This has been a wild year for those following the stock market. We've seen new record highs, oil crumble in a matter of months, and the U.S. economy power along, driven by new innovations that seemed impossible just a few years ago (think electric vehicles, solar energy, and Uber).
Next year will surely bring its fair share of surprises as well, so we've rounded up a few predictions about what could happen in 2015.
Travis Hoium: My wild (but very realistic) prediction is that China will cause a market crash in 2015.
Not nearly enough people appreciate the risks bubbling up in the Chinese economy. The central government has used its control of four state-run banks to fuel economic growth over the last decade, and I think the bubble will burst in spectacular fashion ... eventually. I believe we'll see the bubble at least begin to burst next year, and the government will scramble to increase high-quality lending, boost the economy, and prop up its markets. Wall Street will still crash because China is seen as the one country where economic growth will never end, and a crack in that thesis will roil markets.
China is not exactly transparent with its economic and lending data, but a number of analyses show the alarming credit trend. According to CEIC, total social financing, a measure of bank loans and shadow banking, has grown from 140% of Chinese GDP in 2009 to 200% of GDP today. Stephen Green at Standard Chartered said earlier this year that China's total social financing-to-GDP ratio was already at 251%. When compared to the U.S.' 260% debt-to-GDP figure, this might seem low, but the U.S. has the world's reserve currency and its most stable economy, so it can handle a higher debt load than China.
A few risks could cause China's growing credit bubble to burst. Real estate prices recently turned negative, economic growth is slowing, and China's government is trying to rein-in risky lending that led to the credit boom in the first place. If these factors cause consumers and businesses to lose confidence and asset prices fall, the drop in credit markets could be dramatic. It could be the 2007-2008 U.S. credit crunch, China style.
Like predicting the financial crisis of 2007 and 2008, it's impossible to predict how China's credit bubble will burst (or deflate), how it will impact the global economy, or when it will happen. I just think something bad is looming in China, and the market will take a beating when it comes to light.
Steve Heller: Looking into my 3D-printed crystal ball, I predict 3D printing company profits will be difficult to come by in 2015, in spite of strong industry growth rates.
According industry insights firm Wohlers Associates, the 3D printing industry is expected to grow by over 31% per year compounded through 2020, and eventually to generate more than $20 billion in annual revenue worldwide. This robust industry growth trajectory can make investors salivate over the prospect of owning 3D printing stocks, but let's be clear: To date, robust industry growth has yet to show up on the bottom line -- in the form of profits -- for many publicly traded 3D printing companies.
Granted, established players such as Stratasys and 3D Systems (NYSE:DDD), which together represented about one-third of worldwide 3D printing revenue in 2013, have undergone rapid investment phases that have depressed their profitability in the short term. While this implies profitability is on the horizon for Stratasys and 3D Systems once their pace of investment normalizes, investors should keep in mind that this promise is not guaranteed for either company, or for the industry at large. After all, 3D printing's attractive growth potential has attracted lots of new competition -- Hewlett-Packard included -- and could create pricing pressures and other difficult-to-manage headwinds that sap future profitability potential for industry players.
The fact that 3D Systems is the only major 3D printing company to consistently turn a profit on a generally accepted accounting principles basis in recent years could indicate that profits in this industry are not currently as easy to come by as revenue. This could prove problematic over the long term, because profits will eventually determine if a 3D printing company is a sustainable long-term investment. In the meantime, investors should not get too caught up in the excitement around 3D printing's impressive growth potential.
No, it's not going to be some crazy new recall scandal. It's going to be a big push forward in technology, one that will surprise a lot of folks who don't watch the auto industry closely.
I'm not sure exactly what form it will take. But it's my job to watch the auto industry closely, and I have been struck lately by the relentless flow of hints that big things are brewing at GM behind the noise of the recall mess.
Here's what we know: Between now and mid-April, we'll see an all-new Chevy Volt that is expected to be a significant leap forward in technology, as well as a big, plush new Cadillac sedan that seems likely to incorporate some of that technology. (Yes, GM has confirmed that the big new Cadillac will be a plug-in hybrid.)
There's more. CEO Mary Barra said in September the company would have its Super Cruise system -- that's a self-driving car, folks, at least under some circumstances -- ready for production in time to put it in a 2017 model. And GM is known to have advanced electric cars under development -- likely advanced enough to give Tesla Motors (NASDAQ:TSLA) a run for its money before long.
But I think GM hasn't told us everything yet, and believe the General is going to drop a technological bombshell (or two) next year that will jolt the industry.