As we nail shut the lid on 2015’s coffin, we’ve asked our contributors to cast their runes and tell us what the New Year will bring. They have called upon their infinite wisdom and come up with some interesting predictions for the markets, the economy and the state of the world in general.
So, what does 2016 have in store for us?
Swen Lorenz, Editor-in-Chief:
“The oil price will plummet to new lows on the back of oil-producing nations outcompeting each other in their desperation to generate cash. Donald Trump will get closer to winning the Presidency than anyone would have ever thought possible, or he might even win. Angela Merkel will become Director General of the United Nations.”
Simon Cawkwell, Evil Diaries:
“I foresee terrible events in 2016 of which the least will be a major meltdown of equities. The insanity of quantitative easing will unravel. And that is only the start…”
Alex Williams, mining writer:
“Base metals will hinge on China, the great unknown, but the price war being played out in coal and iron ore means there is almost zero chance of a bounce for bulk commodities, weighing on Rio, BHP Billiton and Anglo American, which is going to be severely challenged. Deal flow however will pick-up: companies that have made it this far through the mining downturn, whilst paying down debt, are likely to start feeling quite pleased with themselves and will begin looking to the end of the tunnel. Four predictions: Lucara to buy Firestone, Anglo to sell De Beers, Rio Tinto to offload its iron ore mines in Canada and the big one, Rio to bid for Freeport, overtaking BHP Billiton as the world’s largest mining company.”
Nick Sudbury, contributor:
“It is hard to find anyone who is bullish about the oil price, but most of the comments you hear are fairly superficial and aim to justify the ‘new normal’. The reality is that WTI at $40 a barrel is a problem for many oil exporting countries and producers. I think that we will see a few weeks of heightened volatility because of the reaction of the dollar to the interest rate decision by the Fed, but then the market will stabilise and at some point in 2016 will hit $60 as the supply is cut back to bring it more in line with the demand.”
Richard Gill, CFA, contributor:
“UK interest rates to remain unchanged all year. Another small cap private investor favourite stock reveals itself to be a fraud. FTSE 100 to again reach 7,000 during the year. Internet technology stocks to collapse in value. At least one by-election to be caused by the resignation/defection of a Labour MP. Oh and Bradford City to win the League 1 play offs.”
Caroline Drewett, contributor:
“Anti-EU parties will flourish, with Poland, France and Greece leading the way. At least one country will leave the EU by the end of 2016, either by choice or by economic force, causing the start of the Eurozone collapse. China and Japan will capitalise on Europe’s weaknesses, and will strengthen their own economies through global trade agreements while Europe’s too busy arguing amongst themselves about borders, economies, and responsibilities.”
Andre Minasian, contributor and trader:
“I feel 2016 will bring us ever closer to WWIII , Russia escalating it’s military involvement in Syria and at some point being provoked and having no choice but to attack Turkey. Russia V Turkey will provide the trigger to the global war. NATO forces will join on the side of Turkey and we will have a war which will change all of lives in the most dramatic manner. This war will result in Putin losing power and being replaced which will translate into oil moving higher back to $100 levels. Turkey will be the centre of the conflict and will itself experience internal divisions and conflict resulting in Turkey being split up into smaller regions. DJIA and S&P will continue moving higher, Dow will hit 20,000 plus and US markets will continue The Bull Run which started end of 2008. ID cards will be introduced in Britain and across Europe and banking stocks will go lower further. Donald Trump will be elected president of USA. All in all, not looking good.”
Filipe R. Costa, markets and economics writer:
Fed by central banks, equity markets and house prices march higher while the world economy struggles to grow. Oil trades at $20 and Saudi Arabia introduces income taxes to fight an exploding deficit. The developed world enters a period of massive deflation. Demand for sterling explodes, as Europeans seek for yield. House prices in London hit record levels. The ECB increases its asset purchase program, and starts buying corporate debt. The SNB panics and cuts deposit rates to -2.5%. Money disappears from banks. By the end of 2016 everybody will be paying in advance for products and services. Some people will accumulate balances of up to €5,000 with telecommunications providers. The mattress business will prosper, as everybody attempts to get rid of the negative-yielding asset bank deposits will turn into.
Adrian Kempton-Cumber, troublemaker:
“Someone tells Keith Richards that he died in 1983, but he refuses to believe them and tours with the Stones again. The Queen dies because Prince Chucky insists on her using a homeopathic cure. That ginger kid who lives with the royals is exposed in a DNA test by a tabloid after a boys’ night out in Newcastle he called the Harrying of the North. After a successful military campaign against ISIS David Cameron tweets “f*cked some pigs now, haven’t I, draaaaaaa”. Oxford is accidentally bombed after a report of ISIS running through it.”
What are your predictions for 2016? We’d love to hear them.
We’ll publish the best on the blog with a prize for our favourite.
Keep an eye out for the January edition of the Master Investor Magazine, where our writers will reveal their top investment ideas for 2016.
Words: Josh Allsopp