US markets fell away overnight as the post Labour Day effects were kicking in with all the major indexes finishing the trading session lower. Uncertainty lingered among investors regarding the possibility of a global trade war and increasing tensions between some of the most dominant economies as last week a report suggested that the US administration was on standby to inflict additional tariffs on $200 billion worth of Chinese goods as soon as this week.
Positive manufacturing PMI data was released and rose to 61.3 in August from 58.1 in July, beating market expectations of a fall to 57.7 but the news wasn’t enough the lift stocks. Weighing on the indexes were Facebook and Nike shares falling 2.60% and 3.16% respectively. Facebook shares fell after broker MoffettNathanson downgraded the social media company, warning of revenue growth deceleration whilst Nike shares fell away as the company faced a backlash after it chose Colin Kaepernick, the first NFL player to kneel during the national anthem as a protest against racism, to participate in a new ad campaign.
Some movers overnight included Tesla shares falling 4.21% after Goldman Sachs resumed coverage on the stocks with a sell rating predicting a lower share of the electric car market with the stock to fall 30% in the next 6 months as a result of this increased competition. Shares of Western Digital fell 4.7 percent and Seagate Technology shares dropped 7.7 percent after Evercore ISI downgraded shares of the hard-disk drive makers.
In after-market trading Restoration Hardware shares fell another 4 percent after rising as much as 6.5 percent, following closing down 4.86 percent for the session after reporting earnings. The company missed on revenue estimates by $20 million however beat estimates by 74 cents reporting earnings of $2.49 per share against the expected $1.75 per share.
In emerging markets, the Argentinian Government asked the International Monetary Fund (IMF) for an early release of funds from the nation’s $50 billion standby financing deal last week. The peso is down more than 45 percent against the US dollar after the country’s weakening economy and inflation rate at 25.4 percent. The US dollar rose 0.4 percent to 95.48 against a basket of currencies and the iShares MSCI Emerging Markets exchange-traded fund (EEM) dropped 2 percent.
Yesterday in Australia the Reserve Bank of Australia kept the cash rate unchained on hold at 1.5%, a rate which has been on hold for 25 months. The Australian dollar rallied on the announcement from 0.7190 to 0.7235, however has recently turned lower back to 0.7182. Today at 11:30am local GDP data for the second quarter year on year is expected to come in at 2.9% down from the previous quarter 3.1% and for the quarter down 0.7% from 1.0%.
Chart of the Day: Advanced Micro Devices (AMD) Daily chart