Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
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OP 2019: X-class solar flare creates chaos and inflicts $2 trillion of damage
John J. Hardy
Chief Macro Strategist
Chief Macro Strategist
Summary: As reliant as we are on modern communications technology, this pales in comparison to our reliance on the sun. When it misbehaves, the consequences are severe indeed.
For the full list of Saxo's 2019 Outrageous Predictions, click here.
All life on earth exists thanks to the stable bounty of energy hurled our way by the
sun, but Sol is not always a serene and beneficent ball of burning hydrogen. As solar
astronomers are well aware, the sun is also a seething cauldron of activity capable of
producing incredible violence in the form of solar flares, the worst of which see the
sun vomiting actual matter and radiation in the form of Coronal Mass Ejections, or
CMEs.
Previous swarms of flares and their associated CMEs, called solar storms, have
disrupted radio and satellite communications as well as ground-based power
transmission infrastructure in the past. The most powerful know n solar flare was
the 1859 Carrington Event, an estimated X40 class flare that lit up the earth with
a massive aurora borealis that could be seen as far south as Cuba during the day
(X-class flares are the most powerful class of flares and an X40 flare is 40x more
powerful than the minimal X1 flare).
The early telegraph equipment of the time was largely rendered inoperable; in other
cases, it could still be used even though turned off. In the summer of 2012, the earth
got lucky when it missed a giant, multi-X-class flare by a matte r of a weeks as its
associated CME washed across the earth’s orbital path a week after the earth had
transited (flares are directional and only last a matter of hours).
In 2019, as Solar Cycle 25 kicks into gear, the earth isn’t so lucky and a solar storm
strikes the Western hemisphere, taking down most satellites on the wrong side of the
earth at the time and unleashing untold chaos on GPS-reliant air and surface travel/
logistics and electric power infrastructure.
The bill? Around $2 trillion, which is actually some 20% less than the worst-case
scenario estimated by a Lloyds-sponsored study on the potential financial risks from
solar storms back in 2013.
Quarterly Outlook
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Quarterly Outlook
Equity Outlook: Will lower rates lift all boats in equities?
Peter Garnry
Chief Investment Strategist
After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto... -
Quarterly Outlook
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Charu Chanana
Chief Investment Strategist
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Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
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Quarterly Outlook
Commodity Outlook: Gold and silver continue to shine bright
Ole Hansen
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Quarterly Outlook
FX: Risk-on currencies to surge against havens
Charu Chanana
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Quarterly Outlook
Equities: Are we blowing bubbles again
Peter Garnry
Chief Investment Strategist
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Quarterly Outlook
Macro: Sandcastle economics
Peter Garnry
Chief Investment Strategist
Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p... -
Quarterly Outlook
Bonds: What to do until inflation stabilises
Althea Spinozzi
Head of Fixed Income Strategy
Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ... -
Quarterly Outlook
Commodities: Energy and grains in focus as metals pause
Ole Hansen
Head of Commodity Strategy
Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...
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