Are greater risks stacking up for investors in 2019?

In Europe, where Italy is locking horns with the EU and a Brexit deal hangs in the balance, mega-economy Germany has just produced the worst growth in nearly six years. Even if Wall Street can successfully shake off noise from the Old Country, a fresh threat from falling oil prices, along with worries over trade and a Fed misstep may cast long shadows.

“Equities appear to be in no-man’s-land,” says Sean Darby, Jefferies’ chief global equity strategist, who writes that Jerome Powell and co.’s intentions is the big thing keeping his clients up at night.

And they aren’t far off with those worries, according to our call of the day, which predicts 2019 will be a doozy for investors and advises they seek shelter in a much-neglected, glittering port.

“Being long gold has been a tough investment since 2012, and so often, when we see the yellow metal gaining traction, the [U.S. dollar] regains its mojo, and we see the inevitable reversal,” writes Chris Weston, head of research at Pepperstone Group. “However, as we look into our crystal ball and gaze into 2019, emerging warning signs can be seen that suggest 2019 could be the year where gold bulls finally get their day in the sun.”

He predicts a “capital preservation trade” will grip the world in 2019, reviving currency wars, which will boost gold’s safe-haven allure. And the trigger for all this will be a rise in U.S. unemployment and the realization by markets that the Fed has made a policy mistake by going too far with interest-rate hikes, which Weston says could hit in the second quarter of 2019.

Weston notes how the central bank has managed to brush off some concerning data points, such as rising inventory of unsold homes and falling capital goods orders, which likely contributed to market jitters we’ve seen as of late. But it won’t be able to ignore a cloud over the eternal sunshine of the U.S. labor market.

From there, “risk aversion will take hold, with a rampant flattening of the U.S. yield curve and a [dollar] flight will be in play. This is when gold works, especially when the position in gold futures has been significantly reduced,” he says.

You can read Weston’s full thoughts on gold in this tweet.

The market

The S&P SPX, +0.46% , Dow DJIA, +0.22% and Nasdaq COMP, +0.99% are all moving higher as trade kicks off.

Crude US:CLU8 US:CLU8 has bounced around, but is also moving. Meanwhile, the IEA says supply is well outstripping demand. The dollar DXY, +0.11% is slipping and the pound GBPUSD, +0.07% is watching a Brexit deal that hangs in the balance (see Buzz). Some are looking to the Fed’s Powell to take some steam out of the dollar in a Q&A at the Dallas Fed later. Gold US:GCU8 is steady.

Check out the Market Snapshot column for the latest action.

Europe SXXP, -0.99% has had a mixed day and Asian stocks were mostly a sea of red, led by the Hang Seng HSI, -1.81% after a mixed bag of data from China.

The chart

There’s a laundry list of reasons why crude has taken such a big hit lately, from POTUS tweets to oversupply, to seasonal factors. And alongside that, natural gas prices US:NGZ18 have been soaring. Providing our chart of the day, Kevin Muir of the MacroTourist blog offers up his own theory for that headline-busting action of late.

“This week’s move in both crude oil and nat gas was not the result of some well-thought out fundamental reasoning. Rather, in large part, it is due to a large hedge fund calling up their broker at 1-800-GET-ME-OUT,” says Muir, who says at the core of this theory is the fact that natural gas moves have been trading “illogically.”

In other words, mildly colder weather over the past couple of weeks isn’t enough to “spike front nat gas futures from $2.75 to $4.03.”

Bloomberg, MacroTourist

“Over the past five years short natural gas has been a consistent source of profit while crude oil has been rallying due to the synchronized global recovery. It is hard to dream up a more ideal trade for a macro hedge fund,” writes Muir. But someone pushed it too big, and ta dum, he says. Read the full post here.

The buzz

Consumer inflation posted the biggest jump in nine months as gas, rent, used cars all got pricier.

Watch autos as the Trump administration is reportedly holding off tariffs in that sector for now, with that news sending big names in Europe, like Daimler DAI, +0.66% flying.

A Brexit deal has been hammered out, and embattled U.K. Prime Minister Theresa May now have has to sell it to a deeply split parliament, so an announcement could come later on. Meanwhile, Italy is digging in over its budget, and Germany’s economy skidded in the third quarter.

Snapchat parent Snap SNAP, -3.15% is facing some SEC scrutiny over claims of pre-IPO disclosures.

Marijuana stock Canopy Growth CGC, -0.71% is down after missing forecasts. Blue Apron APRN, +6.36% is up after announcing layoffs, even as it struggles to turn a profit. Macy’s M, -0.90% and Charles Schwab SCHW, -1.47% are reporting, along with Cisco CSCO, -1.38% for later.

Read: These big tech stocks may rise at least 30%, analysts predict

Fears that robots will replace people are over-egged, says Salesforce’s CRM, +1.12% senior vice president of strategic planning, Peter Schwartz.

The stat

$91,87500—That was the going price for Edward Hopper’s “Chop Suey” painting at a busy Christie’s auction late Tuesday, which busted several records. For American art, the sale of that piece marks a new world record. Meanwhile, the ”Pink Legacy” diamond sold for over $50 million, the second-priciest diamond ever auctioned.

Random reads

A halloumi crisis is brewing as China has developed a taste for the rubbery fromage.

California fire death toll rises to 48 and heartbreaking photos show badly burned pets.

Cases of mysterious paralyzing disease continue to climb in the U.S.

LGBT migrants first to make it to the Tijuana border as giant caravan moves forward.

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