2024 Predictions - A Random Walk Down Main Street
Every year I join the crowded field of clairvoyant business folks (jokes!) who attempt to use the data and narratives at their fingertips to project what the next 12 months will look like. In typical biased thinking, we love to ignore the lessons prescribed from “A Random Walk Down Wall Street” which indicates that past performance is no indication of future success and that what happens ahead is a random probability untainted by historical performance. With that, to the streets we go!
This year my 10 predictions include investment, legislative, geo-political and migratory speculation. Enjoy…but don’t hold me to it!
Cities and the return to work narrative will be in full swing in 2024. Faced with the scary realities of offshoring and AI, white-collar workers are on their back-heels and need to put forth a much larger and impressive effort to keep their jobs and maintain their stronghold as the employees-of-choice for companies. That means commutes are back (I-10 traffic reports will be the worst ever), more MTA ridership (MTA to get to 85% of 2019 statistics), and *hopefully* a retained and strong national employment figure (I think we will close the year at 4.7% unemployment)
Chinese and US automotive executives will come to a mutual agreement and path forward for selling Chinese made EVs into the US. This is good for the consumer (high quality products at lower price points) but bad for the US based auto companies that can’t compete based on price. My bold prediction will be that BYD makes a play to acquire Lucid Motors as its beachhead innovation station in the US and shell organization to sell low-cost products made in China.
TRANSMISSION will be the word of the year. I recently found this sound clip that scares the heck out of me: “the majority of the US energy transmission lines were built during the Eisenhower administration.” That was over 60 years ago. Whether we’re talking about midstream pipelines for oil & gas or copper transmission lines for electric voltage transmission, it’s become clear that “generation” is not the problem as much as storage and transmission is the issue for energy independence. I think this year we see wide-sweeping private investment as well as congressional action on transmission line improvement and resilience. Investment in infrastructure is the topic-du-jour (Blackrock buying Global Infrastructure Partners for $12.5B is a good start).
I think we’re entering a domestic recession in 2024. I had this pit in my stomach in 2023 that the recessionary effects would come any day but it seemed that a well-balanced economy once again bolstered the whole. This year, I think the consumer debt and inflation (growing albeit at slower rates) will push the consumer over the edge into a state of austerity that truly hits main street’s spending habits.
International travel will drop off a cliff this year. According to the latest data from the World Tourism Organization (UNWTO), an estimated 975 million tourists travelled internationally between January and September 2023, an increase of 38% on the same months of 2022. in 2024, I predict we’ll see a drop off of international travel down by 15% of 2023’s numbers due to two major factors: 1) Troubling signs of a world war brewing and 2) Consumer credit concerns that create a psychological hoarding mentality on extraneous travel.
Anduril will be the IPO of the year. On the heals of their demonstration of an autonomous anti-missile drone, the US DoD will place a sizable order and Anduril will seek public funding to grow its production capacity. The IPO will not only be one of the largest of the year but will feature prominent defense contractors as investors including at least two of the big 5 Lockheed Martin, Boeing, RTX, Northrup Grumman and General Dynamics.
We will see an accelerated rise in an alternative democratic candidate on the heals of the November election. I’m tempted to say Dean Phillips with the hindsight of a massive donation and backing by Bill Ackman but I think the general population is hungry for a presidential candidate with a 1950’s face on it. What I mean by that is there will be a rise in a new candidate that embodies the American Dream and ‘Hardworking American That Pulled Himself Up from His Bootstraps.” My prediction is that this individual will NOT win the presidential election in November but it will be a contested battle of popularity that America hasn’t seen since Ross Perot.
I’m bullish on Argentina in 2024. I think with the newly elected president, Javier Milei, we will see sweeping reforms that by the end of the year paints Argentina as an emerging market with strong upside and a renewed sense of national pride. What does that actually look like? I think we will see international investment into Argentina increase and we’ll see a tapering of hyper-inflation. We will hear the name Argentina come out of the mouths’ of US public and private leaders like Jamie Dimon, Larry Fink and Pete Buttigeig.
Big winners of the year will be commodities (not prices necessarily but US production), biggest loser will be crypto. After another strong year of BTC, the announcement of an SEC approved Bitcoin ETF, I think 2024 is a year of a crypto sell-off in a flight to more traditional “security.” I think Bitcoin will erase most of its gains from 2023 and I think we’ll see the big winner be mining legislation in America. I think this year we will see a huge piece of legislation passed for greenfield mining activity in the US to ‘unlock’ mining capabilities in key deposits across America.
Texas will once again be the #1 net migration beneficiary and California will once again be the #1 net migration casualty in the US in 2024 (Based on Uhaul migration stats). Lower taxes, employment growth, and affordable housing will drive Texas once again and California’s budget deficit, cost of living concerns and general frustrated sentiment amongst its constituents will drive more people out.