2020 Financial Predictions

Posted By Darren Winters on Jan 9, 2020


2020 Financial Predictions

The 2020 financial predictions consensus was recently published by Visual Capitalist, which makes both a timely and interesting read.

It comes as no surprise that in this data-driven world, the 2020 prediction consensus was no lighthearted exercise. Indeed, during December over 100 articles, Whitepapers, and interviews were conducted to get a heads up on where 2020 is likely to take us.

As expected, no firm consensus was established. However, a few recurring themes in multiple publications gave light to the 2020 prediction consensus among the so-called experts.

So the product of this extensive monthly research was the 2020 financial predictions bingo card, which is a graphic highlight of the top year’s financial predictions.

I have gone off-piste to produce my own 2020 financial predictions with a few no less light lighthearted variations

2020 Financial Predictions

So consumerism moves online and retail goes automated was highlighted in the 2020 financial predictions consensus as a major theme going forward. 

The continuing closure of brick and mortar stores, especially large chains, dubbed the“retail apocalypse” showed no signs of abating with retailers announcing record store closures last year. 

In 2019 US, retailers shut more than 9,300 locations, which was up more than 50% from the total announced closures in 2018, with 5,844 closures reported. Previously, the record was for the 8,069 store closures announced in 2017. 

In short, the retail apocalypse is gathering momentum and it is not all down to the Amazon effect. 

I interpret this as an indication of households searching for bargains in a sluggish economy.

The blowup in subprime commercial loans is one of my 2020 financial predictions

Another one of my 2020 financial predictions is the death of brands

In an Amazon Prime world, millennials don’t care about brands. Brands could continue to struggle in the year ahead.

Retail goes automated, another trend highlighted in the 2020 financial predictions is already occurring with cashier-less autonomous stores, powered by the latest technology.

The slow phasing out of cash and the beginning of facial payment technologies is another one of my 2020 financial predictions

Asia is leading the way in a society with no cash.

Today consumers authenticate payments with a PIN, but tomorrow it is likely to be increasingly facial biometric data that will authenticate payments. 

Facial payment technology has already gained popularity in China. Notes and coins will no longer exist by the end of the decade. The populous will embrace digital payments due to its convenience, hygiene and no risk of being pick-pocketed. For the ruling elites, the end of cash will be desirable too, as it will enable them to exercise ultimate control over the population and eliminate bank runs. 

In short, payment service providers leading the way are likely to do well going forward. 

“Cashireless and autonomous retail technology will gain fast adoption,” Inc. 

Keeping with the technology theme other 2020 financial predictions include the roll-out of 5G

5G, which facilitates broadband speeds of over one gigabit per second, will become a reality when it is rolled-out across the country, without the cable that currently connects most homes. 

“5G will go from promise to roll-out in 2020,” Morgan Stanley. 

That could bring opportunities that we don’t even know about. But 5G health risks could also hold back wide adoption, bearing in mind that 5G is a new technology, there is no research on health effects, so we are “flying blind” to quote a US senator.

The impact of Artificial Intelligence (AI) on advanced economies is likely to be more evident is another one of the 2020 financial predictions consensuses

But AI will destroy more jobs than it creates in the next decade.

Autonomous cars and cashier-less stores, chatbots powered by AI technology will displace workers, particularly less-skilled workers. In 2017, Forrester estimated that automation would result in a net loss of about 7% of jobs in the US by 2027, replacing 17% of jobs while creating new jobs equivalent to 10% of the workforce. 

Regarding the 2020 financial predictions consensus of no recession and a US strong job growth, I remain skeptical

The fundamental data is weak. For example, companies are already in an earnings recession. US domestic freight services are in a recession and US auto sector continues to struggle

Moreover, the global economy could also experience ongoing headwinds from US-China trade talks which appear to be heading nowhere. 

My financial market 2020 predictions are that the Fed will not hike rates in 2020, in fact, we could see further rate cuts

The US 10 year treasury yield is unlikely to rise in 2020 as evidence of a recession gains traction going forward. 

The Fed will try to keep the US dollar suppressed to try and boost US exports and reduce the burden of servicing US dollar global denominated loans. The trend of a weaker US dollar could continue going forward, as the Fed embarks on a policy of continuous monetary easing. In other words, a repetition of Fed rate cuts and quantitative easing. 

Heightened geopolitical risks could result in a regional war escalating and going global is another one of my 2020 financial predictions

Concerns around the globe are mounting.  North Korea continues to test its ballistic missiles. Iran will no longer abide by uranium enrichment limits under the 2015 nuclear deal, in the wake of Iraia’s top General, Qassem Soleimani assassination by a US military drone. In Europe, the US ends the INF nuclear treaty, which was signed by Soviet leader Mikhail Gorbachev and US President Ronald Reagan in 1987 to deescalate the threat of a nuclear war on the continent. UN Secretary-General Antonio Guterres has warned that “an invaluable brake on nuclear war” was being lost. That leads me to Gerald Celente’s famous quote, “When all else fails, they take you to war”.  

Meanwhile, millennials are escaping the city and heading for cheaper less populated rural areas is another 2020 prediction consensus

Maybe they have a sixth sense.

So will 2020 will be the year where humanity and capital makes the great escape to safe havens?

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