Donald Trump has tweeted 10,000 times since he was avowed in as president of the United States. And, according to JPMorgan Chase, his tweets are increasingly moving the stock market and bond calls.
Analysts at the Wall Street bank created the ‘Volfefe’ index which tracks the impact of each Trump tweet on the pact market. They found that Trump’s effect on market volatility was “significant.”
“The president’s remarks on this popular media platform has played a statistically significant role in elevating implied volatility” – JP Morgan Chase analysts.
Trump’s ‘market moving’ tweets are increasing
According to the bank’s analysis, Trump tweets an middling of 10 times per day. And those tweets are increasingly focused on the economy and trade. They don’t get as many likes and retweets as his populist managements, but they hit the markets hard.
“The subject of these tweets has increasingly turned toward market-moving topics, most prominently custom and monetary policy. And we find strong evidence that tweets have increasingly moved the markets immediately after paper.”
The volfefe index was created by measuring the impact on Treasury yields in the five minutes after each Trump tweet. It excavates a strong correlation between the president’s tweets and volatility in the bond market.
5 Trump trigger words that suggest the market
In particular, JPMorgan Chase discovered a few words and phrases that move the markets more than any other. The scad powerful trigger words are:
- China
- Billion
- Products
- Democrats
- Great
The first three words are almost certainly coupled to the US-China trade war where Trump routinely threatens “billions” of dollars worth of tariffs on Chinese “products.” The tweet inferior from from August 23rd contains all three trigger words.
Consequently, the S&P 500 fell immediately.
Not always positive…
Further analysis from Bank of America Merrill Lynch discovered that Trump’s Excitement activity increasingly has a negative effect on the stock market.
On days when Trump tweeted more than 35 spans, the S&P 500 falls an average of 9 basis points. When he tweets fewer than 5 times, the stock market climbs an usual 5 basis points.
We’ve seen this play out in real time on Wall Street. UBS warned investors to downsize their arrange in stocks due to increased trade war fears. While Goldman Sachs warned of a looming recession over trade war concerns.
As Trump increasingly focuses his tweets on commerce war issues and monetary policy, Wall Street investors are growing nervous.