Nasdaq CEO Adena Friedman said Tuesday that while the story of 2020 has been one of uncertainty, beginning in March with the pandemic and continuing with the U.S. presidential elections, she was proud of the way the exchange industry has risen to the challenge.
Speaking with FIA President and CEO Walt Lukken, Friedman said market participants appeared to have reduced positions going into Election Day on November 3, but they were now “leaning into” stocks related to consumer spending — on the assumption that there would be another major stimulus plan under President-elect Biden’s administration– and health care.
Asked about Nasdaq’s response to COVID-19, Friedman said the “entire financial system handled it very well.” At Nasdaq, the first priority in March was to keep employees safe, to maintain an orderly, well-functioning market, and to focus on keeping the markets open, she said.
“This whole year has been an amazing business continuity plan test,” she added. “We really came together as a team.” Friedman said she now conducts an “all-hands call” every two weeks and probably will continue to do that long term. “It’s really given us a chance to connect in a way where we appreciate each other and all the strengths we bring to the table,” she said.
However, Friedman saw limitations to working from home over the long term: “I think we are going to want to have the opportunity to have our employees connect and develop collaborations in a physical setting.”
Friedman said it was encouraging to see more people enter the retail market since the start of the year, a retail trading boom sometimes referred to as the “Robinhood effect.” The trend began early in 2020, but gained traction during the COVID-imposed lockdowns that began in March as more individuals had time to engage in the markets through low- or no-cost online retail brokers and apps.
As a market operator, Nasdaq’s fundamental role is to “minimize friction and maximize investor access,” Friedman said. In addition, “we see an important part of our role, as well as our clients’ role, as educating investors to make sure that when they interact with the markets they understand the risks and benefits,” she said. “That’s where we have been really focusing our energies.”
Beyond the immediate-term demands of 2020, Friedman said her focus was on migrating databases and data management onto a cloud environment and applying machine learning to appropriate exchange functions, including surveillance.