- Last year, I came up with 14 bold 2020 stock market predictions.
- Some of them came true … while others didn’t.
- This year, I list 10 things that I see happening in 2020.
There are fewer than three weeks left in the year (and the decade as well).
That means it’s time for some predictions for 2020.
But before I dive into my prognostications, I want to quickly look back at some predictions I made last year to see what I got right and what I got wrong.
Let’s Start With the Wrong Predictions…
Last year, I predicted that the longest expansion in U.S. history would end at 38 quarters.
I thought we’d see a brief recession this year as the sugar highs from the tax cuts wore off.
I got that wrong. The economy never fell into a recession, although it did slow down in the first half of the year.
I also thought that President Donald Trump and Chinese President Xi Jinping would be forced to agree to a trade truce by February.
Boy, did I underestimate their capability to hold out far longer — we’re still in a tit-for-tat scenario with little end in sight.
Lastly, I predicted that Trump and the Democrats would unveil a new infrastructure plan that would provide fiscal stimulus.
While we didn’t get that from the House of Representatives, we did get a potential impeachment and a North American trade deal (the United States-Mexico-Canada Agreement).
Here’s What I Got Right…
I believed the Federal Reserve wouldn’t raise rates in 2019, perhaps even cut them.
It cut rates three times this year. This was an easy one given the disarray in the markets heading into 2019.
I said we’d see a proposal for universal basic income from a Democratic presidential candidate. Enter Andrew Yang, who wants to give every American a “freedom dividend” of $1,000 a month.
I predicted a 21st-century space race would take off. Better late than never — on Wednesday afternoon, the House passed a bill that creates a “Space Force”!
I also said that the new wave of biotech companies would use supercomputers to unlock new cures.
Under this premise, we picked up shares of supercomputer-maker Cray in our Automatic Fortunes portfolio. We then sold them shortly after for a quick 30% gain.
But that was all this year. So let’s take a look at the year ahead.
10 Bold Stock Market Predictions for 2020
- The Fed will be on hold all year. That’s right — Fed Chair Jerome Powell has packed it up. Even if economic growth increases (which looks likely), he won’t feel the need to raise interest rates ahead of an election where the incumbent president dearly needs the economy to finish in his favor. And if Powell even threatens to raise rates in 2020, he’ll hear “You’re fired!” faster than Gary Busey on Celebrity Apprentice.
- Stocks hit a brief bout of volatility like a plane that hits unexpected turbulence. The markets drop 10% over the course of a two-week period to remind investors that what goes up must come down. However…
- With the Fed on hold, stocks “melt up” in 2020. While there might be a hiccup or two, the market finishes the first year of the decade 15% higher from where we are now. The S&P 500 Index goes to 3,600.
- Trump and Xi agree to a monumental trade agreement, although the status quo is largely the same. Both sides declare victory. I don’t know when this would occur, but it would be an antidote to a market drop.
- Tesla stock reaches $1,000 a share as sales in Europe and China are better than expected. Wall Street awakens to the fact that electric vehicles are becoming cheaper than their gas-guzzling predecessors. Meanwhile, Tesla bears lose their voices screaming about accounting fraud.
- The 5G rollout is in full force as Apple launches its first 5G iPhones. Home broadband consumers realize it’s faster and cheaper to get their home Wi-Fi from a 5G wireless signal rather than through their cable company. Mass cord-cutting ensues, to the benefit of Verizon and other wireless providers.
- The market for “mini” initial public offerings takes off when investors realize that all of the big money is made in early-stage investments. They see how Silicon Valley “unicorns” such as Uber, Lyft and Slack handed enormous profits to venture capitalists but were complete duds when they finally went public. New platforms such as StartEngine and SeedInvest gain popularity as retail investors clamor for earlier-stage investments.
- Bitcoin, which leads all other asset classes this year with a 95.5% gain, adds another 50% next year as the underlying protocol “halves” in the middle of the year. This halving occurrence, which happens around once every four years, cuts the block rewards in half, thereby halving the amount of new daily issuance.
- Congress passes regulations to govern self-driving cars on the roadways. Mass hysteria ensues when viral videos of unmanned trucks hit Facebook. Then again, we were terrified of the automated elevator once.
- China announces it will begin using CRISPR technology to gene-edit embryos for taller, faster athletes. (Twenty years later, they still fail to beat the U.S. men’s basketball team in the Olympics.)
Those are just some of my 2020 stock market predictions and things that I see happening in next year.
I already have my Automatic Fortunes readers positioned to profit from a few of these trends — and you could join them. Click here to learn how.
Editor, Automatic Fortunes
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