Another day, another round of all-time highs?

The Federal Reserve and earnings-season winner Facebook easily could help deliver a trifecta of record closes like we had yesterday.

Bulls apparently have “scented a softening” in the Fed’s stance on inflation, as they keep sniffing at the somewhat dovish handout from Janet Yellen & Co.

But billionaire investor Howard Marks smells something rotten, going by his latest cautionary memo — and that provides our call of the day.

The Oaktree Capital co-chairman gives plenty of reasons to worry about markets right now. Some examples: the recent exuberance over cryptocurrencies, the cheering for FAANG stocks, and the warm embrace of passive investing (index funds and ETFs).

“They show the temperature of today’s market to be elevated. Not a nonsensical bubble — just high and therefore risky,” he writes.

Regarding bitcoin BTCUSD, +0.09% and its cryptocurrency rivals, Marks says “they’re not real” and “perhaps even a pyramid scheme.”

Read:This is what it will take for bitcoin to become a legit currency

Here, in Marks’s own words, are the red flags he lists near the end of his 23-page memo:

• Some of the highest equity valuations in history.

• The so-called complacency index at an all-time high.

• The elevation of a can’t-lose group of stocks. [the FAANG names]

• The movement of more than a trillion dollars into value-agnostic investing. [indexing]

• The lowest yields in history on low-rated bonds and loans.

• Yields on emerging market debt that are lower still.

• The most fundraising in history for private equity.

• The biggest fund of all time raised for levered tech investing. [Softbank’s fund]

• Billions in digital currencies whose value has multiplied dramatically.

So what to do now? Many market participants don’t have the option to not invest, Marks notes. Oaktree will continue to follow its “move forward, but with caution” mantra, he writes.

His full lengthy memo (“I’ve cut what I could,” Marks says) is available here and worth a read.

Key market gauges

Futures for the Dow US:YMU7 , S&P 500 US:ESU7 and Nasdaq-100 US:NQU7 are higher, after the Dow DJIA, +0.47% , S&P SPX, +0.92% and Nasdaq Composite COMP, +1.46% each achieved an all-time closing high yesterday.

The dollar DXY, +0.36% is adding to yesterday’s loss, and analysts are blaming the fall on the Fed swtiching its language on inflation to “running below” its target from “running somewhat below.”

Gold US:GCQ7 is capitalizing on the dollar’s drop, while oil US:CLU7 has been choppy, but staying up big for the week. Europe SXXP, +0.20% is mixed, after Asia closed with gains.

See the Market Snapshot column for the latest action.

The chart

The ICE U.S. Dollar Index is touching a fresh 13-month low this morning, stretching its year-to-date decline to 8.5%.

An ETF that tracks the buck — the PowerShares DB US Dollar Index Bullish Fund UUP, +0.37% — is showing a similar 2017 drop. And it’s the only currency ETF in the red for the year in the chart above from Charlie Bilello, the Pension Partners chart slinger.

Read more:Stocks are ignoring U.S. political uncertainty, but the dollar isn’t

And see:U.S. stocks could get a powerful tailwind from the weaker dollar

The stat

$500 billion — Facebook’s FB, +2.49% market value might hit that milestone if this morning’s earnings-fueled premarket gain holds.

On Wednesday, Amazon AMZN, +5.04% joined the $500 billion club, a select group that includes Apple AAPL, +1.40% , Google parent company Alphabet GOOG, +2.24% GOOGL, +1.91% and Microsoft MSFT, +2.16% .

See:Facebook keeps warning about growth, but growth doesn’t stop

The buzz

Some big institutional investors look set to steer clear of Snapchat parent Snap SNAP, +6.08% after FTSE Russell announced a key decision on its indexes. The index provider plans to exclude companies that basically don’t give public shareholders a voice.

Amazon’s “secret skunkworks lab called 1492” is looking into electronic medical records and other opportunities in health care, says a CNBC report.

Too hot for a slice? Nestle NESN, +0.71% says warm summer temperatures have weakened spending on pizza and other products.

AstraZeneca AZN, -0.75% AZN, -0.37% is on track for a big down day after a closely watched clinical trial failed.

In five years’ time, scandal-hit Libor should be no more.

Earnings season remains in full swing. Companies on the docket before the open include Comcast CMCSA, +3.77% , Twitter TWTR, +6.76% , Verizon VZ, +0.43% , Southwest LUV, +1.31% , Dow Chemical DOW, -0.22% , P&G PG, +1.14% , UPS UPS, +0.35% and Mastercard MA, +1.86% .

Amazon, Starbucks SBUX, -0.10% and Intel INTC, +0.46% are among the names due to report after the close.

In terms of economic data, reports on jobless claims and durable goods are on tap before the open.

Check out:MarketWatch’s Economic Calendar

The quote

What Is the 'Skinny' Obamacare Repeal -- And Will It Pass?

“I’ve been saying for months we should start with what we agree on, and try to build up. The previous strategy was to start big and try to have the whole kitchen sink in there.” — Sen. Rand Paul (R., Ky.) is among those signaling support for a “skinny repeal” of Obamacare.

Read:GOP senators win further support for “skinny repeal” of Obamacare

And see:Heftier bill to repeal Obamacare fails in Senate

Random reads

A ride broke apart at Ohio’s state fair, killing one person and injuring seven others.

The things each state really dislikes are random. For N.D., it’s tapas.

Sweden’s government is in trouble over its handling of a huge data breach.

Brits are having fun writing captions for new photos of their MPs.

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