US President Donald Trump is not just tweeting haphazardly for your entertainment, his tweets are increasingly moving US markets and impacting interest rates, a JPMorgan report has revealed.
Trump has produced more than 10,000 tweets since taking office, at a pace that has accelerated in recent months to over a dozen non-retweets a day on his personal account.
"The subject of these tweets has increasingly turned toward market-moving topics, most prominently trade and monetary policy. And we find strong evidence that tweets have increasingly moved US rates markets immediately after publication," said the report that introduced the "Volfefe Index" e inspired by the "Covfefe", which was a viral typo for "coverage" from a tweet by Trump.
In fact, the report by the US multinational investment bank and financial services provider found nearly 146 such tweets in 2018-19, suggesting the effect of tweets on the market is a real one.
"Market-moving tweets exhibit distinct statistical properties, primarily addressing trade and, more recently, monetary policy. In recent months, these tweets also tend to receive fewer likes and retweets than other contemporaneous remarks," said the report.
Trump has maintained a remarkably consistent daily presence on Twitter since taking office, averaging more than 10 tweets a day to his nearly 64 million followers since the start of 2016 -- roughly 14,000 total over that time-frame associated with his personal account, of which more than 10,000 occurred after the 2017 inauguration.
That said, he has reliably produced at least one tweet on all but a handful of days each year.
The president's Twitter activity displays some strong intra-day cyclicals.
"While tweets can and will arrive at any hour of the day, noon to 2 p.m. Eastern Time is the most likely window within which a new remark will hit the tape, a time fortuitously coterminous with some of the best intra-day liquidity in US rates markets," the report elaborated.
Such an exercise is necessarily quite approximate, but nonetheless gives insight into to what extent the president's candid remarks contribute to market uncertainty, it added.
The report found market-moving tweets are quite distinct, on average, from the broader population of presidential tweets by several important metrics.
"First, in recent months they have been less well received by followers of his account as measured by the average number of "likes" and retweets.
"Second, and more important for our purposes, market-moving tweets tend to focus on a subset of topics and themes related to trade and monetary policy," it said.
One caveat to mention here is the possibility that the president tweets about markets when the markets under- (or out-) perform.
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