It’s well known by now that President Donald Trump has the power with a single tweet to move markets up or down.
Less well known however is that the frequency of the president’s tweets also move markets.
Bank of America Merrill Lynch studied daily returns for the S&P 500 SPX, -0.69% on days when Trump writes more than 35 tweets in a day, versus those where he types fewer than five of them.
The broker found the difference was statistically significant, with a 9 basis point drag on days where Trump is pounding out tweets fast and furious versus a 5 basis point tailwind on days where he mostly stays off the platform.
There really isn’t much anyone outside the White House or Trump’s closest advisers can do, so the advice from the BofA team is simple enough: “tread cautiously.”
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