OUTLOOK 2020

Who's afraid of the big bad Trump?

  • 16 December 2019
  • 5 minutes

In a recent roundtable, Marcus Brookes, Keith Wade and Jon Wingent took part in a discussion led by David Ryder in which the outlook for 2020 was investigated.

In this extract, we try to second-guess how the year will pan out for President Trump and what that means for UK investors.

DR: There’s a lot going on in US politics at the moment. How do you see 2020 playing out for President Trump and his adversaries?

JW: What I hear from my family in the US on both sides of the political divide is the astonishment that the Democrats had not presented a candidate who’s a little bit more centrist and less extreme than President Trump. The recent insertion of Michael Bloomberg into the race might change that dynamic.

Elizabeth Warren would not be popular among businesses because her policies are veering too far to the left. Bernie Sanders is almost 80, and has serious health issues. During the Trump/Clinton campaign, Mrs. Clinton was unwell and Mr. Trump capitalised on that. Meanwhile, the attempts by the Democrats to impeach President Trump could backfire. It could paint the president as the poor guy being unfairly attacked. Impeachment threats back in the 1990’s against Bill Clinton actually helped his ratings. And when we look back on the Clinton administration, many voters seem to remember Clinton as having had a reasonably decent time as president.

MB: And he managed to balance the budget.

JW: Absolutely. That’s in stark contrast to the US national debt which has gone through $23 trillion dollars. This is an astonishing figure considering we’re in peacetime and at the end of the longest ever sustained period of economic growth. The polls are showing a mixed picture with some of the president’s policies garnering disapproval. But the key question over which candidate voters would prefer between President Trump and the eventual Democrat nominee is one for the future.

DR: Do you think there will be a deal between the US and China in 2020?

KW: I think there will although I expect it to be quite a light deal. It seems to me that China will probably buy more agricultural products from the US in return for the US not increasing tariffs. There is talk now of intellectual property protection being brought into the conversation. But with the US Congress passing a bill in support of Hong Kong’s democracy supporters, a comprehensive trade deal doesn’t appear likely any time soon.

In the meantime, I expect President Trump to hail any deal in the run up to the 2020 presidential election. But we may well see hostilities resume in 2021.

DR: Is the US-China trade scenario relevant to UK investors?

MB: Absolutely. We’ve already seen trade volumes globally taking a bit of a dip. But if a trade deal gets through, as Keith has described, I’d expect the global economy to pick up again. For UK investors, more certainty might make overseas investments more attractive. Not only would you get the rise foreign currency values, but you might also be able to tap into a different range of investments and their respective growth characteristics. That has certainly influenced our current asset selection.

Round table attendee biographies

David Ryder, Senior Investment Writer and Analyst

Schroders Personal Wealth

David has been leading the production of investment commentary at Schroders Personal Wealth (and before that for Lloyds Private Wealth) for more than four years. His 25 years of experience include publishing, broadcasting and journalism across a range of financial and investment topics.

Marcus Brookes, Chief Investment Officer

Schroders Personal Wealth

Prior to his role in Schroders Personal Wealth, Marcus was Head of Multi-Manager at Schroders from 2013 with responsibility for the Schroders multi-manager team and investment process. Marcus has over 25 years’ experience within investment management, specialising in manager selection and asset allocation.

Jon Wingent, Head of Investment Specialists

Schroders Personal Wealth

Jon Wingent has been Head of Investment Specialists since September 2016. Jon heads the investment specialist which supports colleagues and clients with subject matter expertise on investment related matters. Before joining us, Jon was an investment director at Close Brothers Asset Management. He has 17 years’ experience in the investment management industry.

Keith Wade, Chief Economist

Schroders plc

Keith is responsible for the economics team and the Schroders house view of the world economy. He is a member of the Group Asset Allocation Committee. He joined Schroders in 1988, before which he spent four years as a research officer at London Business School.

Forecasts of future performance are not a reliable guide to actual results. Investment markets and conditions can change rapidly and the views expressed should not be taken as statements of fact nor relied upon when making investment decisions. The value of investments and the income from them can fall as well as rise and are not guaranteed. The investor might not get back their initial investment.

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