Customers joining Nordea Markets on its annual US study tour discovered a new tone in Washington, D.C., this year.
In past years, the message from political speakers on both sides of the political aisle has been one of frustration – frustration with President Trump, his unpredictability, harsh rhetoric and lack of political craftsmanship. Chaos has been the prevailing narrative.
While the chaos remains, a new sense of Trump normality has taken over, and this time the attitude was noticeably different.
“It seems Americans have learned to live with Donald Trump,” said Tine Choi Danielsen, chief strategist at PFA Pension, who recently returned to Copenhagen after a week on the study trip with 19 other Danish institutional clients.
“Maybe they still don’t like him, but it appears that, despite everything, they’re more constructive and nuanced on what he’s doing than they were in recent years,” she added.
Each year, Nordea Markets arranges the tour for 20 Danish institutional clients, with one stop in the political hub of Washington and a second in another US city. The aim is to give customers a unique top-down and bottom-up perspective on the US that they cannot get from a research report. There are also separate US study tours for customers in Sweden, Finland and Norway, with their own distinctive programs.
"It seems Americans have learned to live with Donald Trump."
Tine Choi Danielsen, Chief Strategist, PFA Pension
It’s not only Danish customers that travel with Nordea to the US each year. There are also study tours for clients in Sweden, Finland and Norway. All trips have included stops in Washington, D.C., for the political low-down leading up to the 2020 election.
In addition, the Swedish tour went to Dallas, Texas, in March to understand the business climate there, while the Finnish group in October heard from intellectual heavyweights at MIT and Harvard on the Boston leg of their trip. Later this month, the Norwegian study tour will head to Washington and New York for insights into the drivers of financial markets.
On the Danish tour, the Washington leg provides the top-down view on politics, the US economy and financial markets, with direct access to influencers high up in the political system. The second stop takes the group onto the ground. Last year, for example, they travelled to Atlanta to meet with multinational corporates including Coca-Cola, Home Depot and Delta Airlines. This year, the tour brought them to the heart of fintech innovation in Silicon Valley to hear from fintech start-ups challenging the established global financial system.
“The study tour has played a big role in shaping the way I think about Fed, the US economy and US politics, which are big factors when making investment decisions,” said Steffen Mielke, Head of Fixed Income at PensionDanmark, who has joined for all 12 trips since the tour’s inception.
2020 election: A close call
This time, the 2020 election took centre stage in Washington, and the outlook was muddy as best. The consensus was that it was still too close to call and would likely turn on four main issues: impeachment, the Democratic candidate, the economy and the Midwest. The roadmap for a Trump victory would again have to go through the electoral college, as it did in 2016, and again turn on the outcomes in several key Midwest states, according to experts. It would also depend on the outcome of the Democratic primary, with a more leftist Democratic candidate tipping the scales further towards a Trump win.
“The road appears to be narrow, but achievable,” said Mielke. For him, a key takeaway from Washington was a general concern among the political speakers over what a second Trump term would look like.
“If Trump, having survived impeachment, gets elected again, will the rhetoric get even more extreme? What will be his political project for his second term? How do you, as a person, react if everything you do goes your way?” Mielke said.
Yet, at the same time, Nordea Markets’ Niels From, Head of Financial Institutions Group Denmark, another study-tour veteran and host on the trip, was also struck by the new sense of acceptance surrounding the real estate mogul and reality TV star-turned-president.
“There was an acknowledgement among the political experts that Trump is in the White House and now owns the Republican party. There was also more recognition that, while he has quite a brutal rhetoric, he has actually achieved some of his promises, at least on the surface,” said From, citing the renegotiated trade deal with Mexico and Canada as well as what Trump has touted as “phase one” of a trade pact with China.
Fintech: Not too far from a Nordic bank
For Henrik Henriksen, chief strategist at Velliv, the main takeaways were economic: The US economy is still strong, but momentum has slowed, and warning signs are flashing.
“We can expect easy monetary policy in the years to come, with low real interest rates and possibly a higher inflation target from the Fed, if necessary,” he said. Henriksen has joined the tour over half a dozen times since 2009. He described it as a tradition many customers cherish, providing valuable insights into what’s still the most important economy in the world.
And the time in Silicon Valley, the epicentre of high-tech innovation, didn’t disappoint. Participants described being inspired by the energy and creativity of the fintech start-ups, but they also noted that the threat to the established financial system isn’t as big as one may fear.
“Some of the fintech companies looked very much like a Nordic bank with their products and what they’re doing, but, of course, without a banking license,” said PFA’s Choi Danielsen. “It was nice to see that, when it comes to digitalisation, banks in the Nordics have already come quite far.”
The Nordea US study tour for Danish clients took place from September 30 through October 4 with stops in Washington, D.C., and San Francisco.
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