1. Amazon splits up
One day, the tech giants could regret their huge success in the 2020 pandemic. With the sharply increased market share, official controls have become more intensive. Antitrust proceedings have already been initiated in the US against Google and Facebook, and Apple and Amazon will not be far behind. But there is one point that we should be aware of. Amazon founder Jeff Bezos is by far the smartest business leader in the world today. He might think, why not get one step ahead of my opponents and dissolve my empire on my own instead of waiting for my opponents to do it? The company could be split into retail because of its massive direct sales. Cloud for its business services; and streaming for his TV, e-book and music unit. Bezos was able to keep control of each of the three “baby” bazonones – and the regulatory authorities would no longer have anything to attack.
2. Mercedes and BMW merge
The big German luxury automakers were already in trouble before the Covid-19 pandemic wiped out new car sales. They were the best in the world when it came to making big, gas guzzling luxury cars. But with the rise in electric cars, Tesla has slightly dwarfed them (it’s larger than the two combined by market value), and as hard as they try, it’s too late for them to catch up now. If they want to hope for a successful transition to battery-powered and then driverless vehicles, they have to combine. The brands still have a lot of value in them, but it will cost a fortune to completely transform their businesses – and a merger is the best way to do that.
3. Switzerland is switching to Bitcoin
The Swiss franc may be one of the oldest and most stable currencies in the world, but it has also been a problem for a decade. Wildly overrated, it knocked down Swiss industry and destroyed its competitiveness. Nothing the central bank can do brings it to a standstill, and Switzerland has been officially classified as a “currency manipulator” by the US Treasury. One solution: drop the franc for something else. Switzerland will never introduce the euro. But why not Bitcoin? Switzerland was already one of the first countries in the world to give it legal status. Make it an official currency alongside the Swiss franc and many of its problems would melt away.
4. Gig workers become official
The strong job gains were all driven by the gig economy, and the fastest growing tech companies, from transportation to housing to food delivery, are geared towards temporary workers. Trying to integrate everyone into the straitjacket of labor and tax law of the 20th century will make less and less sense, especially since the Covid-19 crisis has turned almost every company into a digital company. Expect a government somewhere to have a legal category of gig workers with some of the rights and duties of a traditional worker, but with a lot more flexibility. As soon as it does, it will take off globally.
5. The FTSE 100 reaches 10,000
Given that the UK is facing one of the worst Covid-19 outbreaks in the world and is breaking away from its key trading partner, it seems a miracle that the FTSE 100 benchmark index is above 5,000. The six-digit level seems a long way off for an index still below its 1999 high. Three things could change that. Once Brexit is out of the way, much of the pessimism about the UK outlook will dissipate. The UK’s service and leisure-dominated economy has been hit hard by Covid-19, but this means it may snap back faster. And the FTSE has been dominated by blunt oil, banking, and pharmaceutical stocks. If the boom in tech IPOs continues, they may be pushed aside by more exciting, higher-growth companies (while pharma gets exciting again soon). The London stock market has been one of the worst in the world for two decades. Once investor sentiment begins to change, it happens very quickly and usually results in overshooting in the other direction. The FTSE at 10,000 may not be as fanciful as it seems.