Wall Street Braces for New Phase of Trade War
As the trade war between the U.S. and China enters a new phase, investors have become guarded. U.S. stocks closed mostly lower on Monday as the new tariffs from both sides kick in.
The Dow Jones Industrial Average fell by triple digits after its record close last Friday. The blue-chip benchmark lost 181.45 points (-0.68%) to end at 26,562.05. The S&P 500 Index shed 10.31 points (-0.35%) to finish at 2,919.37. Only the Nasdaq Composite Index gained at the start of the trading week. The tech-heavy index advanced 6.29 points (+0.08%) to inch higher and close at 7,993.25.
Last week, Wall Street has taken the trade tensions in stride with investors focusing on strong economic data and corporate fundamentals. This week, the Federal Reserve is expected to raise interest rate at the conclusion of their two-day monetary policy meeting which begins today. The announcement would be made on Wednesday.
Bullish Rating Boost AMD Shares
Advanced Micro Devices Inc. (AMD) halts its five-day losing streak on Monday, rising 5.13% to $32.61. RBC Capital Markets’s bullish rating breathed new life to AMD. They joined the group of analysts who have an optimistic view. RBC Capital sees the server business to grow as demand for gaming products is increasing.
AMD is coming from a rocky past and has been struggling recently to compete against Intel Corp. (INTC). AMD is moving to capture a more sizable piece of the server market. The company could grow to mid-single-digit share and eventually end up with more than 20% share.
Top Executives & Co-Founders of Instagram Quits
In a surprise move, Kevin Systrom and Mike Krieger, co-founders of Instagram, have resigned as chief executive officer and chief technical officer of the photo-sharing app owned by Facebook Inc. (FB) on Monday.
No explanation was given except for Systrom’s blog post which said that he and Krieger planned to take time off and explore “our curiosity and creativity again”. Their departures follow the recent exit of Facebook’s WhatsApp co-founder Jan Koum.
Facebook is now left without the developers behind two of its biggest services. Instagram is FB’s fastest-growing revenue generator. The resignations come at a time when the social network’s core platform is under fire regarding customer data protection and the spread of false information.
But Bloomberg reported that the disagreements with Facebook CEO Mark Zuckerberg over the direction of Instagram could be the reason for the twin resignations.
Tesla to Build its Own Car Carriers
With vehicle distribution problems emerging, Tesla Inc. (TSLA) sees the need to upgrade its logistics system. In order to arrest the shortage of car carrier trailers, CEO Elon Musk said, “Started building our own car carriers this weekend to alleviate load.”
The electric maker’s chief tweeted on Monday the company is running into an “extreme” shortage of said carriers. He was responding to a customer who placed an order for a Model 3 All-Wheel Drive (AWD) in June. The client has yet to receive the car. TSLA slid -0.19% on Monday to $299.68. The stock is down -3.75% year-to-date.
Michael Kors Acquiring Versace
According to a Bloomberg report, Michael Kors (KORS) is nearing a deal to acquire Versace for around $2 billion. The U.S. handbag maker is likely to announce their purchase of the Italian fashion house this week. Meanwhile, the shares of Michael Kors fell -8.23% on Monday. KORS is up +5.97% year-to-date.