Investors are proving a fairly patient lot these days, considering the big questions marks around the global economy and the U.S. government itself.
Comments from top White House economic adviser Kevin Hassett a day earlier about “zero” growth for the U.S. if the shutdown doesn’t end soon, are still the subject of some chatter for Wednesday. The day for Wall Street is looking positive so far, but its mettle may be tested later if competing bills to reopen the government go down in flames, as expected.
At least we can look to earnings for some distraction, and decent news on the tech side from Texas Instruments and others has that sector tipped to lead the way higher for Thursday. But it’s not a bad time for investors to look at other assets these days, especially given the “flat and skinny” kind of 2019 that’s being predicted for stocks, as opposed to the creamy caramel-coated foam on top like we got in 2017.
It is early in the year and maybe not a bad idea to look at some diversification options. That brings us to our call of the day from Goldman Sachs’s head of commodities research, David Currie, who says Brent crude is likely to “overshoot” his $67.50 a barrel target this year, as he also reiterates why they love gold so much.
First stop, the sticky stuff and his call is not a far distance away from the $61 where Brent is currently sitting. Currie says the big selloff in December was just an “unwind of exuberance,” and there’s a big point he makes here.
“Demand for oil and commodities is solid. It’s the same boring demand growth we have been seeing since 2016, 2017, 2018 and now 2019 in that a lot of that was sentiment going up and down around that relatively benign demand outlook,” Currie told Bloomberg News in an interview posted Thursday.
And in particular, he said China imports were still up 30% year-over-year in December. Add that to the fact supply is still coming off the market from OPEC and non-OPEC oil-producing countries and demand remains, if not robust, at least benign, Goldman still sees “significant upside” for crude ahead.
If the global economy suffers or is perceived to suffer, oil would take a hit because China and other emerging market nations are big buyers of crude. But Currie thinks that economic sentiment survey-type data swinging hard the other way now from 2017 and early 2018. Most recent data showing what people think will happen is more negative than even the hard data.
As for gold, in a separate interview Currie laid out their three reasons for a bullish view: fear of recessionary risks still make it a good hedge against those possible economic problems; a weak dollar improves the purchasing power of emerging markets, with China and India expected to fuel even more physical demand; and signs of more central-bank buying, from India, China and emerging markets.
Goldman has a 12-month gold forecast of $1,425 an ounce, which is also a fair pace from the current $1,278.40 level.
And he says when it comes to bitcoin vs. gold as hedge, the answer is obvious: “Bitcoin has been trading for five years, gold has been trading for 3,000 years. I’m gonna take gold.”
Read: Frustrated investors say Trump administration overly sensitive to stock-market gyrations
are inching up and Nasdaq
futures were even stronger. That’s after Wednesday’s choppy session that saw the Dow
Read: How low will the S&P 500 go? Buffett and Shiller know
is steady ahead of supply data. Gold
is slipping, while the dollar
is higher, as the euro
drops ahead of an ECB meeting planned for Thursday, where investors expect ECB President Mario Draghi to talk about risks to the eurozone economy.
Read: Here’s what Venezuela’s turmoil means for oil prices.
are modestly higher, even after some sour economic data. Asia markets saw modest gains, with the Shanghai Composite
Earnings from Bristol-Myers
and Freeport McMoRan
are all on tap today. After the close, we’ll hear from Intel
Shares of three big chip companies — Texas Instruments
— are rising on upbeat earnings news.
posts surprise loss as it keeps an outlook for the year ahead under wraps.
Check out our earnings previews: Starbucks, Intel, Tesla
is dismissing about 200 people from its autonomous driving unit Project Titan, some of whom will be moving to other parts of the company.
A new wrinkle on the trade front develops as China reportedly blocks Microsoft’s
Bing search engine.
In an interview, Twitter
CEO Jack Dorsey dishes on the cold goat he was once served at Facebook
CEO Mark Zuckerberg’s house. Meanwhile, Twitter is testing a new “Original Tweeter” hashtag to help users find the source of tweets
After some late-night back and forth tweeting between Trump and Speaker of the House Nancy Pelosi, the president said he’ll deliver the State of the Union address after the partial government shutdown, now in its 34th day, is over. The Senate is due to vote on two competing bills to reopen the government Thursday, but neither is expected to succeed.
The shutdown has stopped a lot of data, but investors will still getting some updates on the economy Thursday — weekly jobless claims, the Markit manufacturing and services purchasing managers index surveys and leading economic indicators are all on tap.
$867 million — That’s how much Spain’s Real Madrid generated in the 2017-2018 season, which makes it the richest football club in the world. According to the Deloitte Football Money League, the Madrid team has replaced Manchester United, which dropped to third behind Barcelona.
“Bohemian Rhapsody” director Bryan Singer accused of molesting minors
American diplomats given 72 hours to leave Venezuela as crisis builds
Anthony Scaramucci sneaks out of ‘Big Brother’ to join global elites in Davos
Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. Be sure to check the Need to Know item. The emailed version will be sent out at about 7:30 a.m. Eastern.
Follow MarketWatch on Twitter, Instagram, Facebook.
Providing critical information for the U.S. trading day. Subscribe to MarketWatch’s free Need to Know newsletter. Sign up here.