I did some predictions last year for 2023, which turned out to be mostly correct. So I thought I’d give it a go again this year!

The Economy

Equity markets will rise 15-20% in 2024, with a flat first half and a strong second half

To be clear, my benchmarks here are primarily the US markets, with the ETF’s SPY and QQQ. After last years meteoric rise, I think early 2024 will see a pause to the rise, with a strong second half. SPY will be up 15-20%, and QQQ will slightly underperform the SPY this year, reversing roles.

US will cut rates in 2024, starting end of Q2

This is probably in line with most predictions. But I think we’ve seen the end of inflation, baring any big shocks. The Fed will cut rates late in Q2, as economic data starts to soften as a consequence of the steep rises. Rates will end the year lower than at the start of the year.

Tech lay-offs will continue to taper off

Tech layoffs are mostly done. We’ll continue to see job losses in VC funded companies of 2020-2022 vintages going bust. Use layoffs.fyi to judge me at the end of the year. Those struggling to get jobs will slowly start to see an improvement, but juniors will continue to struggle to get hired throughout 2024. An improvement, but hardly back to the boom of 2021.

There will be no WW3

Israel-Palestine is a tragedy, but also very much a local conflict. The neighbouring countries have shown little interest in getting involved. China likewise will continue to huff and puff regarding Taiwan, but their problems at home will keep them too busy to do anything. Russia-Ukraine has ended up being a meatgrinder for both countries, but the net result will be a stalemate. Russias demographics, combined with war losses, means they will be a spent force as a super-power. At worst, they will be a North Korea of eastern Europe.

Trump wins the US presidency

I really, really, hope I am wrong on this one. But unless the Democrats put someone else than Biden as their candidate, and it seems they won’t, this seems inevitable. Bidens cognitive decline is unfortunately there for everyone to see, and Trumps popularity seems to have seen a resurgence. It is very unfortunate we are going into a 4th decade of Presidents born in the 1940’ies in the US (since Clinton in 1992, with only a break for Obama). The US needs younger, forward-looking candidates on both sides. Instead will see two octogenarians duke it out over past grievances, real and imagined.

Tech

Improvement of AI will slow down

Without further scientific breakthroughs, the improvement of AI will slow down. We will come to a few realizations:

• Large Language Models (LLMs) are effectively compressed search- and summarization engines with a propensity to hallucinate. Their generalisation capabilities are limited, and as we add more compute and parameters, they will all converge on the same answers.
• Multi-modal models are the next big thing: specialised sub-models and routing between them will yield the remaining improvements.

We’ll see the embers of a new software boom towards the end of 2024 thanks to AI

AI Copilots will make software development cheaper. This will create a boom in software development, as previously uneconomic projects become viable. Ironically, this will increase demand and pay for software developers over the long term (past 2024).

Usurious SaaS pricing will see pushback

Datadog, Slack, and many other SaaS companies have what can only be described as usury pricing practices: they charge per user, or resource, when the cost to serve per additional user or resource only keeps dropping. Customers are starting to get clued up to this, especially in a climate of frugality after ZIRP. Companies that continue to see their customers as cashcows to be milked for little additional value, will start seeing their pipelines dry up.

The last crypto-shoe has not dropped

Crypto did kind of die with a wimper last year, but Bitcoins price has made a resurgence. For crypto in general, I think this is a dead-cat bounce: 15 years on, the lack of practical use-cases outside of gambling, money laundering and speculation is eye-catching. Bitcoin will probably live on as a small cult, with prices supported by low trading volumes. But the last shoe has not dropped yet: I reckon we’ll see the start of criminal proceedings and the collapse of at least one more big-name player in the space.

That’s it for me, it’s a mixed bag of positive and negative predictions. Let’s see how I did at the end of the year!