Dow 27,000; Trump vs. Libra; Daimler warning

1. Dow 27,000: The Dow and the S&P 500 have hit all-time highs. But pockets of anxiety remain.

The Dow on Thursday topped 27,000 points for the first time, while the S&P 500 closed just shy of 3,000 points. Both indexes were driven higher by congressional testimony from Federal Reserve Chair Jerome Powell, who fueled investor optimism that an interest rate cut is coming later this month.

The Nasdaq, meanwhile, closed 0.1% lower. Gains in global markets on Friday have been tepid.

“US-China trade tensions continue to loom over global sentiment,” Han Tan, market analyst at FXTM, said in a note. Chinese export growth turned negative in June, according to data released Friday, and imports plunged by more than expected.

Hong Kong’s Hang Seng finished up 0.1%, while the Shanghai Composite rose 0.4%. Japan’s Nikkei rose 0.2%. Britain’s FTSE 100 jumped 0.3% in early trading, while Germany’s DAX was slightly lower.

US stocks are poised to continue their rally. The Dow could rise 70 points, or 0.3%, when markets open, while the S&P and Nasdaq are set to increase 0.2%.

2. Trump vs. Libra: The price of Bitcoin has been more volatile than ever in the past few weeks, surging to nearly $14,000 in late June before plunging all the way back to about $9,600 on July 2. The price of one bitcoin now sits around $11,600.

One explanation? Concerns about regulation as Facebook prepares to launch its Libra cryptocurrency.

Facebook’s plans on Thursday drew the attention of President Donald Trump, who tweeted that he is “not a fan of Bitcoin and other Cryptocurrencies, which are not money.” The tech company will need to seek a charter if it wants “to become a bank,” he added.

“We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable,” Trump said, referring to the US dollar.

Trump’s ire could heighten attention on hearings in Congress next week. Facebook executive David Marcus, who heads up the project, is scheduled to testify.

3. Daimler warning: The owner of Mercedes-Benz has warned of a major slump in profits this year after recalls, legal issues and weak demand for new cars contributed to a rough second quarter.

Daimler said Friday that it expects a second quarter loss of €1.6 billion ($1.8 billion), a dramatic decline from a €2.6 billion ($2.9 billion) profit in the same period a year earlier.

It said full year earnings will be significantly below the €11.1 billion ($12.5 billion) profit achieved in 2018.

The German carmaker blamed its weak second quarter on higher costs related to the Takata exploding airbag recall, as well as regulatory and legal risks from the diesel emissions scandal.

In addition to those factors, Daimler said its full year performance will be affected by slow product rollouts and weak growth in automotive markets.

Shares in Daimler were trading 1.7% lower in Frankfurt following the announcement.

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4. Coming this week:
Friday — US producer prices