Michael Cembalest, JPMorgan Asset Management's market and investment strategy chair, accurately predicted President Joe Biden's withdrawal from the 2024 presidential race. Cembalest's forecast appeared in his "top 10 possible surprises for 2024," published in the January 1 "Eye on the Market Outlook."
"President Biden withdraws sometime between Super Tuesday and the November election, citing health reasons. Biden passes the torch to a replacement candidate named by the Democratic National Committee," Cembalest wrote.
While Cembalest did not detail the reasons behind Biden's withdrawal, he noted the president's low approval rating despite approximately 10% job creation since his inauguration. On Sunday, Biden exited the race, endorsing Vice President Kamala Harris as his successor.
The Democratic Party's method for selecting Biden's replacement remains uncertain. Opinions are divided between holding an open convention for potential contenders and having Harris take over Biden's campaign and nomination immediately.
Biden's exit was just one of the intriguing predictions Cembalest made. His list, which included technical forecasts on foreign currencies and the loan market, also covered technological and geopolitical developments.
Cembalest predicted a backlash against driverless cars, comparing it to the urban scooter controversy where convenience for some creates dangers and inconveniences for others. He pointed to the declining stock prices of companies selling LiDAR, a sensor used by self-driving cars, as an early indicator.
This potential backlash could be a significant setback for EV entrepreneurs like Elon Musk, who plans to unveil a robotaxi concept in October, betting Tesla's future on it.
On the geopolitical front, Cembalest anticipated no resolution to the Ukraine war in the near future.
"Despite Russia reportedly losing 87% of its prewar active troops (315,000 killed or injured) and two-thirds of its tanks, there is no ceasefire, and the war drags on for another year," he wrote.
Cembalest's prediction aligns with statements from the Biden administration. In May, US National Security Advisor Jake Sullivan said Ukrainians would likely "hold the line" this year, with a possible counteroffensive in 2025.
US Army Gen. Christopher Cavoli, during an April hearing, noted Russia's increased troop strength.
"Over the past year, Russia increased its front-line troop strength from 360,000 to 470,000," Cavoli said. "Regardless of the outcome of the war in Ukraine, Russia will be larger, more lethal, and angrier with the West than when it invaded."
JPMorgan Asset Management representatives for Cembalest did not respond to a request for comment from BI sent outside regular business hours.
