My 5 surprises for 2018

January 15, 2018

  1. Facebook will complete a $10bn acquisition of a private or public company. The potential target in my list are: Box, DropBox, Spotify, Lyft and Snap;

  2. The oil price will reach $90 per barrel by the end of 2018 thanks to continued world growth and unexpected demand from developing markets, together with disappointing hydraulic fracking production, OPEC discipline and only modest production increases from Russia, Iraq and Iran;

  3. Higher oil price and general inflation pressure will make the FED increase the interest rate 4 times during the 2018, from 1.5% to 2.5%. The Bank of England will increase the interest rate 2 times this year, taking the nominal rate from 0.5% to 1.0%;

  4. The U.S. economy has a better year than 2017, but speculation reaches an extreme and ultimately the S&P 500 has a 10% correction. The index drops toward 2300, partly because of higher interest rates, but ends the year above 3000 since earnings continue to expand and economic growth heads toward 4%. 

  5. Amazon will become the most valuable company in the world, overtaking the top place from Apple. Amazon, today valued at $625bn, will benefit from an increasing dominant market share in the US (50% of online retail by the end of 2018) and an international revenues growth rate of over 50%. Apple (valued today at $900bn) will suffer from an unexpected long-time replacement of the Iphone 5 and 6 and by the cold reception of the IPhone X.

 

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