| Good morning. Stocks are poised to open lower after lackluster earnings in the US and in Europe. Crowdstrike has identified a bug which caused last week's IT meltdown. And eurozone economic activity has ground to a halt thanks to a German contraction. Here's what you need to know. — Morwenna Coniam Want to receive this newsletter in Spanish? Sign up to get the Five Things: Spanish Edition newsletter. Stock futures slumped, led by the Nasdaq 100, after disappointing results from Tesla were followed by lackluster reports from LVMH and Deutsche Bank in Europe. Tesla shares were down 7% in premarket trading after the company reported profit which missed estimates and postponed the unveiling of its highly anticipated autonomous robotaxis. Another of the so-called 'Magnificent Seven' firms reporting on Tuesday evening was Google parent Alphabet, whose second-quarter revenue exceeded analyst expectations thanks to strong demand for cloud-computing services and advertising on its search engine. Still, some investors are looking for clearer evidence of return on investment given the billions in spending on AI. Shares fluctuated in extended trading after the results and are down in Wednesday's premarket trading. CrowdStrike Holdings, the cybersecurity company at the center of massive global IT outages, said last week's meltdown was caused by a bug in a safety mechanism that allowed flawed data to go out to customers in a botched update. The firm, which is trying to piece together the series of events that led to one of the most spectacular rolling IT failures the world has ever seen, said it will improve testing of its updates. Over in Europe, private sector economy activity ground to a halt in the eurozone after an unexpected slump in Germany. Activity in the region's biggest economy surprisingly contracted for the first time since March, while France also failed to grow. The data will be taken into account as the European Central Bank determines its next policy moves after keeping interest rates on hold last week. Treasury yields edged lower as investors await US debt auctions and manufacturing PMI data later today. New home sales and MBA mortgage applications data are also due. On the corporate front, earnings reports are expected from companies including Thermo Fisher, IBM and ServiceNow. This is what's caught our eye over the past 24 hours. There are a number of tensions in Donald Trump's stated economic policies. Can he reduce inflation while increasing tariffs on imports? Can he keep interest rates low while reindustrializing? Can he induce a weaker dollar alongside fiscal expansion? The list goes on and on. But one tension I'm interested in right now actually has to do with Trump's purported stance toward the US dollar and his foreign policy. As Joe Weisenthal and I discussed in an Odd Lots episode last week, Trump and his vice-presidential pick J.D. Vance seem eager for a weaker dollar that would theoretically reduce imports into the US, and also increase the number of manufacturing jobs available for Americans. Meanwhile, Trump's foreign policy approach is decidedly unilateral in nature. At first glance, a weaker dollar and a diminished US role on the global stage would appear to be thematically connected; there's an idea of disengagement running through both those things. So why can't the two coexist? The dollar is a weird beast in a number of ways and its value isn't entirely driven by trade flows, or even differences in interest rates between the US and other countries. The dollar's special status means it can be driven by fear and uncertainty, and that can be true even when the fear and uncertainty are emanating from the US itself. Recall, for instance, back in early 2021, when the greenback strengthened during the storming of the US Capitol. Or times when the dollar has increased in value in the midst of debt ceiling drama. It's a point brought up this week by Steven Englander at Standard Chartered Bank. "The same 'America first' orientation that pursues a weaker US dollar as the route to more domestic employment may also make a weaker US dollar less likely," Englander says. "If the US commitment to engagement with Europe or Asia is seen as diminishing under a Trump-Vance Administration, the outcome may be a safe-haven flow of capital to the US that is independent of rate differentials. This flow could outweigh other factors in terms of driving the US dollar." So there's a possibility that Trump's foreign policy and its associated uncertainty could end up boosting safe haven demand for the US dollar, and strengthening the currency. Of course, things can change and attitudes toward the greenback and its place in the global financial system could evolve. Although here it's worth noting that Trump appears to like the dollar's special status even as he wants to weaken its exchange rate. ("We're also losing our standard—you know, they're going off the dollar," he lamented to Bloomberg Businessweek last week). But that's a whole other tension to discuss another day. Tracy Alloway is co-host of Bloomberg's Odd Lots Podcast. | 
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