By Guest Blogger Ryan Lewenza
I find it remarkable that one man and 280 characters can have such a huge impact on the global financial markets. Of course I’m talking about President Trump (who else do we talk about these days) and his Twitter account.
Whatever you may think about Trump he sure knows how to utilize the Twitter platform to get his message (and every single thought that jumps into his head) out to the world. According to JP Morgan analysis, Trump has tweeted over 10,000 times since his inauguration, which works out to 10 per day on average. His tweets range from policy and personnel updates (John Bolton’s recent firing being a good example of this) to attacks on the media and his enemies. And are sometimes random like his now infamous late-night tweet “Despite the constant negative press covfefe.” While late-night talk-show hosts were ribbing him pretty good for this one, it’s pretty clear that he was just tired and probably fell asleep halfway through his tweet.
Jokes aside, his tweets have the power to move markets and literally impact trillions of dollars of global wealth. Below is a 1 minute bar chart of the S&P 500 on August 1, 2019. On that day Trump sent out a number of tweets on the ongoing trade war with China where he informed the public that the US would be imposing a new round of tariffs of an additional 10% on US$300 billion worth of goods. The S&P 500 was up 1% in the morning, then reversed the gains pushing the S&P 500 down more than 1% on the day. Based on the S&P 500’s market capitalization of roughly US$24 trillion, this 2% daily swing equated to US$480 billion of lost wealth on the day. And this is just the S&P 500!
Trump’s tweets have the ability to impact trillions of dollars of equities, bonds, commodity and currency values, and to me, given how trigger happy he is, is a bit scary.
S&P 500 Reaction to a Trump Tariff Tweet
Source: Stockcharts.com, Turner Investments
The impact of Trump’s tweets have become so meaningful that some of the US banks have started to measure and track their impact on the markets. For example, JP Morgan analysts have created an index to quantify the effect of Trump’s tweets on US bond yields. Called the “Volfefe Index” after Trump’s covfefe tweet, it shows that his tweets are having a “measurable” impact on US interest rates.
Bank of America analysts also quantified the impact of Trump’s tweets on the equity markets. They found that when he’s tweeting frequently (days with more than 35 tweets) they see negative returns of 9 basis points, whereas days with few tweets (less than 5), they see positive returns of 5 basis points. I’m not exactly sure how they were able to quantify this but in the chart above it’s clear as day that his tweets can move the equity markets.
So now, in addition to worrying about negative interest rates, inverted yield curves, Brexit, US/China trade war, Iran, Hong Kong et al., we now have to worry about Trump’s Twitter rants. Great!
JP Morgan’s Volfefe Index
Source: JP Morgan
Given the rising importance of Twitter and the markets it now seems like a good time to plug our Twitter account at the handle @turnerinvests. Currently our followers are a fraction of Trump’s 64 million, but with your help we’ll be able to ramp up those numbers and, just maybe, we’ll be able to move markets like the big guy. So today take a second and follow us on Twitter and I promise no-late night tweets of covfefe!
Our Twitter Account – @turnerinvests
66 comments ↓
Capitalist tweet tyrant! Still reminds me mostly of Teddy Roosevelt. I could be wrong but I don’t think he’ll get assassinated because the mad half of America like him. Xi talked of being president-for-life. That’s wrong. There’s other talents in the party that need a turn.
Fortis, telus, enbridge, trans Canada, the big 5 , bce, atco, cu, Canadian tire, cnr, power Corp, emera, trp & vfv
Am I buying the wrong stocks?
I had a sip of coffee in my mouth when I read “Volfefe Index”. The laughter reflex overcame me and sprayed all around.
Sales of Sharpies up too…
Ah. Sorry Ryan. Here’s a Millennial with no FB or Twitter.
I’m sorry too Ryan. I’m an early Boomer with no FB or Twitter.
Are markets more volatile now than historically?
https://www.macrotrends.net/2603/vix-volatility-index-historical-chart
It doesn’t look like it. Trump’s tweets don’t destroy railroads, real estate, factories or any of the other things that constitute real wealth in our world. Maybe they wiggle the discount rate that traders use to value future cash flows from those assets, for a few days or a few hours anyway, but that’s a different thing. The markets continue to fluctuate, and we (some of us) continue to try to assign meaning to the fluctuations, ex-post. But the fault isn’t in our Twitter stars, only in ourselves.
You know of course that on Twitter there is no ability to redact or delete ‘inconvenient’ posts.
It takes guts folks, it take guts to handle free discussion in public, something very brave for the traditional Canadian way of thinking and discussing, especially when considering the intellectual power of the potential opponents.
Kudos for the courage though.
Charts tell all.
Stop wasting your time with news, twitter, Facebook and Instagram. All designed to confuse, misdirect, and generally, dumb you down to vegetable status.
war and weather guns and butta
drones – Attack –tit-for-tat?
Aramco “hopes to have that capacity restored within days.”
Re: #2 Stock hoarder on 09.14.19 at 3:35 pm
I always considered Canadian Tire to be the most overpriced stock in TSX history. The pension funds bought Canadian Tire when they dumped Nortel. That isn’t a very good reason in fact its a terrible reason. I still consider Canadian Tire (voting and non-voting) to be the most overpriced stock on the TSX today. Utility stocks will likely fall big time next year starting around May 2020.
@#8 Stan Brooks on 09.14.19 at 4:26 pm
You know of course that on Twitter there is no ability to redact or delete ‘inconvenient’ posts.
It takes guts folks, it take guts to handle free discussion in public, something very brave for the traditional Canadian way of thinking and discussing, especially when considering the intellectual power of the potential opponents.
Kudos for the courage though.
________________________________
lol
Now that twitter is mentioned, I strongly recommend Uncle Jay.
https://mobile.twitter.com/STOCKMASTER2000
Daily dose of sanity in 1min increments.
#11 Tony on 09.14.19 at 4:33 pm
Re: #2 Stock hoarder on 09.14.19 at 3:35 pm
I always considered Canadian Tire to be the most overpriced stock in TSX history. The pension funds bought Canadian Tire when they dumped Nortel. That isn’t a very good reason in fact its a terrible reason. I still consider Canadian Tire (voting and non-voting) to be the most overpriced stock on the TSX today. Utility stocks will likely fall big time next year starting around May 2020.
———-
…Utility stocks will likely fall big time next year starting around May 2020…based on the following facts and analysis:
– empty space blah blah blah.
– more empty space blah blah blah.
– more empty space blah blah blah.
– more empty space blah blah blah.
– more empty space blah blah blah, this is getting boring.
Great analysis! Based on that, I’ll make sure to do exactly what you recommend. Lol.
#2 Stock hoarder on 09.14.19 at 3:35 pm
Fortis, telus, enbridge, trans Canada, the big 5 , bce, atco, cu, Canadian tire, cnr, power Corp, emera, trp & vfv
Am I buying the wrong stocks?
———-
You have all the right stocks.
What you are doing wrong is that you keep looking at the ticker daily.
Just in: 50% of Saudi’s oil production has been destroyed by a weaponized flying robot drones (I can’t make this stuff up).
I wonder if our selfie taking Prime Minister is regretting killing Energy East and thus leaving our East Coast vulnerable to energy disruptions caused by such attacks. Probably not as that would require understanding oil markets and Justin is not intelligent enough to do that.
@#17 PeterfromCalgary on 09.14.19 at 4:55 pm
Just in: 50% of Saudi’s oil production has been destroyed by a weaponized flying robot drones (I can’t make this stuff up).
I wonder if our selfie taking Prime Minister is regretting killing Energy East and thus leaving our East Coast vulnerable to energy disruptions caused by such attacks. Probably not as that would require understanding oil markets and Justin is not intelligent enough to do that.
_______________________________
I wonder when you’ll stop spouting utter nonsense on here.
Saudi oil hit by drone could be a big hit to more than just Saudi Arabia. During World War 2 oil was rationed. People walked to church on Sunday. Canadians would get on their bike to go to the shops but we would not be carrying home “big screen TV’s or large merchandise”. The McDonald’s Drive Thru and Tim Horton Drive Thru would really take a hit. Oh, well we can only hope America keeps pumping out the black gold.
#9 Where are we?
…has cracked the code. Bravo!
Canadian Tire…
Has been one of Canada’s best managed companies. The controlling family turned the reigns over to professional management a few decades ago although they retain two board seats. Chair of the Board Maureen Sabia is beyond excellent. They have had a series of great CEOs. All their acquisitions have worked out well. In a tough retail environment they have absolutely thrived at least for the last 20 years. True, they had a couple of aborted expansions into the USA but that was decades ago now.
Management is driven to improve the results slowly but surely year after year.
Re: #2 Stock hoarder on 09.14.19 at 3:35 pm
I hope you bought oil company stocks.
MAJOR ATTACK FALSE FLAG!! SAUDI OIL DESTROYED!
I know the guy who runs this channel is a reputable source.
https://www.youtube.com/watch?v=lRvPyIyuhRE
Re: #17 PeterfromCalgary on 09.14.19 at 4:55 pm
This is great news for me.
The total $250 billion dollars in tariffs is less then .01% of the U.S. GDP of $25.5 trillion dollars. An insignificant amount. Sad that tariffs have to happen but China has stolen and broke the rules long enough.
I don’t blame Trump for a small, temporary move in the market. I just laugh at the people that sell based on a tweet.
Continue the TDS but stay invested.
https://www.nbcnews.com/news/amp/ncna903231
Sorry Ryan;
No FB or Twitter. A Luddite by choice, I have only iPencil and iPiece of Paper.
I see T-rump still living rent-free in everybodys’ heads. He’s an actor. A State Actor. One of the best.
Don’t mind the men behind the curtain of this show.
All the world’s a stage. Just ask T2!
Awaiting this pathetic blog’s next paper tome:
“Heir in the Awful Places: the Housing Brinkmanship of Bank of Mom & Dad”
Ha, ha, Ryan, it just goes to show you on how crazy, delusional this world has become! Wow, just Wow!
Facebook and Twitter……
There should be a “Productivity Index” for companies whenever something newsworthy comes online and everyone on the job MUST forward it to their friends…..
FB and Twit…….
Time wasting drivel and money burners at companies.
Yes, Trumps tweets can have a big effect on markets, but that has an upside. When stock markets panic from one of his tweets it can create a buying opportunity. As Warren Buffet said, never let a good crisis go to waste. So Mr. Trump, go ahead with your tweets and make my day!
As for all this worry about loss of Saudi Arabia oil production, I’ll saddle up and keep on riding my trusty and reliable bike.
I abandoned Twitter once it was clear they’d let Trump spout whatever nonsense he pleased. It’s nothing but a rage machine now. Reality is more complicated than a tweet.
Re: yesterday’s story about taxing Primary Residence capital gains:
I’m assuming that if Trudeau the Munchkin taxes PR capital gains then he’ll allow us to write off our mortgage payments like the Americans do, right?? right??
Otherwise we’ll end up with the worst of both worlds and even more uncompetitive with the Covfefe Crowd.
I’m a millennial and I don’t have FB or Twitter…or any social media for that matter.
Why write your life in pen when a pencil will do?!
Trump: give me instant attention and publicity
Society: yes
Re: #18 oh bouy on 09.14.19 at 5:03 pm
Here’s some real news, Hodji from Johnny Quest is dead.
Re: #31 Re-Cowtown on 09.14.19 at 7:36 pm
Americans can also write-off their property taxes.
Doug in the forest city “Yes, Trumps tweets can have a big effect on markets, but that has an upside. When stock markets panic from one of his tweets it can create a buying opportunity.”
Yes but the risk is that his decisions and tweets bring on a recession and bear market. Then it’s not the best buying opportunity. – Ryan L
“…move markets like the big guy.”
So what’s the counterfactual?
The S&P 500 is up over 22% year to date, and it’s only September. This is a problem? If you could have controlled Trump’s every tweet and trade negotiation, from January 1 (arbitrary, I know) to today, where do you think the S&P would be? 22+% is a pretty high water mark!
The ABSOLUTE LAST thing most investors need is to follow another Twitter account, to counteract yet another manic Twitter account. They need to unsubscribe from as much as possible. Let the news junkies read the Economist once a week, and everyone else can check their portfolios quarterly, or annually.
Myself excluded, of course… Sigh…
Gosh, wouldn’t be great to have an integrated pipeline system directing our most important resource to the Western coast, safely delivering oil to the economies of Asia?
Hope you people are loading up on Canadian oil/nat gas producers by now. Valuations are extremely attractive and we’re going to shoot up to $75 pretty quickly.
Ryan Lewenza…Garth Turner….how about a column on how the Democrat candidates are enjoying their wealth instead of bashing Trump?
https://www.forbes.com/sites/michelatindera/2019/08/20/how-elizabeth-warren-built-a-12-million-fortune/amp/
What a great American success story: “Warren, who represents Massachusetts in the senate, grew up poor in Oklahoma, as the youngest of four. Her father was a maintenance man, and her mother worked as a minimum wage employee at Sears.’ Unlike Trump, she inherited zip. Thanks for pointing this out. – Garth
Tannhauser Gatekeeper “The S&P 500 is up over 22% year to date, and it’s only September. This is a problem? If you could have controlled Trump’s every tweet and trade negotiation, from January 1 (arbitrary, I know) to today, where do you think the S&P would be? 22+% is a pretty high water mark!”
The S&P 500 lost 20% in Q4 in part due to trump and his tweets. I’m not saying Trump is necessarily bad for the markets just a lot more volatility. – Ryan L
A 1％er is a 1％er, whether they inherited it or worked for it or cheated for it. You dont go from nothing to 12 million in a lifetime unless you build a company selling something useful. When public servants can be multi-millionaires you have the reason for our ever increasing tax burden.
If only I had access to Trump tweets a few hours before they happen, I’d be making millions as a day-trader!
For any financial manager worth his/her salt, the Trump tweets are but ‘noise’ (ie. responsible for short term swings), that will be proven to be irrelevant in the longer scheme of things.
tcc
The concentration of contempt in US politics is at all time high. But the comedy shows are of the best vintage, even if a bit repetitive.
And for Trump’s tweets. Who cares at this point? Not even Melania. His MO is very basic: say something incredibly awful today, lie to pump the market tomorrow. Deja Vu all over again.
Definitely fake but funny.
https://twitter.com/owsi1968/status/1165379455826706432
So we see more noise in the markets because we hear more noise on social media. But the underlying fundamentals remain the same: kneecapped by American Tariffs and the EU-UK endless Brexit.
Trump has forced me to be a more intelligent investor. The media’s obsession with Trump’s Twitter fury is constantly reinforcing for me the need to keep a balanced portfolio. Those moments where I’m anxious about missing out on more gains tend to be quickly dampened in five minutes by the latest report of a manufactured catastrophe.
“The S&P 500 lost 20% in Q4 in part due to trump and his tweets. I’m not saying Trump is necessarily bad for the markets just a lot more volatility.”
My thinking is (and I could very well be wrong) that Trump’s tweets are currently the trigger for the volatility which the market naturally and continuously accumulates. 2017 was practically no-vol, the 2018 short-vol implosion wasn’t Trump’s doing, nor is the current value/momentum/short squeeze thing.
But the algos and the traders and MSNBC are all watching Trump’s Twitter feed now, so he’s the catalyst for all the itchy trigger fingers in the market. If he wasn’t tweeting, I’m guessing the market would be just as volatile (because I don’t think, historically, it IS all that volatile) but there would be some other trigger. Iran/Israel, Saudi Arabia, Brexit? We would be blaming the market’s minor gyrations on them if the Twit-in-chief went silent…
I hope my thinking is clear, even if you don’t agree. Of course, you’re a PM, so clients call and ask “what the hell?” and Trump IS often the proximate trigger, whereas I’m only a family office guy, so I don’t have any explaining to do, except to myself.
N.B. Personally, I think Trump has more to gain by stringing out China negotiations and playing the hard man, than by actually doing a deal. Does Trump think this? I’m not certain. But he hasn’t fired Navarro yet, and Navarro wants to strangle China while the US still can. Putting the boots to China is one Trump policy that most Democrats fully support — about the only one. Keeping US rates high and dollars scarce is probably doing more damage to China than many people appreciate, but I have trouble imagining that Trump realizes this and is secretly telling Powell to hold them up.
@TCC
If only I had access to Trump tweets a few hours before they happen, I’d be making millions as a day-trader!
For any financial manager worth his/her salt, the Trump tweets are but ‘noise’ (ie. responsible for short term swings), that will be proven to be irrelevant in the longer scheme of things.
___________
You bring up an Interesting point. Would love to see the trade history of Family and friends to the Trump Admin and Inner Circle
@#38 jim jimminy cherooo
My god, is the Maga hat too tight?
All Democrats bad……. all Republicans good.
Got it.
totally off subject Uncle Garth.
After all the media hoopla about hurricane armageddon.
Any major damage in hacienda Lunenbergia?
DELETED
Ok I’ll follow you @turnerinvests provided you don’t tweet too crazy often and you follow me @wyoungcao. I tweet hardly ever but you might like the charts I post.
#2 Stock Hoarder. It depends on why you bought these particular stocks? And, you’re age? In what weighting does each one take in your mix? Is it more an income concept you’re applying. In the past couple of years value has been a great place to be. You’ve got that in spades. But, there are some great growth picks on the TSX. And some better income, paid in USD.
You own some good companies that pay dividends, good start. You might be able to stop buying what you have use the dividend cash flow to add growth , depending on age.
. A stand out has been quiet little EMA, a stocks that never makes the news. $36 to $57 since Q3 2018 makes this boring utility look like a high powered growth stock. I own lots of this gem.
Back of the napkin, you’re sitting on around a 30% return since December18. Congrats. I also own most of the better issues on your list. A few of yours make no sense to me. But that’s what makes a market.
So, don’t kick yourself. But, I would want a bit more growth in tech and materials rather than any more CN or Canadian Tire which looks tired with consumer stocks generally. Hold , don’t sell anything. Just add on using new cash.
Bitcoin value analysis with stock to flow
https://link.medium.com/EXhnTAbd0Z
This is funny, especialy mother in law.
https://imgur.com/a/IzrfZ27
So today take a second and follow us on Twitter and I promise no-late night tweets of covfefe! – Ryan
——————————————————————–
Sure!
But don’t forget to follow me back @Gonzo1111111
You won’t want to miss out on the intellectualism I espouse.
It’s really great. I have ZERO followers!
By the way, would it have killed you guys to smile on your Twitter page photo? You look like 3 miserable pricks! Hahahahahah
#20 Cici on 09.14.19 at 5:28 pm
Not really.
People usually use social media to stay in touch with one another, or be entertained.
What you failed to see is that politics doesn’t have to seep it’s way into every aspect of life. Some places are better without it, social media is one.
MF
#146 Barb on 09.13.19 at 6:33 pm
You are aware there is a difference between the public service and the Liberal government right?
Actually after reading your comment, it’s obvious you have no idea.
MF
“The Ontario government lost 42M selling cannabis last year”
https://www.cbc.ca/news/canada/toronto/ontario-cannabis-loss-1.5282994
-A few other stories like that too if you search “cannabis” in the search button.
Let’s just admit this whole thing was a colossal stupid idea. Let’s also admit it was done for one thing: to pander to drug addicted “young people”.
Pathetic.
MF
will “Ok I’ll follow you @turnerinvests provided you don’t tweet too crazy often and you follow me @wyoungcao. I tweet hardly ever but you might like the charts I post.”
Done. I’ll add you this week. And I have a life so I won’t tweet nearly as much as Trump does. – Ryan L
The growing problem of mortgage fraud among millennials
https://ca.finance.yahoo.com/news/growing-problem-mortgage-fraud-millennials-184233160.html
It seems we accept lying on mortgage applications as the ‘new normal’.
How is that possible with the ‘most’ /secure, financially prudent, profitable lenders in the world and tons of ‘regulations’ is another question.
Steve Eisman/Marc Baum from the big short:
“We live in an era of fraud in America. Not just in banking, but in government, education, religion, food, even baseball… What bothers me ins’t that fraud is not nice. Or that fraud is mean. For fifteen thousand years, fraud and short sighted thinking have never, ever worked. Not once. Eventually you get caught, things go south. When the hell did we forget all that? I thought we were better than this, I really did.”
“They mistook leverage for genius,”
“I wasn’t worried that I’d be wrong—I was always worried that the government would bail the [biggest banks] out before I could make money,”
—————————-
https://www.nytimes.com/2010/04/04/opinion/04burry.html
Meanwhile, home buyers, convinced by recent history that real estate prices would always rise, readily signed onto whatever mortgage would get them the biggest house. The incentive for fraud was great: the F.B.I. reported that its mortgage fraud caseload increased fivefold from 2001 to 2004.
No worries (how naive these guys sound) our friend from BoC will print out a few trillions, houses will ‘stabilize’ at 2 millions in GTA and ‘life will go on’… Until it does not.
#11 Tony – can I borrow your crystal ball ASAP please?
#14 Stone – after I’m done with Tony’s crystal ball will led it to you with Tony’s permission
#16 Jass – thx u – Im 45 how do i stop looking at my portfolio everyday? And the tsx and Dow? I wake up at 2 am to go for a leak and I look at futures? Yes I know I have a problem lmfao
#21 Shawn Allen thx I agree with u
#50 Freddy Freeloader I love your name dude thx for the great comment, I still have lots of years left to buy and hold, any advice on what other stocks I should add u mentioned material and tech… ema is beautiful
#55 MF on 09.15.19 at 9:43 am
#146 Barb on 09.13.19 at 6:33 pm
You are aware there is a difference between the public service and the Liberal government right?
Actually after reading your comment, it’s obvious you have no idea.
————————————————————
Why on earth would you deduce that from the comment?
Surely you don’t believe that T2’s “programs” are conducted with the same number of government employees!
Interesting read.
https://www.330ramp.com/blog/2019/9/13/do-you-need-a-car?ss_source=sscampaigns&ss_campaign_id=5d7e57a581bea26fce59a790&ss_email_id=5d7e5dbc0d474f72c32ce9ea&ss_campaign_name=Ramp+Recap&ss_campaign_sent_date=2019-09-15T15%3A50%3A23Z
#17 PeterfromCalgary on 09.14.19 at 4:55 pm
Just in: 50% of Saudi’s oil production has been destroyed by a weaponized flying robot drones (I can’t make this stuff up).
I wonder if our selfie taking Prime Minister is regretting killing Energy East and thus leaving our East Coast vulnerable to energy disruptions caused by such attacks. Probably not as that would require understanding oil markets and Justin is not intelligent enough to do that.
_ _ _
I wonder if the Great Orange Gasbag in the White House is regretting taking Iranian and Venezuelan oil out of the market, which will inevitably lead to higher gas prices for Americans now.
#62 AGuyInVancouver on 09.15.19 at 12:54 pm
Pay attention here, uncle Jay will school you about oil.
https://mobile.twitter.com/STOCKMASTER2000/status/1172940402476953600
It seems i’ve bin banned from twitter for holding the wrong pronoun opinions so I can only follow you from afar. Have booked marked your account but can never follow it
@Ryan Lewenza, post #36:
Then again, a recession might be just what we need to end this insane real estate bubble and bring some long, long, long, long overdue sanity to real estate markets.