By Fortune Staff
December 3, 2018


For much of 2018, Predicting the events of the next 24 hours—never mind a full 365 days—has felt impossible. Some days have contained a week’s worth of headlines; some months have contained more changes to the worlds of business and politics than an entire calendar of years past. Don’t expect 2019 to be any different. But do understand that while the world is changing in fundamental ways, some old lessons still hold true. Just tune out the noise. Here, Fortune’s in-house experts guide you through the biggest disruptions, innovations, and opportunities that are likely to present themselves next year.

Table of Contents

  1. The Art of the (Reluctant) Deal
  2. Beantown Booms, and Apple Wins an Emmy
  3. The Year Ahead in Tech
  4. Orange is the New Rosé
  5. Facebook Faces Existential Threats
  6. Who’s Going to Have a Great and Not-So-Great Year
  7. How We Did in 2018


1. The Art of the (Reluctant) Deal

Many of the global crises that emerged in the past two years will be partially solved by pragmatism, as the real risk of economic catastrophe serves as a wake-up call.

Illustration by Jonny Wan

Congress Starts Legislating Again
A House freed from the demands of the Freedom Caucus starts voting on some long-overdue common-ground legislation. Senate Majority Leader Mitch McConnell—who for the past two years has focused his efforts on packing federal courts with conservative judges—works with House Speaker Nancy Pelosi on spending, a farm bill, immigration reform, and an infrastructure bill that President Trump has long wanted to see on his desk. Expect a nominal concession from Pelosi on building “the wall” on the Mexican border to grease the wheels.

Brexit Gets Messier
Despite two years of negotiations, March’s Brexit deadline will approach with no comprehensive deal in sight. In a game of brinkmanship, with the stability of global financial markets at stake, both sides concede to a bare-bones deal that will cover only the most basic issues at stake, such as the border with Northern Ireland and the right to work for EU nationals living in the U.K. Despite a revolt from the right-most fringes of her party, Theresa May will win a parliamentary vote with help from the Labour Party. Any hopes for a second referendum are dashed.

MBS Rides It Out
Saudi Arabia’s Crown Prince Mohammed bin Salman—facing international pressure over the killing of journalist Jamal Khashoggi—will have his wings clipped by his father, King Salman, but will retain his position in the line of succession. His portfolio will be cut—he’ll have to take a back seat on foreign relations and defense until the Khashoggi heat dies down—and he’ll instead focus on domestic policy and economic matters.

Obamacare Plans Turn a Profit
Nearly 12 million Americans signed up for individual health plans through Obamacare last year, despite the GOP’s repeal of its requirement that everyone carry insurance. Insurers like Centene have been making big money off the health law as the overall market stabilizes, political bedlam aside. The company is offering ACA coverage in 20 states in 2019; insurance giant Cigna is expanding its Obamacare footprint; and newer firms like Oscar Health are doubling down on coverage offerings as they smell continued profit opportunity in the air.

Long-termism
The hottest assets in 2019 will be sustainably invested ones. The charge, led by Black-Rock’s Larry Fink and purpose-minded millennials, for socially responsible companies and a financial system imbued with long-termism will continue to pick up speed. The result will be 40% of professionally managed assets being invested with consideration of ESG (environmental, social, and governance) factors by the end of next year, up from 26% at the start of 2018.

Rome Comes Begging
2.3 trillion euros and rising—spirals out of control at the first whiff of a global downturn. The fall of the Italian economic system is even more unthinkable to the Eurogroup than Greece’s, and it agrees to a bailout package after Italy restructures its debt.

Trade War Gets Worse, Then Gets Better
Trade tensions between China and the U.S. continue to escalate, slowing U.S. GDP growth to 2.75% for the year. Hard-hit small businesses and farmers and the looming 2020 U.S. presidential election bring the two sides to the negotiating table, and a compromise is struck. Trump will claim a political victory in solving a problem of his own creation.

Land of Opportunity
Opportunity Zone investing—called “the most unbelievable tax break ever”—allows wealthy individuals or investment firms to park their money in any of the 8,700 underserved communities designated as “opportunity zones” for a chance to erase tax obligations. The most alluring cities for investment in 2019 will include Detroit, Los Angeles, and Atlanta. Look to these areas for higher home prices, job creation, and business launches in the next several years.


Women Take on Trump

Suzanne Kreiter—The Boston Globe via Getty Images; Chip Somodevilla—Getty Images; AP/REX/Shutterstock; JB Lacroix—Wireimage/Getty Images

The Women’s Wave will continue, and more women than men will run for the Democratic nomination for President. Expect Senators Kamala Harris, Elizabeth Warren, and Kirsten Gillibrand to be in the mix, as well as Hawaii Rep. Tulsi Gabbard. An outside run from former Acting Attorney General Sally Yates is in the offing, but Oprah Winfrey will decline.


$80

Price of a barrel of oil at the end of 2019:
Economic growth may slow, but it will be strong enough to push oil prices higher than current levels. That will be a relief for many U.S. shale producers, whose break-even costs can be as high as $60 a barrel.

2,750

S&P 500 at the end of 2019:
Trade tensions and fears of inflation will prompt multiple freak-outs, ­followed by rallies that leave U.S. stock indexes slightly lower than they stand today. See our Investor’s Guide for more.

3%

Federal funds rate: Even as economic growth cools, the Federal Reserve will raise its benchmark interest rate three times in the next 12 months, to a level last seen in early 2008.

1.5%

Growth in U.S. home prices:
Homeowners got accustomed to appreciation of 5% to 7% a year for much of this decade. But look for average prices to get flatter than a sand dollar in 2019. The culprits: mortgage costs and affordability.


2. Beantown Booms, and Apple Wins an Emmy

Who and what we’ll be watching in 2019.

Illustration by Jonny Wan

Boston in the Finals
The stars will align for Boston as its NFL, NBA, and MLB teams each make their respective finals. The New England Patriots will meet the Vikings in Super Bowl LIII. (We made the same prediction last year, but we’re sure of it this time.) The red-hot Red Sox will carry their World Series–winning ways into next season, thanks to their talented young roster. They’ll face the Milwaukee Brewers who are the surprise package of the National League. With LeBron James out of the East, the Boston Celtics finally have a route to the NBA Finals, but they’ll have to face a Golden State Warriors team who are stronger than they’ve ever been.

A New Front in the Streaming Wars
We’re already in the Golden Age of Television. What comes next? The Platinum Age? In 2019, TV lovers will finally get the added benefit of Apple’s beneficence, as the iPhone maker’s well-funded video service arrives (for free to Apple device owners, according to the latest rumors). And this won’t bomb like Apple’s last attempt at content, “Battle of the Apps.” Not with Reese Witherspoon, Steven Spielberg, Damien Chazelle, and a bevy of other Hollywood talent on board. But don’t expect any Game of Thrones–level gore. It’s strictly PG-13 fare at the House that Jobs built.

E-sport Viewership Goes Prime Time But Won’t Beat Out Cricket
A record-breaking 60 million people watched the League of Legends Mid-Season Invitational finals match this year. In 2019, expect the League of Legends World Championship to garner over 100 million viewers. In soccer, the popularity and success of the U.S. women’s national team will push global Women’s World Cup viewership over 800 million. But both will pale in comparison to the Cricket World Cup, which, while not a big draw in the States, will see a massive 2 billion viewers next year.


Rising Stars

Courtesy of Netflix

Hasan Minahj
Comedian
Netflix made a 32-­episode order for Daily Show–alum Minhaj’s Patriot Act, which debuted Oct. 28 and will run well into 2019.

Charley Gallay—Getty Images for Pandora

Lizzo
Musician
We’ll be listening to the debut album from Lizzo, who celebrates diversity—and twerking—through her music and social media.

Matt Winkelmeyer—Getty Images

Mena Massoud
Actor
This Canadian actor has been flying under the radar, but in 2019, he will be everywhere as Aladdin in Disney’s live-action remake.

Andy Lyons—Getty Images

Mallory Pugh
Soccer Player
Keep an eye out for 20-year-old goal-­scoring sensation Pugh on the front line of the U.S. team in 2019’s Women’s World Cup.


3. The Year Ahead in Tech

Amazon succeeds in yet another industry, Elon Musk delivers on a promise, while the first wave of 5G phones disappoint.

Illustration by Jonny Wan

5G Phones Fail to Ignite
They’ll be warm to the touch and download the latest Spider-Man movie in seconds. But will anybody actually want one of the new 5G-capable smartphones arriving in 2019? As with the debut of previous-generation wireless technology, early 5G adopters will be punished with short battery life and iffy reception. Better to wait it out. The first 5G iPhone is rumored for late 2020.

Tesla Delivers a $35,000 Car
The Model 3 was introduced as the so-called cheap Tesla with Elon Musk claiming a version would eventually be available for $35,000 (after tax credits). But persistent manufacturing problems blighting the upper-level Model 3 have delayed the rollout of the base rear-wheel-drive edition. Those production issues won’t disappear overnight, but they will be mitigated in 2019, and the first Teslas priced around $35,000 will be delivered to a lucky few customers.

Amazon Comes For Google And Facebook
The world’s biggest advertising companies, Facebook and Google, face a worthy adversary in Amazon whose online advertisement platform is undergoing a “meteoric rise,” according to research firm eMarketer. Amazon now represents 4.2% of the U.S. online advertising market (compared with 58% combined for Facebook and Google), but expect that to double by the end of the year.

People Start Caring About Their Data
Corporations, thieves, and spies are aslosh in your data, yes. But there is something you can do about it. 2019 is the year consumers begin to vote with their feet. Regular folks—not just privacy nuts—will adopt ad blockers, VPNs, computer webcam shutters, encryption, and password managers. Suddenly, when purchasing a new toy, you will ask: How am I being digitally used—or abused?


The Ride-hailing Front-runner Go Public

Courtesy of Lyft

As Uber and Lyft race to much-anticipated IPOs, they’ll have to work hard to sufficiently woo investors to own a piece of their business. Neither company has turned a profit—indeed, both have been losing money for years. But expect divergent outcomes: Investors will greet Uber’s IPO with a shrug owing to its high price and the company’s penchant for controversy. Meanwhile, Lyft will be viewed as an attractive proposition because of its steady gain of market share from its much-larger rival as well as its potential for rapid growth across the country from a smaller base.


Cord cutting is spreading beyond cable TV to wired Internet connections. The percentage of people relying solely on cellular Internet has risen to 20% from 8% in 2013 while the percentage with a wired Internet connection dropped to 65% from 70%. With faster wireless on the way, that home Internet line may soon seem as outdated as a pay phone.


4. Orange is the New Rosé

Eminently Instagrammable and complex in taste, orange wines will win over drinkers in 2019.

Bournemouth News/REX/Shutterstock

Rosé has been the hottest (albeit chilled) wine trend over the past few years, with no sign of cooling off as most estimates predict pink wine to grow between 1.5% and 2% over the next four years. Even so, everyone is looking for the next rosé. In 2019, expect to be uncorking a bottle of tannin-rich orange wine. No, it’s not made from oranges. A bit of a misnomer, orange wines are made from white varietal grapes that keep their skins on longer during fermentation. They’ve been popping up on wine lists in major cities nationwide as they become favorites with sommeliers and oenophiles alike.


Mergers

Sweetgreen has been on a tear since launching in 2007, with 75 locations and nearly $329 million in VC money raised to date. With murmurs of an IPO on the horizon, there could be another path to wider expansion: a friendly acquisition by a much larger brand. Consider Chipotle. Both chains pride themselves on locavore ingredient sourcing. And both have expanded nationally at a rapid clip while slinging fast food touted to be healthy. Chipotle has had a rough go of it the past few years, plagued by food safety incidents. A merger could provide the burrito chain with a fresh face (and revenue stream) and Sweetgreen with the capital to become the Starbucks of salads.


Retail

Alex Fradkin for Fortune Magazine

In the wake of Sears Holdings’ failure to emerge from Chapter 11 bankruptcy protection in early 2019, Amazon.com will come in and buy dozens of Sears and Kmart locations that will serve as new e-commerce distribution hubs and, in some cases, Amazon-branded stores.


5. Facebook Faces Existential Threats

Despite two record-setting quarters for revenue, Mark Zuckerberg’s social media behemoth had a very bad 2018 from a PR perspective. If Facebook doesn’t address these challenges quickly, 2019 could be even worse.

Illustration by Jonny Wan

Congress
One of the takeaways from the congressional hearings Mark Zuckerberg faced in the wake of the Cambridge Analytica scandal was that politicians appear more open to regulating Facebook if it continues with a lackadaisical approach to safeguarding user data. With few friends in Washington—both parties blame Facebook for negatively impacting their campaigns­—­expect a U.S. equivalent to Europe’s strong privacy laws to find bipartisan support. Government regulation, along with the fines that come with failing to comply with new laws, could end up stifling Facebook’s growth prospects.

Public Trust
Facebook’s string of bad news has hurt the company’s reputation with the American public. A recent Harris poll survey of over 2,000 Americans, conducted on behalf of Fortune, showed that people view Facebook as the least trustworthy major tech company when it comes to safeguarding user data. That image is not easily shaken. Despite a well-funded PR blitz, another privacy scandal on the scale of Cambridge Analytica could cause irreparable brand damage.

Instagram
Tech analysts consider Instagram to be Facebook’s golden child and a source of future growth as the core social networking service appears to have plateaued in places like the U.S. Even though Facebook acquired the photo-sharing app in 2012, the product direction and culture of Instagram had been firmly under the control of its founders Kevin Systrom and Mike Krieger. With that powerful duo gone as of late 2018, Facebook won’t be able to
resist meddling with the app, angering the
key under-40 demographic that makes up the majority of its users.

Europe
The social media giant will face more significant penalties for its data blunders in Europe. It’s being scrutinized for potential violations of the European Union’s General Data Protection Regulation, intended to provide more transparency to users about how companies are using their data. The company could face fines of up to 4% of its worldwide revenue.

Fake News
Although Facebook has cleaned its service of much of the fake news that ran rampant during the 2016 U.S. election campaign, it faces an uphill battle. Various media outlets and research groups are still digging up misleading or offensive content that manages to slip through Facebook’s automated systems. Human editors are as effective in solving the problem as a Danish king stopping the tide. Unless Facebook makes drastic changes in how content is propagated on its platform and shifts its business model to align with user interests, the problem will continue.


6. Who’s Going to Have a Great and Not-So-Great Year

The companies and business leaders that will thrive (or not) in 2019.

Robyn Beck—AFP/Getty Images; Aaron M. Sprecher—AP; Kevin Mazur—BBMA18/Wireimages/Getty Images; Courtesy of Chevrolet

Trending up

  • TikTok. “The adults” start using the addictive video-sharing app, a phenomenon among teens for its viral lip-synching videos. So expect it to trend down in 2020..
  • CBD.. This chemical component of marijuana doesn’t provide a high but may deliver antianxiety effects. Expect to see it popping up as an ingredient in everything from cocktails to salad dressing.
  • Elon Musk. He’ll make it through 2019 without a $20 million SEC fine, a high-profile breakup, or insults directed at cave rescuers. That counts as a win.
  • Nike. Its support for the activism of athletes like Colin Kaepernick and Serena Williams sustains the brand’s coolness with its key 18-to-40 demographic.
  • Bitcoin. Crypto-speculation cools, but it’s alt coins that fall by the wayside. Investors see Bitcoin as the safer store of value.
  • Oat Milk. It foams up better than soy milk and comes with fewer environmental concerns. Brands like Oatly, a Swedish export, will be in every coffee shop worth its beans by the end of the year.
  • Measles. The U.S. has its worst measles outbreak of the 21st century. The growing might of the vocal anti-vaxxer movement takes a devastating toll on a major metropolitan area in the Southwest.

Trending Down

  • Guns. With no chance of gun-control legislation to spark sales, a major gun manufacturer will declare bankruptcy as the industry’s Trump slump continues.
  • Weed Stocks. The appetite for cannabis stocks abates as the Justice Department starts ramping up enforcement of federal laws.
  • K-Pop. Boy band BTS’s 2018 show at New York’s Citi Field stadium proves to be the zenith for Korean pop in America.
  • Hard Seltzer. Beverage makers tried to ride the LaCroix craze by offering an alcoholic variant, but consumers will realize how bad it tastes.
  • SUVs. Higher gas prices will mean more car buyers choosing the more compact Crossover Utility Vehicle (CUV) instead of the gas guzzlers that have dominated the past decade.
  • Match Group. A lawsuit with Bumble and Facebook’s dating app will take money and market share away from the parent company of Tinder, Match.com, and OkCupid.
  • Apple. Its phones have never been better, and that’s part of the problem: 2018’s iPhone X and XR are so good that there’s little incentive to upgrade to their successor in 2019.


7. How We Did in 2018

On Target:
We correctly predicted several side effects of a boom, including that the Fed would raise its benchmark rate four times in 12 months and that a hot stock market would fuel an IPO resurgence. We forecast that Lyft would seize more market share than expected from reputationally challenged Uber. In sports, we called the ascendancy of Olympic snowboarder Chloe Kim and the NBA’s Giannis “the Greek Freak” Antetokounmpo.

In the Ballpark:
Fortune foresaw a just-okay year for the stock market: The S&P 500 was up 6.6% at press time. We called two of the year’s three biggest business-related Supreme Court rulings. And we correctly sent the Patriots, Dodgers, and Cavaliers to the finals of their leagues.

Off the Mark:
We lowballed oil prices, predicted that U.S. GDP wouldn’t crack 3%, and divined that charitable donations would shrink Warren Buffett’s net worth (instead, he got $5.2 billion richer). And contrary to our forecast, neither Katy Perry, Peter Thiel, nor any other celebrity tourist was blasted into space.

Crystal Ball Contributors:
Daniel Bentley, Erika Fry, Robert Hackett, Matt Heimer, Rachel King, Polina Marinova, McKenna Moore, Sy Mukherjee, Aaron Pressman, Lisa-Marie Segarra, Lucinda Shen, Jonathan Vanian, and Phil Wahba.

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This article originally appeared in the December 1, 2018 issue of Fortune.

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