Daimler warning; Oil watch; Dow nears record

Posted at 3:48 AM, Jun 24, 2019
and last updated 2019-06-24 07:18:36-04

1. Daimler warning: Daimler, the German auto company that makes Mercedes-Benz, has slashed its 2019 profit expectations by hundreds of millions of euros.

The company said over the weekend that its profit for 2019 will be close to last year’s level. Shares in the carmaker declined 4.7% in Frankfurt on Monday. The stock has dropped 20% from a recent high in April.

Daimler blamed the financial downgrade on continued fallout from the diesel emissions scandal that has for years weighed on the German auto industry.

But the warning goes beyond diesel. Flagging profits undercut Daimler’s ability to plow money into the vehicles of the future at a time when such investment is crucial. The company is racing to offer 130 electric and hybrid models by 2022, in addition to electric vans, buses and trucks.

The need for new investment is forcing carmakers to join forces, either in the form of partnerships or mergers. The Wall Street Journal reported this weekend that Fiat Chrysler and Renault could revive merger talks that collapsed earlier this month after the French government intervened.

2. Oil watch: Oil prices continued to rise Monday amid continued friction between the United States and Iran.

President Donald Trump said in an interview on “Meet the Press” this weekend that he’s “not looking for war” with Iran. But tensions remain, with additional US sanctions on Tehran set to be announced Monday.

Brent crude, the global benchmark, gained 0.1%. US oil prices rose 0.8%.

3. Dow nears record: US stock futures are up slightly, with the Dow again inching toward an all-time high.

The index is set to open up 50 points, or 0.2%. That would put it fewer than 100 points from its record peak notched in October.

The S&P 500 is poised to open up 0.2%, while the Nasdaq could rise 0.3%.

Global markets were mixed ahead of the G20 summit later this week. Britain’s FTSE 100 opened flat, while Germany’s DAX lost 0.5% in early trading.

Stocks in Asia mostly increased. The Shanghai Composite rose 0.2%, while Hong Kong’s Hang Seng and Japan’s Nikkei gained 0.1%.

The Dow closed down 0.1% on Friday. The S&P 500 was down 0.1%, and the Nasdaq was down 0.2%.

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4. Coming this week:
Tuesday — S&P Case-Shiller Home Price Index; US new home sales; Micron and FedEx earnings
Wednesday — US crude oil inventories; General Mills earnings
Thursday — Nike and Walgreens earnings; US GDP third estimate
Friday — US personal income and spending data; Constellation Brands earnings; G20 begins