Traders & Investors Reactions To Trump
Before he became president of the US, Donald Trump was already a successful and renown businessman. He also has no shame to give his crude opinion about how the stock market behaves and his predictions on how it will react in the future.
Through his twitter account, Trump bombards those who follow him with his perspective and opinion daily, most of the tweets with original content and not retweets. Do these actions have any impact on the stock market? They do.
The relation between Trump's tweets and stock market
Many traders have wondered if there could be a correlation between the frequency of the tweets from President Trump and the increases and declines of the stock market. Some journalists have made charts to show the way the stock market behaves in a day where President Trump has made some tweets. The results of this research show that there is a patron that has been working since the beginning of the presidential period of Donald Trump.
The number of tweets that Trump sends daily is varied. It is uncommon that the president doesn't post at least a couple of tweets every day regarding different themes and interests. Trades compared the frequency of tweets in a day with the stock market and found out that the days with more tweets, usually the market would drop, and that the fall was higher the more he tweeted.
Tweets talking about specific subjects also affect the different markets. Whenever the president Trump tweets about tariff or the Federal Reserve, and if he mentions them more than once in a day, there is a drop in several markets like the precious metal market. On the other hand, when his tweets are focused on different subjects, less related to the current global economy, the numbers of the stock increases, although not as fast as it can drop.
Following the different stock indices, you may find that the S&P 500 and the Dow Jones Industrial Average are among the ones who seem to react more whenever President Trump sends a certain amount of tweets during the day. You can even find a page where they keep track of the daily tweets of Trump and compare them with the closing prices of the stock market that day.
There is no denying that Donald Trump's tweets have a direct effect on the stock market. It doesn't mean that he has control over the way the market is going to react. The possible thing to happen is that traders and investors will stop paying attention to these tweets, as they have become a common thing every day.
For those who wish to use the tweets of President Trump as a guide to predict the movement of the stocks, they should be aware of how to use this information. Like all strategies in trading, it is best to investigate different sources and not limit yourself to using only one.