Saudi-owned Champions League, obesity crisis and EU wealth tax: Danish bank’s ‘outrageous’ 2024 predictions
Saxo Bank has published the latest in an annual series of “outrageous predictions” for 2024, including a global Champions League owned by Saudi Arabia, a health crisis triggered by obesity drugs and a two per cent EU wealth tax.
The predictions made by Saxo analysts, often humorous in tone, focus on unlikely events that would shock financial markets.
The Danish bank’s predictions for 2024, which do not represent its official views, explore how countries will navigate a “dangerously unpredictable future”, including powerful technological advancements.
“The smooth road the world has travelled on since the great financial crisis, with stable geopolitics, low inflation and low interest rates, was disrupted during the pandemic years,” said Saxo’s chief investment officer, Steen Jakobsen.
“In 2024, it becomes clear that the smooth road is indeed ending, sending the world into a dangerously unpredictable future.”
Last year’s predictions included at least one country banning meat production, gold hitting $3,000 per ounce and another Brexit referendum. With one month of 2023 to go, none have materialised, despite gold hitting a record $2,135.39 on Monday.
Saudi Arabia to buy Champions League as oil hits $150
Ole Hansen and Kim Cramer Larsson predicted that Saudi Arabia would acquire the Champions League franchise on the back of a surge in Brent crude prices to $150 per barrel – almost double their current level.
They said the oil-rich Saudis would turn one of football’s most prestigious tournaments into a global competition, backed by Fifa and with many games being played in Riyadh.
De facto ruler Crown Prince Mohammed bin Salman has overhauled the Saudi Pro League in the last couple of years, taking a 75 per cent stake in the four founding clubs through the country’s Public Investment Fund.
The league has received worldwide attention after acquiring world-class players such as Cristiano Ronaldo and Neymar in massive deals.
The Saxo analysts forecasted Manchester United’s stock price to double due to the Champions League development.
EU to introduce wealth tax, tanking luxury brands
Peter Garnry predicted that, amid geopolitical tension, high costs transitioning to net zero and rising inflation, the European Union would introduce a wealth tax of two per cent annually, triggering a downturn in the luxury market.
“It is a great irony that the EU, which is the world’s biggest welfare system, has created 499 USD billionaires who are paying the lowest amount of personal tax in percentage of wealth compared to billionaires from North America and East Asia,” he said.
Garnry added that LVMH’s stock would plunge 40 per cent, with further shocks being seen for Porsche and Ferrari’s shares.
Obesity drugs to spark health crisis
Charu Chanana and Garnry said the world was set for a “major health crisis” as people would turn to obesity drugs instead of exercise.
They noted that the market for GLP-1 obesity drugs is forecast to hit $71bn in 2032, with the meteoric rise of manufacturer Novo Nordisk to become the most valuable stock in Europe underscoring expectations of rapid growth in the sector.
Governments would designate GLP-1 drugs vital for stopping obesity, although they would fail to meet widespread demand and global adult obesity rates would surge from 39 per cent to 45 per cent, Chanana and Garnry said.
They added that the processed food industry would see a significant boost as people increased their intake of junk food, with Mcdonald’s and Coca-Cola stocks each outperforming broader markets by 60 per cent.
US to make government bonds tax-free
Althea Spinozzi said the US would make income from government bonds tax-free to increase fiscal spending and avoid social unrest amid the 2024 elections.
She predicted that “lingering inflation pressures and foreign investors repatriating capital” would trigger a spike in US Treasury yields and force the government to take “desperate” action to normalise borrowing costs.
In this scenario, the stock market could collapse, although a few cash-rich firms would benefit from the long-term lower cost of funding.
“This dramatic move marks the end of capitalism, as money rotates from private corporations to the public, and holding riskier assets becomes more expensive,” Spinozzi said.
AI to become national security crisis
Garnry said a criminal group would create a generative AI deepfake so advanced that it convinces a high-ranking government official to reveal state secrets, triggering a national security crisis and tougher regulation.
The new regulations would cause investors to “flee the industry” as the public also lost faith in the technology, with AI-generated content making up 90 per cent of all information on the Internet, he added.
Garnry said the press would require government approval to spread public news in a blow to social media and non-mainstream outlets, with shares in The New York Times doubling.
He predicted that OpenAI, the creator of ChatGPT, and Google would be forced to limit third-party access to their language models, meaning only government-approved entities could use these systems.
Robert F Kennedy Jr to win US presidential election
John Hardy bet on controversial candidate Robert F Kennedy Jr to win the 2024 US election, making him the first independent president in more than 150 years with 38 per cent of the popular vote.
“His populist platform against the war-mongering Democrats and against the corporate elites resonates with both disgruntled traditional Democratic and Trump supporters,” Hardy said.
“A new political era in the USA begins with the dramatic pivot away from plutocracy, as voters demand an end to drastic inequality and injustice and the end of forever wars.”
He added that drug and healthcare stocks would plummet on the election result. Kennedy Jr is famous for his anti-vaccine and conspiracy theory rhetoric.
Other predictions for 2024 include the UK and other high-deficit countries establishing a “Rome Club” to negotiate new world trade terms with surplus countries, as well as the Bank of Japan abandoning yield curve control due to a seven per cent GDP growth rate.