(BFM Bourse) – Like every year, the Danish bank has published its “black swan” forecasts, namely a set of improbable events capable of causing a shock wave on the financial markets, in the political and popular world.
It is a now well-established tradition: at the end of each year, the Danish bank Saxo Banque delivers “shock” or “black swan” forecasts, the probability of which will come true is very close to zero. Although it has happened in the past that these predictions fall very close to reality. For example, in 2015, the establishment was counting on an electoral success for the United Kingdom Independence Party (Ukip) which would have resulted in a coalition with David Cameron's Conservatives with a vote on Brexit in 2017. This vote , which resulted in the United Kingdom's departure from the European Union, has indeed occurred. But a year earlier, in 2016.
If we return to Saxo Banque's main forecasts for 2024, the establishment had mentioned, among other things, oil at $150 per barrel, a collapse in luxury values due to a wealth tax, or the victory of Robert Francis Kennedy Jr, nephew of the late former President of the United States, John Fitzgerald Kennedy, in the 2024 US presidential election.
For some of them, Saxo Banque was not very far from the initial shock scenario. The luxury sector faces a difficult year in 2024, particularly due to the slowdown in consumption in China.
As for a victory for Robert Francis Kennedy Jr in the American election, it was Donald Trump who won this election. But the US president-elect appointed this notorious vaccine skeptic to head the Department of Health. This creates significant uncertainty for the pharmaceutical sector, in particular for vaccine producers.
What about the 2025 vintage? Saxo Banque points out that its shock forecasts for the coming year “are not real news and do not entirely reflect reality, at least not yet”.
“These forecasts constitute an intellectual exercise which aims to consider all possible scenarios, even if they have little chance of coming true,” insists the financial establishment.
> Trump 2.0 makes the American dollar plummet
Saxo Banque imagines strong movements on the king dollar compared to its main counterparties and pushes the theme of dedollarization to the extreme. Due to the massive customs duties desired by Donald Trump, world trade would decline, which would weigh on demand for the greenback.
Also, the bank explains that a policy of deleveraging and chasing public spending led by the Department of Government Efficiency (DOGE), would also restrict the number of dollars in circulation.
For Saxo Bank, “these policies limit the global availability of dollars, essential to supporting the international monetary system. Paradoxically, this could lead to a surge in the value of the dollar. Faced with this situation, global financial players are turning to alternatives” . The bank cites gold-backed digital currencies.
“We are abandoning the dollar for international transactions, we are focusing on cryptoassets backed by gold. The consequences would be as follows: an immediate drop in the dollar, of the order of 20% against major currencies like the euro, the pound sterling or the yen, by 30% against gold but above all a big increase in the cryptocurrency market”, lists Andrea Tueni, sales trader at Saxo Banque, guest on Wednesday's BFM Bourse show.
Remember that Donald Trump threatened the BRICS (Brazil, Russia, India, China, South Africa) to impose 100% customs duties on them if they did without the king dollar to settle their international transactions.
>> Nvidia reaches a valuation twice that of Apple
This shocking scenario seems “the most credible”, says Andera Tueni on the air of BFM Bourse, in view of the dynamic printed by Nvidia in artificial intelligence and its lead compared to its competitors. Saxo Bank therefore sees Nvidia's market capitalization reaching $7,000 billion, compared to just over $3,550 billion currently according to companiesmarketcap.com. The market capitalization of Nvidia envisaged by Saxo Banque would represent 10% of the total value of world stock markets.
“In 2025, Nvidia's success will be further strengthened by the large-volume release of its revolutionary Blackwell chip, equipped with 208 billion transistors. It increases computing performance for artificial intelligence by 25 per unit of energy consumed compared to the previous generation, H100”, reports the bank.
Nvidia shares could therefore trade well above $250. But in the longer term Saxo expects a downside for the technology group, which would have “huge” repercussions on the markets. Investors will question “Nvidia's ability to capture an ever-increasing share of corporate profits, and whether regulators will slow down its growth prospects due to concerns linked to its monopoly status”, argues Saxo Banque.
>> A natural disaster causes the bankruptcy of a large insurance company
According to Saxo Bank, the numerous natural disasters resulting from climate change could weaken insurers. Even cause the bankruptcy of a major player. The bank estimates that a major natural disaster would inflict damage well beyond the $40 billion in claims linked to Hurricane Katrina in 2005.
“One of the largest U.S. insurers significantly underestimated insurance risks related to climate change, leading to undervalued insurance policies in the affected region. With reserves insufficient to cover claims and inadequate reinsurance to mitigate the costs of this extreme event, panic is spreading throughout the sector,” says Saxo Bank. “An insurance company that goes bankrupt is potentially the factor of a systemic shock, with the intervention of governments to avoid contagion, recalls Andrea Tueni.
“A crisis is triggered, leading to discussions at government level on the opportunity to bail out the failing company and other war casualties in the sector in order to avoid generalized contagion of risks”, also imagines Saxo Banque in its shock forecasts.
> Bonus shock forecasts
Without going into detail on each of them, let's mention Saxo Banque's other “shock” ideas for 2025. The bank imagines the creation of a first bioprinted human heart which would open a new era of longevity, or that China announces a massive recovery plan of 50,000 billion yuan to stimulate its economy. Among Saxo Bank's extreme scenarios, we also find the establishment by the United States of a tax on AI data centers in the face of soaring electricity prices, or the rise of electrification cars that would seal the fate of the Organization of the Petroleum Exporting Countries (OPEC).
“While some members are already cheating on production quotas to appropriate what revenue they can and export demand is falling, a majority of them are quickly realizing that there is no nothing left to do in the midst of quarrels and infighting, key members leave the organization and are thus relegated to the dustbin of history. Former members maximize their production to ensure the stock market. drop in prices of oil”, imagines Saxo Banque.
Another shocking scenario: the pound sterling erases the post-Brexit discount against the euro. “As the European economy struggles, new winds of fiscal policy are blowing across the UK, sending sterling back to levels against the euro it has not seen since before Brexit” , scripted by Saxo Banque.
Sabrina Sadgui – ©2024 BFM Bourse
