By Jenny McCall, Bloomberg Live
At Bloomberg’s Navigating Markets 2020 virtual event on November 5th, led by Kristine Aquino and Dani Burger, a series of conversations were had with key voices and leaders in the financial markets and equities space. Speakers included:
- Marc Bürki, CEO, Swissquote Bank Ltd.
- Dennis Dijkstra, CEO, Flow Traders
- Tina Fordham, Partner & Head of Global Political Strategy, Avonhurst
- Peter Rosenstreich, Head of Market Strategy, Swissquote Bank Ltd.
- Karen Ward, Chief Market Strategist, EMEA, J.P. Morgan Asset Management
- Kristine Aquino, Team Leader Markets Live Europe, Bloomberg News
- Dani Burger, Markets Reporter, Bloomberg TV
Click here to view video of the full discussion.
A few of the key takeaways:
- When asked to describe this year in one word, Dennis Dijkstra, CEO, Flow Traders said, “It has been really intense but for liquidity providers like ourselves, it’s been a moment of truth and the results are really good. The whole system held up very well. So it’s been a nice but epic period.”
- “We run a global business, so earlier in the year we saw what was happening in Asia and then it hit Europe and the U.S., so we prepared ourselves. We made changes, looking at who needs to work from home. So it’s a very intense time working in operations and managing a lot of people globally, but also keeping the focus on the long term. We have a strategic plan to grow our platform,” Dijkstra added.
- When asked about the difference between now and the 2008 financial crisis, Dijkstra said, “Although the markets were volatile this year, it was different from the 2008 crisis as the products are slightly different, there was a better view of who you were trading with, and also there is more transparency. 2008 was worse; I think the markets functioned better in March and April.”
- When asked to describe this year in one word, Marc Bürki, CEO, Swissquote Bank Ltd., sponsor of this event, said, “Markets were crazy and we had these massive swings and then you have crude oil that would turn negative and never could someone forecast such behavior in the markets. But it was a great year for online banks, as technology was on our side. Online banks had a large amount of new clients, joining simply because during this pandemic, nobody could reach their advisors. So they said, ‘Well, I am already sitting at home, so why not switch to a bank that offers me that technology.’ So we were overwhelmed by account openings.”
- Bürki added, “We traditionally had younger clients, and the average age is 40 or 42, and then we had the silver surfers, so these are people over 50, and then in between, you had people who resisted the client model. What is interesting about them is they slowly started to flow into our banks. So, clients in their 50s with more assets, bringing more revenue into the system.”
- Karen Ward, Chief Market Strategist, EMEA, J.P. Morgan Asset Management described what American exceptionalism is: “What is American exceptionalism? It’s a good question. It’s the outperformance of the American stock market and the strength of the dollar. What causes it is the macro, so the outperformance of the U.S. economy, which is the shift to fiscal policy in America and that has delivered a chance to normalize interest rates. We know this decade and this year has been about tech so that’s the micro factor. Then we have the political factor. So it’s a combination of macro, micro and political.”
- When asked which country offers the best investment opportunity, Karen said, “In five years we will be talking about India in the way we talk about China.”
- “Asia has come out of Covid easier because of their experience with SARS and the use of masks, as well as their testing tracing systems. So the ability to identify where there is a problem area and contain it, is very different from here in the UK or U.S. So China is recovering economically and nowhere in the developed world are we seeing that,” Karen added.
- Tina Fordham, Partner & Head of Global Political Strategy, Avonhurst, saw American exceptionalism somewhat differently. “In political science, American exceptionalism means something different, so it looks at democracy and how America was set out as a beacon for the world. The picture that those outside of the U.S. have on America now, however, is that it’s a nation in chaos. Having said that, I think it’s time for us to calm down and accept that most of what we are witnessing was expected and it was forecast. At the same time, there are many articles asking about the death of democracy. But what we saw was a massive turnout to the polls, and Americans have been extremely engaged. So democracy is not dead. Secondly, pollsters have taken a pasting but we do seem to be on track and it seems we had a huge turn out for Biden in the national vote and this is the biggest one in history and he is on track to win the electoral college and be the next president. What perhaps got lost in translation is that we saw massive swings. If we have Joe Biden as president, the Republicans keep the House and Democrats win the Senate. This is good for the markets.”
- Peter Rosenstreich, Head of Market Strategy, Swissquote Bank Ltd., sponsor of the event, said, “We saw a big win in equities when results came in that Biden was going to win, and despite the litigation that Trump threatened, it had minimal impact. There has been talk about how America engages with the rest of the world. So should U.S. assets receive a premium? Some said yes, as it was better than other assets or EMEA assets. But if Biden wins, he can move quickly by engaging with the global markets and patching up the relationships with groups like the U.S. Human Rights Council. This will go very far in restoring the global markets’ faith in U.S. assets.”
- “One thing we need to put into place is that in the last year or so, Covid has been a tool for the democrats to unseat Trump. Nothing Trump did before Covid could destroy his popularity. I suspect that if Biden wins that we are going to hear a very different story coming out and that change of tone will be quick and it will be dramatic and I think that people need to realize Covid was a political tool. ” Rosenstreich added.
- When Rosenstreich was asked which country offered the best investment opportunity, he said, “China is poised to have a remarkable few years.”
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