Gold is finally glittering -- and don't be surprised if it
continues to shine. Gold, remember, is supposed to be a store of
value, and has kept up with inflation over the long term. As Andrew
Bary noted in our September cover story on gold, an ounce would
have bought a good men's suit in 1918, and still does today.
Gold can also act as a buffer in tough times. While the S&P
500 has tumbled 16% during the past three months, gold has gained
8%, acting as just the hedge against market chaos that investors
hope for when they buy it. The SPDR Gold Shares exchange-traded
fund gained 1%, to $120.86, on Thursday, while the VanEck Vectors
Gold Miners ETF climbed 1.5%, to $20.93.
That role as insurance from market volatility was also apparent
in currency markets. In 2018, gold outperformed every Group of 10
currency except the Japanese yen, the U.S. dollar, and the Swiss
franc, observes Société Générale currency strategist Kit Juckes:
"Fair to say, then, that it's mixing it with the safer-haven
crowd."
Given continued uncertainty in currency markets, there's a good
chance that gold prices keep rallying. The dollar won't look great
in a slowing U.S. economy with a large fiscal deficit. Meanwhile,
the euro looks cheap relative to the dollar, but the main argument
for that is that the news out of Europe can't get much worse -- not
a great reason. "The reason for thinking positively about gold at
the moment is that we have deteriorating dollar fundamentals and an
absence of reasons to like pretty much any other currency," Juckes
writes.
--Ben Levisohn
Monday 31
Many markets around the world, including exchanges in Germany
and Japan, are closed for New Year's Eve.
The Federal Reserve Bank of Dallas releases its Texas
Manufacturing Outlook Survey for December. Economists forecast a 15
reading, down from November's 17.6, suggesting that economic growth
is moderating.
Tuesday 1
The nation's first minimum-wage law for ride-sharing firms like
Lyft and Uber goes into effect in New York City. The minimum wage
will be $17.22, after expenses, which is a $5 bump from the current
pay rate of $11.90, as estimated by the Independent Drivers Guild,
which represents over 70,000 app-based drivers.
Brazil's President-elect Jair Bolsonaro is inaugurated in
Brasilia. U.S. Secretary of State Mike Pompeo is expected to attend
the ceremony.
Wednesday 2
Japan's stock market remains closed. Trading resumes on
Friday.
Thursday 3
The 116th U.S. Congress is scheduled to be sworn in. Republicans
maintain control of the Senate, as they have since 2015, while
Democrats are back in control of the House of Representatives for
the first time since 2011. The first order of business will be
electing a new speaker of the House. Nancy Pelosi, who was the
nation's first female speaker, is expected to reclaim the gavel she
first wielded in 2007. Democrats netted 40 house seats in the 2018
midterm elections.
Ford Motor reports U.S. sales data for December, while General
Motors releases data for fourth-quarter 2018.
Goldman Sachs hosts its 11th annual Healthcare CEO Conference in
New York. Agilent Technologies , Alexion Pharmaceuticals, and
Humana are some of the companies slated to attend.
ADP releases its National Employment Report for December.
Consensus estimates are for a gain of 180,000 private-sector jobs
after adding 179,000 in November.
The Institute for Supply Management releases its Purchasing
Managers' Index for December. Expectations are for a 57.8 reading,
down from November's 59.3.
The Department of Labor reports jobless claims for the week
ending on Dec. 22.
Friday 4
Cal-Maine Foods, Lamb Weston Holdings , and RPM International
report quarterly results.
The Bureau of Labor Statistics releases the employment report
for December. The headline unemployment rate is expected to remain
at a half-century low of 3.7%. Economist are forecasting a gain of
180,000 for nonfarm payrolls, up from November's 155,000 increase,
while average hourly earnings should rise 0.3% after gaining 0.2%
in November.
Federal Reserve Chairman Jerome Powell and his two immediate
predecessors, Janet Yellen and Ben Bernanke, are scheduled to be
interviewed jointly at the American Economic Association's annual
meeting in Atlanta.
The Energy Information Administration releases its petroleum
status report. U.S. crude-oil inventories (excluding those in the
Strategic Petroleum Reserve) are about 7% above the five year
average for this time of year.
--Robert Teitelman and Dan Lam
Email: editors@barrons.com
To subscribe to Barron's, visit
http://www.barrons.com/subscribe
(END) Dow Jones Newswires
December 29, 2018 06:15 ET (11:15 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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