U.S. Presidential Elections from an Expatriate Point of View

As an Iowa native now living in London and having once run for elected office myself, albeit Iowa House district 45 where the results encouraged me to stick to my day job, watching the U.S. presidential elections unfold from the “outside in” has been fascinating. Conversations about the highly publicized and quickly approaching 58th U.S. presidential election are not only increasingly prevalent, but dominant, in both casual and professional interactions.  And with Donald Trump (Republican nominee) and Hillary Clinton (Democratic nominee) kicking off debate season, the world is watching as the political future of the United States takes shape. A future many people have big questions and strong opinions about.  As a portfolio manager and expatriate now living in London the three questions I get asked most often about the upcoming elections are:

1.) How is the presidential election viewed outside of the U.S.?
This is a question my U.S. counterparts ask most often. Either because they are curious as a result of engaging in similar, less frequent, conversations on their travels or because of the dichotomous nature of the two front-running candidates. Given the increasingly interconnected global economy, it makes sense that the world is watching. That said, the sentiment outside the U.S. is that a Clinton win would be viewed as status quo and is already priced into the markets. This is mainly due to investors’ greater understanding regarding how she would govern, given her well-known and documented history in elected office. On the other hand, the possibility of a Trump win is worrisome for most. The main concern regarding a Trump win is often attributed to the fact that he has no history of governing and has never held an elected office. This lack of history, combined with his strong nationalist sentiment and continuously evolving foreign policy, could have negative implications for global trade and currency markets. And it is most notably Trump’s evolving stance on foreign policy that worries many in Europe. Mainly because NATO has served as the foundation for global security doctrines over the past decade, a foundation that has become intertwined with national defense and immigration policies, both of which are already stressed given terrorism fears across the continent.

2.) What are the potential implications of the upcoming elections as it relates to fiscal policy, international relations, and thus the global economy?
The candidates’ attitude toward nationalist sentiment and global trade stand to have notable implications. For example, there has been a rise in nationalist sentiment recently, both within the U.S., and as many are aware within the UK (evidenced by the recent Brexit vote). And while a certain level of pride in one’s nation is respectable, sentiment that elevates one nation at the expense of another nation, or type of people, has far reaching and likely negative implications for international relations. When answering questions about global trade, this is an issue that both candidates have either not been overly supportive of or have not been straight-forward about. Which to me is a cause for concern as global trade promotes competition which in turn drives innovation – both of which provide consumers, like you and me, access to products and markets at a reasonable price point. If global trade was to deteriorate, there would likely be disruptive implications for the global economy, which from a holistic perspective, has historically benefited from a free trade environment.

3.) What should investors and U.S. voters keep top of mind as the election draws near?
As November draws near and as the debate cycle continues, we will hopefully see the candidate’s policies become more defined. With one debate completed, the next scheduled for this Sunday, and the final to be held on the 19th of October I will be paying attention to what appears to be a rise in nationalist sentiment as well as each candidate’s attitude/policies regarding global trade. And as the rhetoric continues to unfold, investors and voters alike will have a better understanding of what a Clinton or Trump win would look like. I know I’ll be watching, will you?


– Randy


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