Almost all Wall Street institutions seem to have released their outlooks for the stock market next year.
But Saxo Bank, based in Denmark, is different. Their analysts make some outrageous predictions every year. These predictions are reasonable but unlikely to happen, often sparking discussions and challenging consensus.
First, a quick review of Saxo Bank analysts' predictions for 2024 reveals that their forecasts were very interesting but lacked accuracy. At the time, they predicted Robert F. Kennedy Jr. would be elected President of the United States, oil prices would reach $150 a barrel, and GLP-1 drugs would derail the fitness industry; all of these predictions fell flat, so investors should approach their new predictions with appropriate skepticism.
By 2025, Saxo Bank analysts found that the best starting point for predictions was the view on Trump 2.0, and they boldly predicted that Trump would destroy the dollar. Given that Trump threatened last weekend that he would impose a 100% tariff on countries if BRICS attempted to create a new currency or support other currencies to replace the dollar, this is a timely warning.
Saxo Bank's chief macro strategist John Hardy wrote: "In 2025, a new Trump administration will radically change the relationship between the US and the world, imposing hefty tariffs on all imported goods while reducing the deficit with the help of a government efficiency department led by Elon Musk."
"Trump weaponizing the dollar is terrifying for global trade because it would cut off the dollar supply necessary to maintain the global dollar system, ironically, this could lead to a significant rise in the dollar. But as global financial institutions rush to find alternatives, they will eventually find a safety valve. The BRICS countries will trade using a gold-backed digital currency. Europe increasingly bases its trade relations on the euro. As global financial markets open this dramatic new chapter, gold-pegged crypto stablecoins will also join in."
Saxo Bank also predicts that Nvidia's market value will become twice that of Apple, thanks to the insatiable demand for AI chips. This is shocking only in scale, not in narrative. The Saxo Bank team stated that at the same time, profits for Apple and other tech giants will be affected as they need to invest in companies like Nvidia to keep pace with the AI arms race.
Another notable outrageous prediction from Saxo Bank is that natural disasters will bankrupt large insurance companies, considering that rainfall and flooding events previously thought to be one in a hundred or one in a thousand are happening more frequently, this does not seem impossible. In this scenario, Berkshire Hathaway would be the winner as it has enough capital to withstand any panic and gain market share.
Other outrageous predictions are as follows:
The electrification craze leads to the disintegration of OPEC;
The US taxes on AI data centers;
The pound has rebounded against the euro to pre-Brexit levels.
Article forwarded from: Jin10 Data