Andrew Harnik/Associated press
Donald Trump does not officially become the most powerful person in the free world for another a month, but he may already be the most powerful force in the world’s financial markets.
In the weeks since Trump was elected to the White House, he has used his Twitter account to attack opponents, tout Cabinet candidates, and promote policy. Now his online quips are often followed by changes in the stock market.
Call it the financial bully pulpit.
“We will have an unprecedented situation where an American president being vocal about a specific company is certainly going to drive short-term reactions in the market,” said David Santos, a regional portfolio adviser for Northern Trust in Boston. “It certainly is the case if it is indicative of certain policy initiatives that may be in play down the road.”
And it’s not just the stock market. For a long time, Trump’s Twitter targets have included national controversies and pop culture. There are ways to measure reaction to this as well.
Of course, Trump wasn’t the only reason why a company’s stock (or a “Hamilton” soundtrack) may go up or down on the charts. While there may be some correlation, this doesn’t necessarily mean there’s any causation. In many cases, the subject of Trump’s tweets rallied in the long term.
Still, consider a few examples below:
At least in the short term, a company can be a winner or a loser when Trump takes to Twitter. The best example so far is ExxonMobil: The company’s CEO, Rex Tillerson, was named Trump’s choice for secretary of state this week after days of speculation.
Exxon’s stock began to rise the night before Tillerson’s official announcement — also after Mitt Romney posted on Facebook that he was not going to be Trump’s pick. The following day, as the announcement became official, Exxon’s stock went up by 2 percent.
It was a different story when it came to Boeing. On Dec. 6, Trump questioned the cost of the defense company’s contract to build the next Air Force One plane. He vowed to cancel the order once he was in office.
Boeing’s stock went down 1 percent in early trading — although the company’s weeks-long trend-line is decidedly upward.
Trump took the “Hamilton” cast to task after cast memebrs delivered a politically charged message to Vice President-elect Mike Pence following a performance. In the weeks after on the Billboard charts, the original Broadway cast recording maintained its ninth place spot.
Soon after, “Hamilton” climbed to sixth place before dipping back down a few spots.
Trump has shown he can drive the national conversation, at least online. On Nov. 29, Trump suggested that burning the American flag should be illegal. Data from Google Trends showed that more people searched for the term “flag burning” that day more than in the rest of the year combined.
Again, it’s hard to say whether Trump directly caused the reactions, positive or negative, that followed his targets. But given his proclivity toward the social media, Trump’s tweets might be one of the most important things to track as he becomes president.
And Trump, who likes to boast about his followers, is probably OK with that.
Ironically, the one company that might not be getting respect from Trump is Twitter. On Wednesday, Trump met with leaders from Apple, Tesla, Google, Amazon, and Facebook, but Twitter was not invited to send a representative to Trump Tower.
“They weren’t invited because they aren’t big enough,” a transition official told Reuters.
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