10 shocking predictions for 2024 from JP Morgan: From Joe Biden's ill health to inhalable Covid vaccine

10 shocking predictions for 2024 from JP Morgan: From Joe Biden's ill health to inhalable Covid vaccine

Speculating on everything from President Joe Biden's health to the value of the dollar, a senior strategist at JPMorgan began 2024 with a slew of wild predictions. Michael Cembalest recently released a list of his 'Ten Surprises' for 2024 in remembrance of former strategist Byron Wien, who died at the age of 90 having spent the last 38 years making the annual predictions. Wien emphasized that he intended to "expand people's thinking" and that, even if the prophecies failed to come true, it was still necessary to "think against the grain about what might happen in an industry dominated by consensus." In his list, Cembalest predicted that Biden would withdraw from the presidential contest, rolling blackouts would strike American cities, and boycotts of driverless cars would occur. Here we bring you a look at the 10 shocking predictions for 2024 from JP Morgan strategist Michael Cembalest.

President Biden's withdrawal from 2024 presidential election due to health concerns

In the list of surprises, Cembalest predicted that the 81-year-old POTUS would withdraw from the Presidential race between Super Tuesday and the November election. He also claimed that Biden would withdraw citing health concerns as his reason for resigning from the contest and would hand the baton to a substitute chosen by the Democratic National Committee. “Biden has a low approval rating for a President with ~10% job creation since his inauguration, although that figure is the by-product of his inauguration coinciding with the rollout of COVID vaccines and a reopening US economy,” the JPMorgan strategist said in his prediction.

Electricity and natural gas shortages are expected in major US cities

Cembalest also mentioned other problems in his list, such as gas and energy shortages that major US cities might suffer in 2024. His assessments, which include the 2023 risk assessment from the North American Electricity Reliability Association, indicate that a significant chunk of the North American power grid faces the possibility of an inadequate supply of electricity under peak winter circumstances. According to their assessment, prolonged wide-area cold snaps “threaten the reliable performance of bulk power system generation and the availability of natural gas.” States such as New York, Texas, Pennsylvania, Wisconsin, and Tennessee are now more likely to have power outages during the winter.

Development of an inhaled Covid vaccine

Additionally, Cembalest asserted that he believes researchers are close to completing work on an inhaled Covid vaccine that will reduce transmission. He stated in his outlook that he anticipates the vaccine's inhalant version to be released this year, given the positive results of a clinical trial conducted last year. Researchers in Georgia have developed an inhalation vaccination that effectively decreased the probability of symptomatic Covid-19 infections in recipients by 86% over the course of three months.

The backlash to driverless cars is coming

One further item on Cembalest's list of surprises is his prediction of a widespread boycott of self-driving vehicles. He noted that in places where “full Level 5 autonomous cars are being tested in real-world conditions, they have blocked ambulances on their way to the hospital, hampered other emergency responders, caused accidents, increased congestion, and run over pedestrians, one instance of which reportedly resulted in the resignation of Cruise's CEO.” “I believe a possible backlash is coming from citizens who believe, as in the case of the despised urban scooter plague, that convenience for some results in dangers and inconvenience for others,” the strategist added. He further stated that Tesla is having problems with its cars as well, having issued a recall notice for almost two million of them last month.

Russian invasion of Ukraine will continue without ceasefire

As per Cembalest’s prediction, the war between Ukraine and Russia will continue without a ceasefire in 2024, despite Russia reportedly losing 87% of its prewar active troops and two-thirds of its tanks. Following Democrats' agreement with the GOP to increase funds for US border security in light of rising cross-border crossings during an election year, some US financial aid for Ukraine will be maintained. “Russia’s prosecution of the war finally pushes Europe to spend 2% of GDP on defense, which is what Europe agreed to in the 2006 NATO agreement but hasn’t been adhering to,” Cembalest wrote.

The US dollar will remain stable

Even with all the finger-pointing about the US sanctions turning the dollar into a weapon, the trade-weighted dollar will end 2024 at +/- 7% from where it began, according to Cembalest’s prediction. In addition, the strategist also claimed that the dollar will continue to account for about 50% of trade invoices worldwide.

The DoJ/FTC wins a big antitrust case

The list also contained a forecast that the Department of Justice and/or Federal Trade Commission will prevail in one of the significant antitrust cases presently pending against Google, Amazon, Meta, or T-Mobile, following a lapse of more than 20 years since the Microsoft case.

BSL losses rise above private credit losses

In his list, Cembalest also predicted a historical loss for Broadly Syndicated Loans (BSL). He stated that BSL’s loss respective rates will change following ten years of relatively loose loan underwriting with regard to terms and conditions such as intellectual property transfer limitations, EBITDA add-backs, maintenance covenants, and maturity priming clauses.

The implementation of Argentine dollarization is doomed to fail

As per researchers, Argentina will face a slew of challenges before adopting the US dollar as the legal tender and unit of account. For constitutional changes necessary for dollar convertibility to be approved, Argentine President Javier Milei requires a two-thirds majority. Furthermore, Argentina would need substantial foreign exchange reserves and much higher savings rates to even try it. However, Cembalest forecasted that dollarization would fail if it was put into practice, even if all objectives were accomplished.

US regional banks' stocks will do well in 2024

In the list, the strategist predicted that US regional banks price-to-book ratios will continue to remain at 1.0x or higher in 2024, despite obstacles relating to underwater Treasuries, writedowns in commercial real estate, competition for deposits, and slower loan growth.