U.S trade with China will improve, the U.S. will see as many as 10 successful vaccines and the Justice Department will soften its case against Google (GOOGL) - Get Report and Facebook (FB) - Get Report in 2021, predict Blackstone (BX) - Get Report executives Byron Wien and Joe Zidle.
The pair, who are vice chairman and chief investment strategist in private wealth, respectively, at Blackstone, issue their list of Ten Surprises every year and 2021's predictions include "surprises" that coincide with the Presidential election results.
Wien, who started this tradition in 1986 when he was the chief investment strategist at Morgan Stanley, defines a "surprise" as a prediction that the average investor would give only a one out of three chance of taking place, but that he believes has a greater than 50% chance of occurring. Wien brought the practice with him to Blackstone in 2009, and in 2018, Zidle began working on the list with him.
Among this year's top surprises are that the success of between five and ten vaccines, together with an improvement in treatments, "allows the U.S. to return to some form of 'normal' by Memorial Day 2021. People are generally required to show proof of vaccination before boarding airplanes and attending theaters, movies, sporting events and other large gatherings."
Meanwhile, the U.S. Justice Department will soften its stance against Google and Facebook because the former will be "persuaded by the argument that the consumer actually benefits from the services provided by these companies. Certain divestitures are proposed and surveillance restrictions are applied, but the broad effort to break them up loses support, except in Europe."
In addition, U.S. trade with China is expected to strengthen as "President Biden begins to restore a constructive diplomatic and trade relationship with China. China A shares lead emerging markets higher," according to Wien and Zidle.
The pair is also predicting other surprises such as the 10-year Treasury yield rising to 2% and the dollar rebounding. And one of their three 'also ran' surprises, which are either less relevant or less probable than their top 10 predictions, is that Tesla (TSLA) - Get Report will acquire "a major global auto manufacturer in a transaction that involves a combination of cash and stock."
Blackstone shares fell 2.79% to $63 on Monday.