Four Ways Traditional Vehicles Could Transform in the Future—Even Elevators
Researchers, professors and executives forecast changes and innovations coming for some traditional conveyances
Researchers, professors and executives forecast changes and innovations coming for some traditional conveyances
As transportation industries look to reduce carbon emissions and keep up with changing regulations, the vehicles and vessels that carry people and products will evolve in the coming decades. Here are four trends experts in their fields see coming.
Despite their name, there’s no rule that says elevators can only go up and down. Lee Gray, a professor of architectural history at the University of North Carolina at Charlotte, says elevators that also move horizontally have been part of the vertical transportation dream for more than 100 years. It hasn’t become a reality, he says, largely because of the immense costs associated with it.
But companies are moving in this direction. The German company TK Elevator, for example, has designed an elevator that moves vertically and horizontally called Multi—though it hasn’t yet been put into public operation. Dr. Gray believes multidirectional elevators will be a part of the future, deployed in a variety of ways.
If more people live in urban high-rises, multidirectional elevators could be incorporated into tall buildings and integrated with large transportation systems, such as subways, built beneath them, says Dr. Gray. They could also be used in cities like Las Vegas, where a lot of people in, say, a hotel are trying to get to a convention center across the street.
Climate change could inspire the use of multidirectional elevators to help people avoid the heat, much like cities such as Minneapolis currently have heated skyways to help people avoid the cold, Dr. Gray says. “Maybe I really don’t want to go outside,” he says. “Maybe I’ll be happy to be zooming along in my little air-conditioned elevator car.”
Charging an electric car is a lot like charging a cellphone in the 2000s: If you use it at all, you’ve got to charge it a lot. Solutions in the works include dedicated lanes that wirelessly charge cars as they drive down the road, with a pilot program launching next year in Detroit.
Dedicated lanes aren’t the best long-term solution, says Dennis Hong, a professor of mechanical and aerospace engineering and founding director of the Robotics & Mechanisms Laboratory at University of California, Los Angeles. “We want to try to avoid rigid infrastructure, things that you can’t really modify that easily,” he says.
Dr. Hong says an alternative could be car charging delivered via radio waves. The technology exists, he says, but is being used only in laboratory settings, not commercially.
Such a method would need to overcome some significant safety challenges, notes Michael Kintner-Meyer, a research engineer at the Pacific Northwest National Laboratory in Washington state. Sending that amount of energy through radio waves would be similar to pointing a radar at a car, he says, except “any living creature passing through it will be basically fried.”
Even tugboats are being challenged to go emissions-free. These traditional helper-vessels could also go people-free, some in the industry believe.
Having crews on board comes with inefficiencies: People need bathrooms, beds, clean laundry, and they have a lot of downtime. Companies are developing technology for electric tugboats to sail without crew onboard—running autonomously when appropriate and controlled remotely by a human as needed.
Between going electric and not needing a crew, the look of a tug is going to change. Since it will no longer need a place for the crew to sleep and a high perch for the captain, the tugs of the future could be smaller and flatter. “What I envision looking at the harbor one day is you’re going to see more vessels with a very low profile,” said Jerry Silla, director of fleet engineering at Foss Maritime, a Seattle-based tug operator. “You won’t see these big superstructures, you’re not going to see vessels that are manned by crew.”
One of the biggest challenges for a crew-free tugboat? Figuring out how to transfer the tow rope from the tug to the vessel it is assisting, says Oskar Levander, senior vice president of business concepts at Norway’s Kongsberg Maritime. Today, crew members on the ship and the tug exchange a rope. But what to do when no one’s on the tug? Mr. Levander says potential solutions include big mechanical arms that come off the side of the tug, magnets, and even drone-delivered rope.
The U.S. has roughly 5,000 public airports, heliports, and seaplane bases, and upward of 14,000 for private use. But most travelers fly between only a few of the big ones. That is going to change, predicts Gregory Davis, CEO of Eviation, which is developing an electric plane.
Mr. Davis contends that electric planes will be cheaper to operate than those powered by jet fuel. They’re also going to be smaller. His company’s Alice prototype—which made its first flight in September—holds nine passengers and two crew members. The emergence of electric planes will eventually open up the nation’s regional and local airports to more commercial flights, he predicts, allowing travelers to avoid larger airports.
“We have a major potential to expand point-to-point air travel, which is also the most cost-effective and cleanest way of getting specifically from where you [are] to where you want to go,” he said. “You’re going to have much more choice and much easier access to air travel in 2050.”
Eviation plans to begin delivering aircraft in 2027. But before electric airplanes begin carrying commercial passengers between regional airports, there’s work to be done beyond the design of the planes, Mr. Davis says—from dealing with regulatory hurdles to building out a charging network at airports.
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Equities are often seen as expensive after promising start to 2023
A new trading year kicked off just weeks ago. Already it bears little resemblance to the carnage of 2022.
After languishing throughout last year, growth stocks have zoomed higher. Tesla Inc. and Nvidia Corp., for example, have jumped more than 30%. The outlook for bonds is brightening after a historic rout. Even bitcoin has rallied, despite ongoing effects from the collapse of the crypto exchange FTX.
The rebound has been driven by renewed optimism about the global economic outlook. Investors have embraced signs that inflation has peaked in the U.S. and abroad. Many are hoping that next week the Federal Reserve will slow its pace of interest-rate increases yet again. China’s lifting of Covid-19 restrictions pleasantly surprised many traders who have welcomed the move as a sign that more growth is ahead.
Still, risks loom large. Many investors aren’t convinced that the rebound is sustainable. Some are worried about stretched stock valuations, or whether corporate earnings will face more pain down the road. Others are fretting that markets aren’t fully pricing in the possibility of a recession, or what might happen if the Fed continues to fight inflation longer than currently anticipated.
We asked five investors to share how they are positioning for that uncertainty and where they think markets could be headed next. Here is what they said:
Cliff Asness, founder of AQR Capital Management, acknowledges that he wasn’t expecting the run in speculative stocks and digital currencies that has swept markets to kick off 2023.
Bitcoin prices have jumped around 40%. Some of the stocks that are the most heavily bet against on Wall Street are sitting on double-digit gains. Carvana Co. has soared nearly 64%, while MicroStrategy Inc. has surged more than 80%. Cathie Wood‘s ARK Innovation ETF has gained about 29%.
If the past few years have taught Mr. Asness anything, it is to be prepared for such run-ups to last much longer than expected. His lesson from the euphoria regarding risky trades in 2020 and 2021? Don’t count out the chance that the frenzy will return again, he said.
“It could be that there are still these crazy animal spirits out there,” Mr. Asness said.
Still, he said that hasn’t changed his conviction that cheaper stocks in the market, known as value stocks, are bound to keep soaring past their peers. There might be short spurts of outperformance for more-expensive slices of the market, as seen in January. But over the long term, he is sticking to his bet that value stocks will beat growth stocks. He is expecting a volatile, but profitable, stretch for the trade.
“I love the value trade,” Mr. Asness said. “We sing about it to our clients.”
For Richard Benson, co-chief investment officer of Millennium Global Investments Ltd., no single trade was more important last year than the blistering rise of the U.S. dollar.
Once a relatively placid area of markets following the 2008 financial crisis, currencies have found renewed focus from Wall Street and Main Street. Last year the dollar’s unrelenting rise dented multinational companies’ profits, exacerbated inflation for countries that import American goods and repeatedly surprised some traders who believed the greenback couldn’t keep rallying so fast.
The factors that spurred the dollar’s rise are now contributing to its fall. Ebbing inflation and expectations of slower interest-rate increases from the Fed have sent the dollar down 1.7% this year, as measured by the WSJ Dollar Index.
Mr. Benson is betting more pain for the dollar is ahead and sees the greenback weakening between 3% and 5% over the next three to six months.
“When the biggest central bank in the world is on the move, look at everything through their lens and don’t get distracted,” said Mr. Benson of the London-based currency fund manager, regarding the Fed.
This year Mr. Benson expects the dollar’s fall to ripple similarly far and wide across global economies and markets.
“I don’t see many people complaining about a weaker dollar” over the next few months, he said. “If the dollar is falling, that economic setup should also mean that tech stocks should do quite well.”
Mr. Benson said he expects the dollar’s fall to brighten the outlook for some emerging- market assets, and he is betting on China’s offshore yuan as the country’s economy reopens. He sees the euro strengthening versus the dollar if the eurozone’s economy continues to fare better than expected.
Even after the S&P 500 fell 15% from its record high reached in January 2022, U.S. stocks still look expensive, said Rupal Bhansali, chief investment officer of Ariel Investments, who oversees $6.7 billion in assets.
Of course, the market doesn’t appear as frothy as it did for much of 2020 and 2021, but she said she expects a steeper correction in prices ahead.
The broad stock-market gauge recently traded at 17.9 times its projected earnings over the next 12 months, according to FactSet. That is below the high of around 24 hit in late 2020, but above the historical average over the past 20 years of 15.7, FactSet data show.
“The old habit was buy the dip,” Ms. Bhansali said. “The new habit should be sell the rip.”
One reason Ms. Bhansali said the selloff might not be over yet? The market is still underestimating the Fed.
Investors repeatedly mispriced how fast the Fed would move in 2022, wrongly expecting the central bank to ease up on its rate increases. They were caught off guard by Fed Chair Jerome Powell‘s aggressive messages on interest rates. It stoked steep selloffs in the stock market, leading to the most turbulent year since the 2008 financial crisis. Now investors are making the same mistake again, Ms. Bhansali said.
Current stock valuations don’t reflect the big shift coming in central-bank policy, which she thinks will have to be more aggressive than many expect. Though broader measures of inflation have been falling, some slices, such as services inflation, have proved stickier. Ms. Bhansali is positioning for such areas as healthcare, which she thinks would be more insulated from a recession than the rest of the market, to outperform.
“The Fed is determined to win the war since they lost the battle,” Ms. Bhansali said.
Gone are the days when tumbling bond yields left investors with few alternatives to stocks. Finally, bonds are back, according to Niall O’Sullivan of Neuberger Berman, an investment manager overseeing about $427 billion in client assets at the end of 2022.
After a turbulent year for the fixed-income market in 2022, bonds have kicked off the new year on a more promising note. The Bloomberg U.S. Aggregate Bond Index—composed largely of U.S. Treasurys, highly rated corporate bonds and mortgage-backed securities—climbed 3% so far this year on a total return basis through Thursday’s close. That is the index’s best start to a year since it began in 1989, according to Dow Jones Market Data.
Mr. O’Sullivan, the chief investment officer of multi asset strategies for Europe, the Middle East and Africa at Neuberger Berman, said the single biggest conversation he is currently having with clients is how to increase fixed-income exposure.
“Strategically, the facts have changed. When you look at fixed income as an asset class…they’re now all providing yield, and possibly even more importantly, actual cash coupons of a meaningful size,” he said. “That is a very different world to the one we’ve been in for quite a long time.”
Mr. O’Sullivan said it is important to reconsider how much of an advantage stocks now hold over bonds, given what he believes are looming risks for the stock market. He predicts that inflation will be harder to wrangle than investors currently anticipate and that the Fed will hold its peak interest rate steady for longer than is currently expected. Even more worrying, he said, it will be harder for companies to continue passing on price increases to consumers, which means earnings could see bigger hits in the future.
“That is why we are wary on the equity side,” he said.
Among the products that Mr. O’Sullivan said he favours in the fixed-income space are higher-quality and shorter-term bonds. Still, he added, it is important for investors to find portfolio diversity outside bonds this year. For that, he said he views commodities as attractive, specifically metals such as copper, which could continue to benefit from China’s reopening.
Ramona Persaud, a portfolio manager at Fidelity Investments, said she can still identify bargains in a pricey market by looking in less-sanguine places. Find the fear, and find the value, she said.
“When fear really rises, you can buy some very well-run businesses,” she said.
Take Taiwan’s semiconductor companies. Concern over global trade and tensions with China have weighed on the shares of chip makers based on the island. But those fears have led many investors to overlook the competitive advantages those companies hold over rivals, she said.
“That is a good setup,” said Ms. Persaud, who considers herself a conservative value investor and manages more than $20 billion across several U.S. and Canadian funds.
The S&P 500 is trading above fair value, she said, which means “there just isn’t widespread opportunity,” and investors might be underestimating some of the risks that lie in waiting.
“That tells me the market is optimistic,” said Ms. Persaud. “That would be OK if the risks were not exogenous.”
Those challenges, whether rising interest rates and Fed policy or Russia’s war in Ukraine and concern over energy-security concerns in Europe, are complicated, and in many cases, interrelated.
It isn’t all bad news, she said. China ended its zero-Covid restrictions. A milder winter in Europe has blunted the effects of the war in Ukraine on energy prices and helped the continent sidestep recession, and inflation is slowing.
“These are reasons the market is so happy,” she said.
Predicted increases in value signals strength in local property market.