, watch for rate decisions in the coming months.
Domestic Economy
Major Updates During the Week
1. Dangote Cement PLC Eyes London Listing
Dangote Cement Plc announced plans for a secondary listing on the London Stock Exchange. Secondary listings allow companies to trade shares on multiple exchanges simultaneously. Dangote Cement will remain primarily listed in Nigeria while also making shares available to UK and international investors through London. The move aims to increase the company’s visibility among global investors, improve liquidity, and potentially attract capital that currently doesn’t have access to Nigerian markets.
For Nigerian investors, a London listing has mixed implications. On the one hand, it validates Dangote Cement’s compliance with international disclosure and governance standards, which is positive. Increased international investor interest could support the stock price. On the other hand, it creates an alternative trading venue that might draw liquidity away from the Nigerian exchange. Large institutional investors might prefer trading in London due to deeper markets, better infrastructure, or regulatory familiarity. That could make the Nigerian listing less liquid over time.
The timing is notable. Dangote Cement is pursuing international listing access while oil prices remain elevated, and Nigeria’s fiscal position has improved. Companies typically enter international markets when they’re strong and can command attractive valuations, rather than when they’re desperate for capital. This suggests confidence in the company’s story and belief that international investors will value the business appropriately.
2. NNPC Signs Refinery Deals with Chinese Firms
NNPC Ltd signed a memorandum of understanding with two Chinese companies to rehabilitate and operate the Port Harcourt and Warri refineries. An MoU is a preliminary agreement that outlines intentions and a framework for cooperation. It’s not legally binding and doesn’t guarantee a final contract will be signed. But it signals serious negotiations are underway and both parties have agreed on broad terms. The Chinese companies will apparently handle rehabilitation work and potentially ongoing operations.
If this translates into actual production, Nigeria’s fuel import bill could drop significantly. That would ease pressure on foreign exchange reserves and potentially support the naira.
Nigeria’s refineries have been non-functional or operating far below capacity for years despite repeated promises of rehabilitation and restart. The country imports most refined petroleum products despite being a major crude oil producer. This creates massive foreign exchange pressure and dependence on international refining capacity. Getting the Port Harcourt and Warri refineries operational would reduce import dependence, ease forex pressure, and potentially lower domestic fuel prices if products are sold locally rather than exported.
Equity Market: Banks Crash While Industrials Soar
The Nigerian equities market closed the week on a positive note. The NGX All-Share Index gained 1.02% week-over-week to close at 244,670.65 points from 239,734.61 points in the previous week, bringing the year-to-date return to 56.71%. Market capitalization settled at ₦157.03 trillion.
But the week’s overall gain masked dramatic divergence beneath the surface. UBA fell 27.27%. Access Corporation dropped 24.60%. FCMB declined 9.88%. Zenith Bank slipped 7.28%. Guinness crashed 18.99%. These are major, established companies. When they’re all selling off simultaneously and sharply, it indicates sector-specific concerns rather than company-specific issues.
Investors traded 1.07 billion shares valued at ₦55.04 billion across 69,996 deals. Meanwhile, industrial and consumer goods stocks rallied violently. ZICHIS surged 113.85%. CAP jumped 97.22%. RTBRISCOE climbed 66.30%. FTNCOCOA gained 66%. TIP rose 56.09%.
Gains in heavyweight counters such as BUACEMENT (+27.73%), DANGCEM (+22.25%), AIRTELAFRI (+21.00%), and PRESCO (+16.16%) further supported the bullish sentiment. However, losses in ACCESSCORP (-24.60%), UBA (-27.27%), FCMB (-9.88%), ZENITHBANK (-7.28%), and GUINNESS (-18.99%) moderated overall market performance.
Overall, investor sentiment remained positive, supported by sustained interest in industrial, consumer goods, and insurance counters.
Fixed Income Market: Yields Edge Higher on Strong Auction Demand
The Debt Management Office recorded strong demand at the May 6, 2026, Treasury Bills auction, particularly for the 364-day instrument, which attracted ₦2.23 trillion in subscriptions against a ₦550 billion offer. That’s more than four times oversubscribed.
At the close of the auction, the DMO allotted ₦731.74 billion across the 91-day, 182-day, and 364-day tenors, with stop rates settling at 15.95%, 16.14%, and 16.15%, respectively.
Strong bids at relatively higher rates lifted the secondary market average yield by 1 basis point to 17.51%, signaling a bearish tone. Here’s the disconnect. Auction demand was massive, which you’d expect to push rates down as buyers compete. Instead, yields rose slightly. This happens when the DMO accepts higher rates despite strong demand, maintaining pricing discipline rather than letting yields fall just because buyers are eager. It preserves fiscal sustainability by avoiding the lock-in of artificially low borrowing costs.
A similar trend was observed in the bond market, where average yields rose by 1 basis point week over week amid mild selling pressure on short-term instruments. Short-end yields increased 11 basis points to 18.02%.
In the Eurobond market, Nigeria’s sovereign papers strengthened significantly. Yields declined 15 basis points week-over-week to 6.71% as a slight moderation was priced into geopolitical tensions.
The Bottom Line
Last week’s market action showed something investors are becoming increasingly familiar with: optimism and caution can exist at the same time.
Global investors are buying into growth stories tied to AI and strong earnings, even while layoffs and inflation concerns linger beneath the surface. In Nigeria, the appetite for yield remains strong, whether through Treasury bills or selective equity plays.
The result is a market environment where money is still moving aggressively, but far more selectively than before. For investors, that makes one thing especially important right now: paying attention to where confidence is flowing and where it is quietly fading.
