Economy

How much do Trump tweets swing the market? Check "Volfefe"

How much do Trump tweets swing the market? Check

For the many critics of Trump, "covfefe" rapidly became the symbol of his incoherent and erratic behaviour, which they said raised questions about the handling of both the President and of his Twitter account. For several months now, Trump has publicly voiced his disapproval towards US Fed's policies and the stubbornness of Powell - a Trump nominee himself - to cut rates that would have been seen as a move to just please the President.

Regardless of the topic or the type of impact a tweet has on Treasury yields, JPMorgan stressed that Trump's behavior online offers an extraordinary case study into the government's economic influence.

"Market-moving tweets exhibit distinct statistical properties, primarily addressing trade and, more recently, monetary policy". According to JP Morgan, since taking office in January 2017, Trump has tweeted more than 10,000 times and of late the pace has accelerated, with most of these relating to trade and monetary policy.

Bloomberg cited Citigroup quantitative foreign-exchange strategist Sukrita Chatterji's statistic that about "10% of the president's tweets since his November 2016 election pertain to subjects of importance to USA markets".

JP Morgan mentioned the index, whose identify is reminiscent of Trump's "covfefe" tweet, demonstrates Trump's tweets demonstrate a "measureable portion" of volatility, specially in the industry for shorter-term prices.

Market-moving tweets tend to receive fewer "likes" and retweets than Trump's other tweets, the report said.

Trump's tweets move markets, particularly regarding the trade war, which whipsaws indices back and forth with seemingly every word uttered, positive and negative.

"In response, a broad swath of assets from single-name stocks to macro products have found their price dynamics increasingly beholden to a handful of tweets from the commander-in-chief".

Mr. Trump's tweets often hit the market around lunchtime on the East Coast and can cause a lot of indigestion.

Just last month, for instance, Trump sent markets plummeting after he announced on Twitter that the US would levy tariffs on almost all Chinese imports.

Stocks have largely been churning in place since then.

The S&P 500 is up more than 35% since Trump won the 2016 election.

In the report, JP Morgan analysts use machine-learning techniques and their own volatility model to show how the president's 280-character missives serve to raise investors' expectations for future shifts in the bond market.

Prices for everything from Treasurys to stocks to gold screeched into a U-turn immediately following a recent tweet from Donald Trump.



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