• Doug Kass creates “10 Surprises in 2024” in memory of Byron Wien
• The US has its first American president, slow economic growth, ongoing geopolitical conflicts
• Apple with sales losses, Elon Musk on withdrawal, media companies under pressure
For almost four decades,… Black stone-Strategist Byron Vienna publishes his anticipated “Ten Surprises” column every year in which he presents ten forecasts regarding the economy, Financial market and shared the policy for the coming year with his followers. However, the 2023 column was the last Byron published. The market expert died on October 25, 2023 at the age of 90.
Doug Kass records “10 Surprises in 2024.”
In his memory, hedge fund manager and TheStreet columnist Doug Kass decided to continue the Vienna-style tradition for 2024, highlighting “10 Surprises in 2024.” Kass himself publishes a similar format annually, but this year he decided to embrace the textual nature of Vienna “down to the brevity and brevity of its surprises over the past 38 years,” as he writes in TheStreet article. The surprises include possible political events, economic developments, predictions about individual stocks and financial markets in general, and about famous personalities.
For the first time in the office of the President of the United States
The first surprise concerns the former US president Donald Trump. Kass paints a scenario in which current US President Joe Biden grants Trump a pardon in exchange for the controversial businessman’s 2024 presidential bid. But that’s not enough. Additionally, Kass predicts that shortly after Biden wins the nomination, he will suffer a medical emergency and subsequently have to drop out of the presidential race. Finally, in November 2024, a decision would be made between the two presidential candidates, Nikki Haley and Gretchen Whitmer, so that the presidency would be definitively occupied by a woman in 2024 – the first female president of the USA.
Geopolitical conflicts persist
The second surprise overcomes various geopolitical conflicts that already existed in 2023. Kass predicts that negotiations will begin between Ukraine and Russia on the possible territorial separation of eastern Ukraine to Russia. And this against the background of the fact that Ukraine is no longer supported by the USA. According to the hedge fund manager, there could also be renewed tensions between North Korea and South Korea, as well as between Iran and Israel. Moreover, China’s intimidation tactics against Taiwan are likely to continue.
Distortion in the oil market
Geopolitical conflicts are also likely to lead to turmoil in the oil market, especially if Russia and Saudi Arabia agree to cut production, Kass writes. Here he could The price of oil rise to more than 110 US dollars per barrel – which means oil-Such supplies Chevron, Occidental Petroleum and ExxonMobil It is expected to grow by more than a third in 2024.
The growth of the US economy has slowed
In his third surprise, Kass addresses the American economy. Already in 2023, there was a lot of speculation about whether tighter Monetary Policy lead to a recession or result in a ‘soft landing’. A hedge fund manager speculates in a TheStreet article that there is neither. Instead, there would be “slow economic growth” with persistent inflation. In an attempt to influence the US presidential election, the Fed would still decide to do so in 2024 Interest charges reduce twice.
However, the started economic growth would level off again in the second half of the year and the unemployment rate would increase, so that a recession would begin to develop at the end of 2024, which would drag the yields on long-term US government bonds back above five percent. This would mean that the US debt problem could no longer be ignored by investors, but would emerge as a “serious systemic problem in the coming years” by the end of 2024.
The S&P 500 and NASDAQ Composite face a downtrend
This development presents the hedge fund manager with a fourth surprise. Due to the aforementioned political, economic and geopolitical challenges, financial markets are likely to move in a very tight range in 2024. For the all-market US index S&P 500 It will probably drop by five to ten percent by the end of the year Composite NASDAQ it may even see a downward trend of ten to 20 percent.
Apple shares before the crash
S&P 500 collapse coincides with hedge fund manager’s fifth surprise: the collapse of a favorite investor Apple. The iGroup probably suffers from China being a domestic technology group Huawei support and thereby lose significant market shares in the People’s Republic. This, in turn, is likely to put pressure on the Tim Cook Group’s sales. Kass foresees this as well Google As a result of the App Store settlement, which the Alphabet subsidiary wants to settle by paying 700 million US dollars, it could stop its billions in payments to Apple and other companies. Google made $26.3 billion in payments here in 2021, according to Reuters. All of this could send Apple shares below $130. For comparison, the paper is currently trading at $194.83. However, Apple fan and investor legend Warren Buffett would then immediately take advantage of the decline in Apple shares and his investment holding company’s stake in Apple Berkshire Hathaway to almost two billion shares.
The commercial real estate market remains under pressure
The sixth surprise concerns the commercial real estate market, which came under severe pressure in 2023. Kass speculates here that there is unlikely to be a price recovery in 2024, which could lead to a rise in defaults and another regional banking crisis. As a result, the FDIC is forced to negotiate more bank mergers, which in turn is likely to weigh on bank stocks in general. According to the hedge fund manager, they would return to their lows in 2023.
Private equity is plummeting
According to Doug Kass, the private equity sector is also likely to come under pressure in 2024 given rising interest rates and a deteriorating global economy. Shares in the world’s largest asset manager, Blackstone, are likely to drop by a third. The reason would be the Blackstone funds BREIT and BXMT, which are under pressure to repay. Also other private equity companies like KKR and Apollo they are likely to suffer discounts, especially as the US Securities and Exchange Commission (SEC) launches investigations to enforce more realistic marketing of private equity portfolios.
Elon Musk is undergoing a recall
In his eighth surprise hit, the hedge fund manager takes a dig at controversial Tesla boss and businessman Elon Musk. According to Kass, in 2024 it would become clear that Musk was suffering from a serious addiction and was therefore about to withdraw. This in turn would mean that he would be forced to temporarily relinquish his numerous leadership positions, which would be particularly damaging to Tesla-Share yourself. This would return to its 2023 lows.
Media giants under pressure
Kass’ ninth surprise is dedicated to various media giants. So are the entertainment giants A Warner Brothers discovery and Paramount Global suffers financial setbacks after streaming fails to meet optimistic market expectations. The total addressable market here has been overestimated, while production costs for own content have remained high, making profits basically impossible. Due to this liquidity crisis, Chairman Shari Redstone is forced to sell Paramount to private equity. Nelson Peltz would suffer big losses at the media giant Disney exit, whose shares are trading around $70 (current price: $91.30). However, the Peltz shares that were sold would go to Bill Ackman’s hedge fund Pershing Square find a new owner.
Jamie Dimon is leaving JPMorgan to become Treasury Secretary
The final surprise that Doug Kass has come up with for 2024 involves a star investor and JPMorgan-Chief Jamie Dimon. He would eventually leave the investment bank to support either Haley or Whitmer, whichever presidential candidate wins in Kass’s scenario, as Treasury secretary. However, the new head of JPMorgan would be Marianne Lake.
Of course, these imaginary surprises are like looking into the proverbial crystal ball. No one can say what the future will look like in reality. So now it remains to be seen which predictions TheStreet columnist Doug Kass got right — or if he was consistently wrong.
The editorial team of finanzen.ch