© Bloomberg. U.S. President Donald Trump listens during a Customs and Border Protection (CBP) roundtable discussion after touring the CBP National Targeting Center in Sterling, Virginia, U.S., on Friday, Feb. 2, 2018. Photographer: Andrew Harrer/Bloomberg
(Bloomberg) — President Donald Trump “generally tweets positive things about the economy (and negative things about regulations), so the market is left determining degrees of positivity,” says Evan Schnidman, an expert in sentiment analysis and decoding the language of Federal Reserve statements who’s taught at Harvard and Brown.
One way to figure out what a tweet might mean “is to decide based on how credible the information actually is,” Schnidman tells Bloomberg News in an email. “A mention of jobs a few hours before the employment report is released is fairly credible and thus causes price movement.”
In general, says Schnidman, who’s also the founder and CEO of Prattle, (a company that provides automated financial research by analyzing central bank and corporate communications, including earnings calls), “the market effect of Trump tweets is overblown.” But, when the tweets “are plausibly a leading indicator,” they can have “a significant effect.”
Investors will probably keep a close eye on Trump’s Twitter feed right before the June employment report — due for release on the morning of July 6, at 8:30 a.m. — after the President tweeted that he was “looking forward to seeing the employment numbers” a little more than an hour ahead of the May data, pushing up bond yields and bank shares. Watch for whether Trump conveys “a leading indicator yet again,” Schnidman says. Based on his track record, it seems like there’s “a reasonably good chance he will.”
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