Saxo’s "Outrageous Predictions” For 2020

Jackie Bennion

9 December 2019

Saxo Bank’s “outrageous predictions” for 2020 are a welcome diversion from the more conventional outlooks that chief economists tend to despatch at this time of year. Seen as a touch of annual alchemy, Saxo’s list is nevertheless a good exercise in considering the art of the possible as strategists at the Danish bank generally add just the right amount of unsettling plausibility to some of its predictions – which can carry even more weight in these “anything can happen” times.

Explaining what shaped the list this year, Saxo's chief investment officer Steen Jakobsen struck a serious note on the many ways in which years of loose monetary policy are coming back "to haunt" the industry. Next year will bring “new worries,” he said. “We see 2020 as a year where at nearly every turn, disruption of the status quo is an overriding theme,” and where the pendulum could swing to the opposites “in politics, monetary and fiscal policy, and not least the environment.”

The bank acknowledges that these “predictions” are meant to be conversation starters made more difficult “because today’s world has become too partisan and intolerant.” In the spirit of that, we thought we would begin by publishing Saxo’s outrageous predictions for 2019 and let you discuss how close to reality they came; and which ones are still frankly sounding materially plausible. And below that, what sublime new lines might be crossed in 2020.

On the list for 2019:
1. EU announces a debt jubilee
2. Prime Minister Corbyn sends GBP/USD to parity
3. Trump tells Powell “you’re fired”
4. Germany enters recession
5. Apple “secures funding” for Tesla at $520/share
6. Corporate credit crunch pushes Netflix into GE’s vortex
7. IMF and World Bank announce intent to stop measuring GDP, focus instead on productivity
8. Global Transportation Tax enacted as climate panic spreads
9. X-Class solar flare creates chaos and inflicts $2 trillion of damage
10. Australia launches “TARP Down Under” after nationalising the big four banks.

Saxo's "Outrageous Predictions" For 2020:
1. Chipmaker stocks collapsing in 'AI Winter' of diminishing returns
2. Stagflation taking hold, rewarding value over growth stocks
3. European Central Bank starting rate hikes, forcing growth
4. Oil and gas industry outperforming clean energy as transitioning takes a reality check
5. South Africa currency tumbling as world cuts credit lines
6. Trump doubles down announcing America First tax to reduce trade deficit
7. Sweden rolling out 'huge fiscal stimulus' to encourage immigrant integration, rallying the krone
8. Democrats winning the 2020 election led by women and Millennial voters
9. Hungary leaving the European Union
10. Asia launching a new reserve currency to break from dollar dependency.