And we thought predicting 2019 was difficult! Every year, the editors and writers of Fortune take on the unenviable task of predicting the year ahead: in business, the economy, politics, technology, and pop culture. And 2020 presents us with plenty of major events to navigate. The specter of recession is creeping in the shadows for the first time in more than a decade. An election of generational importance will shape America’s future. And an Olympic Games will hopefully provide a much-needed summer distraction. It’s going to be a wild one, so hold on tight and let the collective wisdom of Fortune be your guide.
The Economy, Markets, and Business
Brace yourselves. Turbulence is coming to the world economy, but don’t expect a 2008 redux.
The next recession won’t be as bad
We’re now in the longest expansion in American history. But all good things must come to an end, and after the Great Recession, you might be bracing for catastrophe. Stanford economist Matthew Jackson has even floated the Forest Fire theory: that long expansions produce lots of marginally productive “deadwood” relationships that go up in flames when a recession hits, making the downturn worse. But a recent study from the Cleveland Fed found no historical evidence that long expansions produce deep recessions. So—barring another unpredictable shock—there’s no reason to think the next recession will be as bad as the last one.
Wealth management won’t save banks
2019 will go down as the year of the layoff in the banking sector. More than 50,000 of them. Deutsche Bank, HSBC, Banco Santander—recognize something? They’re mostly European—all announced sweeping job cuts this year as negative interest rates, stalled economic growth, and competition from the fintechs all bit into the business. To jump-start revenues and profits, the big retail banks instituted a turnaround plan that involves upselling clients on insurance and investment products and wealth management services, all of which carry fat fees. Can this pad their bottom lines and halt the downsizing in 2020? Don’t bank on it.
Central banks push for greener business
Financing fossil-fuel projects is about to get a lot harder—largely due to central banks. Many of the world’s best-known banks have already spoken out, warning that climate change is a risk to financial stability. Commercial banks will be forced to follow their lead, resulting in tighter financing and more requirements for companies to disclose their exposure to climate change.
Negative interest rates go mainstream
There’s nothing more bizarro in economics than the emergence of negative interest rates. In Japan and throughout much of Europe, the benchmark deposit rate is below zero, punishing savers and rewarding borrowers. This paradox has spread to the bond markets as well, pushing many yields to zero or lower. When Germany saw the rates on its two-, 10-, and 30-year bonds, or bunds, all sink for the first time into negative territory this year, investors gulped hard, wondering, Could that happen here? In the U.S., economists think the direction of the Fed funds rate in 2020 is more likely to go down than up but stay above zero. (Fortune predicts one fat rate cut, bringing it to 0.75% to 1.0%.) In Brexit-hit Britain, anything’s possible. In underwater Europe, negative rates are here to stay for 2020 and beyond. They may even go lower. Que c’est bizarre!
Tesla raises money … again
With 2019 revenues through September up 20.8% and $5.3 billion in the bank, Tesla looks bright. But $1.6 billion of the cash came from borrowing; $5.3 billion in long-term debt comes due from 2021 to 2025; and $1.4 billion in contractual obligations hit through 2022. Revenue was up 21%, but gross margins dropped to 16%, and even a surprise third-quarter profit left the first nine months with a $967 million loss. Add growing competition, and the electric-auto maker will need to hit an ATM.
A retail switcheroo
Call it the department store do-si-do. Saks Fifth Avenue owner Hudson’s Bay will finally succeed in going private. It will then spin off its Canadian namesake chain, use the money to buy Neiman Marcus, and merge it with archrival Saks. After that, it will close a third of each banner’s stores to reduce overlap, take the resulting luxury department store powerhouse public, and use the IPO proceeds to pay down Neiman Marcus’s enormous debt.
VSCO girl’s impact
Whether or not “VSCO girl”—a teenage girl who enjoys oversize T-shirts, Hydro Flask water bottles, backpacks, and Birkenstocks—is a real thing or not, she highlights some actual consumer trends among Gen Z. Named after the popular photo-filter app VSCO (pronounced “viss-koh”), she could negatively impact sales of traditional makeup and give a boost to natural cosmetics like those from Clorox-owned Burt’s Bees and New York brand Mario Badescu.
$60: Barrel price of oil at end of 2020
2020 will bring yet more oil, from Texas to off shore rigs in Norway—but the world simply won’t need it. As economic growth slows, so, too, will demand for oil—and any geopolitical shocks will cause only temporary spikes.
3,200: S&P 500 at the end of 2020
It’ll be a tug-of-war 2020 for U.S. stocks. Lackluster earnings growth will restrain share prices, while low interest rates and promises from a reelection-seeking President offer the occasional upward shove.
37: Women CEOs in the Fortune 500
The number of women at the helm of Fortune 500 companies currently stands at 35, a historic high for our index. We expect that number to increase as a push for board diversity leads to more women getting the top job.
Who Will They Pick for VP? (Given the Opportunity)
Stacey Abrams became a national sensation in 2018 when she ran an attention-grabbing but unsuccessful campaign for Georgia governor. Since then, the progressive Democrat has made it exceedingly clear that she’s willing to take up the role of VP, if anyone is offering. A young African-American woman who knows the South alongside Biden’s Wall Street/Rust Belt appeal would make the pair a force to be reckoned with.
Publicly, Elizabeth Warren may be duking it out on the debate stage with Julián Castro, but privately she’s been known to text the former Obama official words of encouragement. Castro’s strengths counterbalance Warren’s weaknesses: He’s young, Texan, Hispanic, and has centered his campaign around immigration reform. Castro says he’s not interested in being Vice President, but don’t they all?
Bernie Sanders isn’t looking for a VP to moderate his views or even him out, and he doesn’t need help with name recognition. That’s why his campaign’s national cochair, former state senator from Ohio Nina Turner, is a good bet. Known for her fiery and passionate speeches and media savvy, this rising star could help secure the Midwest and African-American votes for Sanders. She’s nearly 30 years his junior, which doesn’t hurt either.
Despite whispers out of 1600 Pennsylvania Ave. that President Trump would love to replace Mike Pence on the ticket with his former UN Ambassador Nikki Haley, the truth is he can’t. Pence is well-liked among Republicans on Capitol Hill and is a vital buffer while impeachment is on the table.
The Tech Forecast
How technology will shape everything from civil life to politics and culture.
Facebook kills Libra
When Facebook announced a global cryptocurrency called Libra last June, the company said it would launch in early 2020. Now those plans are in disarray as partners flee and regulators heap scorn on the scheme. In the new year, look for Facebook to throw in the towel on Libra—and launch Leo, where Instagram users can trade kitten photos for cash.
Protesters’ new tools
As demonstrations around the world grow over political and environmental issues, protesters increasingly take measures to evade the facial-recognition technology that has been spreading in recent years. Some use old-school scarves or umbrellas, but others turn to more innovative tools—fashion and makeup designed to confuse image-recognition systems and masks that make the protester look like a different person.
Piracy makes a comeback
Netflix, Disney, Apple, Hulu, HBO, and even CBS all have their own streaming services. And they each cost anywhere from $5 to more than $15 a month. With each putting out “must-see” TV, the cost along with a requisite Internet connection will become too much for some cord cutters. Expect many more people to return to a bad habit from the past: piracy. 2020 will see an uptick in “sharing” of copyrighted TV shows as consumers get streaming subscription fatigue.
More hardware indies get acquired
A few weeks before Thanksgiving, Google announced plans to gobble up struggling hardware maker Fitbit for $2.1 billion. That takes the long-suffering maker of eponymous fitness gadgets off the market (and at a cost more than 60% below its 2015 IPO price). But there are several more indie device makers in the same boat that Fitbit was in—and they’re up for grabs. Action-camera maker GoPro and security-cam maker Arlo Technologies both trade 80% below their IPO prices, with the market valuing each at less than a single year’s sales. Expect both to be snapped up in 2020.
Election hackers get nabbed
Unlike in 2016, America in 2020 won’t be caught flat-footed by hackers and chaos agents during the presidential election. The threat of foreign interference persists, of course, and government officials continue to warn the public to be on the lookout for meddlesome disinformation campaigns and other attempts at subterfuge by the likes of Moscow, Beijing, and Tehran. But U.S. law enforcement, intelligence agencies, and tech corporations have learned from past mistakes. States are improving their ballot defenses with help from congressional funds and Department of Homeland Security technical support. The FBI is ready to name and shame bad actors. Facebook and Twitter periodically purge perfidious propaganda-bots. And U.S. Cyber Command has already begun testing more active tactics—a “defend forward” strategy—that blunted adversaries during last year’s midterm elections, which mostly, reassuringly, went off without a hitch.
A podcasting ad squeeze
It may not seem like it, but Squarespace, Casper, and the dozens of direct-to-consumer brands selling everything from underwear to dog treats don’t have unlimited ad budgets. Expect your friend to close shop on his Gilmore Girls podcast as the dollars dry up.
Investors agree
WeWork’s IPO didn’t work. But don’t write off the real estate tech space altogether. Expect Amazon—which already knows a thing or two about acquiring property—to launch an AWS for office space and take over some of cash-strapped WeWork’s pricey leases.
The World in Motion
With institutions like the EU and NATO waning in influence, expect a new order in 2020.
A second Arab Spring will emerge
A second Arab Spring will seek to finish dismantling the authoritarian systems that survived the regional revolts nearly a decade before. Energy from late-2019 antigovernment protests in Egypt, Lebanon, and Iraq will spread to the rest of the Middle East. Once activists succeed in Egypt, demonstrations will follow in other countries with weak economies, like Morocco and Jordan.
Angela Merkel’s coalition collapses
Germany’s ruling coalition of Angela Merkel’s center-right CDU and the center-left SPD collapses, as the SPD’s struggle for relevance forces it to assert itself against conservative policies. An election sees the Greens, who have been peeling voters away from both parties, supplant the SPD as the main counterweight to the CDU—perhaps even becoming the leaders of the next coalition.
Lion economies start roaring
With Africa’s largest economy, Nigeria, joining the African Continental Free Trade Area in 2019, a decade of rapid economic expansion will kick off for the continent in 2020. The 54-country trading bloc will attract foreign investment, particularly from China, but more important, local economies will boost intra-Africa trade, which currently accounts for only 17% of the African Union’s export activity. With nearly half of Africans expected to live in cities by 2030, and with a working population around triple that of the European Union, expect Africa to assert its influence beginning next year.
Lam out in HK
It doesn’t seem as if Hong Kong Chief Executive Carrie Lam will last much longer in the job. In September, Lam was caught on tape telling a group of business leaders that she would quit if the leadership in Beijing permitted her to. When the protests end, Beijing will want to get a firmer grip on Hong Kong. A weakened Lam will be squeezed out.
A Pelosi successor emerges
The House Speaker turns 80 in 2020, and she’ll start grooming a replacement to secure her legacy. Majority Leader Rep. Steny Hoyer (D-Md.) is a safe pair of hands, and Rep. Sean Patrick Maloney (D-N.Y.) would make history as the first openly gay speaker, but our money is on campaign committee chairwoman Cheri Bustos (D-Ill.).
Polling error
No one got more of a shock in 2016 than the pollsters. Whether response bias, pollster bias, or lying respondents were to blame, the industry as a whole got it dead wrong when it came to predicting the outcome of the presidential election. Despite attempts to make surveys more representative, adjust weighting, and tweak methodologies (most are still conducted by landline), the polls will be wrong again. Pundits will say pollsters focused on the wrong thing, putting too much weight on the non-college-educated white voters who helped elect Trump in 2016. Maybe the “wrong things” we’re focusing on are polls themselves.
The Roaring 2020’s
The first year of a new decade sets the cultural tone for the next 10. These are the stars, trends, and pop culture moments Fortune is predicting for greatness in 2020.
Tyler Perry conquers the (entertainment) world!
Viacom may have lured writer, director, producer, and actor Tyler Perry away from Oprah’s OWN with one of the most lucrative megadeals in history, but it’s Viacom-owned BET and the public that will reap the rewards. Expect more than just Madea; Perry is launching original programming, amplifying overlooked talent, and giving BET+—a new premium streaming service—a serious competitive edge.
Flappers and jazz
Get ready, old sport. The ’20s are back for 2020. In the centennial of the era of F. Scott Fitzgerald, prepare for Great Gatsby–inspired ad campaigns, parties, and playlists (“Green Light” by Lorde, anyone?). Marketers will do all they can to ensure the decade kicks off with a roar.
Who run the world?
Simone Biles has already cemented her place as the most decorated gymnast of all time, but the 22-year-old isn’t slowing down yet, as she’s poised to defend her crown in Tokyo in the women’s all-around competition. Expectations are equally high for Katie Ledecky, one of the world’s top swimmers amid a deep bench for the U.S. swim team. And the U.S. Women’s National Team is still riding high after winning the 2019 World Cup, but they’ll be in comeback mode on the Olympic soccer pitch after a disappointing fifth place finish in Rio.
Tale as old as time
If history is a guide, there is nothing Academy members love rewarding more than a movie about their industry. (See Argo, La La Land, The Artist.) So this awards season, keep an eye on Quentin Tarantino’s Once Upon a Time in… Hollywood for Oscars glory. Not only does the ninth film from the unconventional director have a solid shot at Best Picture, but Tarantino could finally garner a win for Best Director.
Keeping Up With the Conways
She’s a top adviser to the President, and he can’t stand the guy. With West Wingers reaching for—or dancing with—the stars, we expect Kellyanne Conway and her husband, George, to stop airing their grievances on Twitter, opting instead for a starring role in their own piece of Mark Burnett-produced reality TV.
Rising Stars
Christian Pulisic, Chelsea FC & U.S. Men’s
The 21-year-old American’s goals will help Chelsea finish second in the English Premier League.
Lashana Lynch, British actress
You’ll be seeing her as “Nomi,” an agent who inherits the 007 moniker in the 25th James Bond movie.
Smino, rapper & singer
This St. Louis native combines skillful rhyming with melodic singing wrapped in a neo-soul package.
Rosalía, singer
Brush up on your Catalan. Barcelona-born flamenco artist Rosalía will make the crossover in 2020.
Taxes Are In, Almonds Are Out
What’s on the up—and what’s no longer cool—in 2020.
Trending up
Bananamilk. Not banana milk, but Bananamilk. The latest faddy plant-based milk is made with bananas, sunflower seeds, and cinnamon. And, yes, it tastes like bananas, if you were wondering.
Nuclear power. The 2019 HBO series Chernobyl reminded us all of the devastating consequences of a nuclear accident. But demands for low-carbon energy and the endorsement of Bill Gates will see more countries exploring new, safer reactors.
Wealth tax. Regardless of who wins the Democratic nomination, the notion that the wealthiest should give more back to the country will gain traction in the party. But enough Democratic billionaires will run for office to quash it.
Houseparty. This video group-chat app aimed at teens was acquired by Fortnite-maker Epic Games earlier this year. Rather than make video calls, users can drop into video chats when their friends are online.
Profits. Wall Street gets more conservative, with traders putting their money behind companies that, shockingly, actually make money.
Disney. Bob Iger’s bet that owning blue-chip franchises and intellectual property will win the digital content wars pays off. In comparison, Hulu, Netflix, and Amazon are bringing knives to a lightsaber fight.
Trending down
Almond milk. Like soy milk before it, buyers of nondairy milks will abandon the watery and tasteless almond milk, flocking instead to the more pleasing texture of newer alternatives.
Natural gas. The U.S. has a glut of natural gas from the shale boom, but trade tensions have hampered demand. Prices, already at historic lows, will sink further.
Philanthropy. Political writer Anand Giridharadas’s crusade against philanthropy—he argues governments, not billionaires, should be spending that money—will gather momentum.
TikTok. With the New York Times dissecting every meme that pops up on the video-sharing app—killing “okay, boomer” in a matter of days—it won’t be long before teens flee to pastures where their parents and reporters can’t spoil things.
Late-stage valuations. The WeWork IPO disaster will ripple through the private capital markets, with late-stage valuations being brought back to reality.
Netflix. Stranger Things and The Crown have to do the heavy lifting in a content catalog that was once prestige but is now increasingly padded out by low-cost reality television.
How We Did in 2019
On Target
Forecasting the year’s hottest pop stars is not Fortune’s bread-and-butter, but last year we tipped a little-known Lizzo for greatness in 2019. On our core beat, we predicted a strong year for Nike, Obamacare plans turning a profit, and the trade war escalating through 2019 before a tentative breakthrough at the end of the year.
In the ballpark
Tesla would have delivered a $35,000 car were it not for a federal tax credit being halved in 2019—but we weren’t far off at $39,000 for a base Model 3. We also saw a turbulent year for Facebook but incorrectly predicted it would impact Instagram.
Off the mark
We correctly predicted the New England Patriots would make it to the Super Bowl (they won), but we were overly bullish on the Boston Red Sox, who missed the postseason. We thought the S&P 500 would have a down year, but barring catastrophe, it will finish 2019 at or near record highs. And we put too much faith in Capitol Hill’s ability to pass a bipartisan infrastructure bill.
Crystal Ball contributors:
Eamon Barrett, Lydia Belanger, Daniel Bentley, Scott DeCarlo, Katherine Dunn, Nicole Goodkind, Robert Hackett, Matt Heimer, Emma Hinchliffe, Rachel King, Ellen McGirt, Jake Meth, David Meyer, McKenna Moore, David Z. Morris, Aaron Pressman, Jeff John Roberts, Lucinda Shen, Anne Sraders, Phil Wahba, and Bernhard Warner
This article originally appeared in the December 2019 issue of Fortune.
More must-read stories from Fortune:
—Why Trump is bad for business
—In the wake of Brexit, Amsterdam is the new London
—Saudi Aramco being crowned world’s biggest IPO hinges on the “greenshoe”
—A roundtable of investing experts share their best advice for 2020
—These are the jobs artificial intelligence will eliminate by 2030
Subscribe to Fortune’s Eye on A.I. newsletter, where artificial intelligence meets industry.
