Economists predict cooling of the U.S. economy
Numerous recentÂ predictions point to real GDP growth slowing from 2018â€™s peak of 3.1% to 2.4 % in 2019. Analysts from Goldman Sachs predict US year on year growth to be around 2.7% for consumer spending, Residential fixed investment at -1.3%, business fixed investment at 4.2% and 3.8% growth for Federal spending.
In general, a slowing economy means fewer companies will invest in growth projects, innovation or new ventures and focus on stability and paying down debt or re-structuring.
For the global economy, the Conference Board will grow 3.1%Â in 2019 but GNP growth will slow in key markets. Europe is predicted at 1.9% and Japan only 0.9%.
U.S. – China relations remain tenuous
The Trump administration has demonstrated a pattern and incompetence of making dramatic announcements (usually via Twitter or poor PR stunts off the cuff) to establish a strong platform for negotiations. The stock market has been rocked overÂ constantly renewed fears about the tariff negotiations as it seems no one will win from the stalemate. Next year will be interesting to see how it plays out and if a â€śtrade war truceâ€ť is realistic or if tariffs represent the long-term trade policy of the U.S as per Trumpâ€™s election manifesto.
On the ground, U.S. manufacturers have grown wearyÂ of Chinaâ€™sÂ currency manipulation and general instability.Â Cyber attacks are real and a continual threat to national security. As the trade war continues to plague the economy many manufacturers are considering options including India, Thailand and Malaysia. Some rare good news was the recent signing of the U.S.-Mexico-Canada Agreement boosting sentiment and real-world prospects for many. As it stands now, U.S. companies will not only struggle with exports to China but in mature economies around the world is a unilateral resolution is found.
Central Banks keep interest rates low
There is uncertainty about the degree of rate hikes by the Federal government in the U.S. and this was evidenced by the stock market volatility globally. As a rule, across most financial analysts interest rate hikes are predicted. In brilliantly simple terms it means money will cost more to borrow. A debt will cost more to service and, in theory, investment will be slower as borrowing money to grow will be more expensive and harder to raise.
Europe and associated nations will stay in the unknown
Brexit aside which will still rumble on until an agreement is reached (if at all), there are several factors that will cause change at the very least. It seems Merkel in Germany will serve her last term, Teresa May wonâ€™t run for re-election, whenever that will be (itâ€™s expected she will go sooner). Once a framework for Britain to leave the EU is agreed, the real negotiations will take place in more intimate detail. This will serve the media and more uncertainty and conjecture â€“ however, it won’t all necessarily be bad.
Further afield, Italyâ€™s budget crisis has cooled in recent weeks but is still there and needs addressing on a more long-term basis. No doubt Brexit will trigger uncertainty but more elections and cooling global growth expectations will affect Europeâ€™s greater decisions.
Oil prices will (and need) to stabilize
The last 3 years have seen a 300% increase but in the last 3 months have seen a drop in value by 30%. This is enough be compared to the times of the great depression of the 1930s. Initially, there was a positive sentiment around the U.S. exiting the Iran nuclear deal, but oil prices should settle into a normal and predictable range for 2019. The U.S. Energy Information AdministrationÂ seesÂ per-barrel prices in the mid-$70s which is around the sweet spot for most associated industries to function effectively.
For the wider energy sector, globally, many coal plants will close in the next 24 months as natural gas volume continues to expand. The cost of energy should be more predictable in the days ahead but potentially more expensive as consumption continues its gradual upward trend.
Stable coins will although boring will replace ICOs
We had a crack at making 2018 predictions and stability coins were our no.1 2018. However, we reserve the right to roll over our prediction to 2019, subject to the technical and regulatory necessities to be passed. Thankfully, 2018 killed the ICO and rightly so and it wonâ€™t be returning. Now, the increased legal and compliance costs of holding an ICO, which now average around $1 million, have put paid to the vast majority of initial coin offerings.
The growth of security tokens are moving overseas more and more to territories like Malta and Gibraltar, where regulatory frameworks have been drawn up but slow progress is expected in the U.S. The SEC is dragging its heels but until certainty is provided with all new projects are stuck in limbo.
The year of the Decentralized Credit Network
We are a big fan of how a decentralised network can be applied to everyday life and especially business.Â For those networks, huge progress has been made in infrastructure development. The tools necessary to facilitate collateralized loans, social credit and open finance have been fine-tuned and proven to work. 2019 will see this progress soon put into action and some sort of reasonable scale.
These assets, non-crypto or crypto will be built up with more users, applications and usage all within a decentralised network.
Non-financial things to watch out for
5G â€“ coming to a place near you soon
Telecoms continues to grow and evolve and 5G could be the technology of the year in 2019. 5G, is another level ofÂ processing speeds by up to more than 10 times. In fact, 5G is so important that China, South Korea and the U.S. are embroiled in an arms race to be first to market and eventually it’s going to filter down to the consumer at an affordable price. Phones and consumable tech products like drones are being built in anticipation of the change.
Your customer service robot will see you now
Research from Gartner, Inc. a global technology, publishing and consultancy company shows that the use of chatbots in customer service will be 10 times greaterÂ by 2020, and bots can reduce customer inquiries by up to 70%. Although clinical and potential unhelpful and frustrating if the technology fails, you will feel less guilty about yelling at a robot regarding your lost delivery.