Mr. Trump is widely-known as his highly bold, colorful, mischievous and the most expressive face can ever someone has. Initially, when Trump won the election in 2016, so many Americans were in mourning the death of American goodness. They were mourning the death of the dream of ‘hope’ sold to them by Obama’s historic election. However, what’s done is done. Since then Trump has tweeted over 10,000 times and world economy has been impacted consequently.
Recently, JP Morgan has introduced an index that will measure the impact of US President Donald Trump's tweets on financial markets-“Volfefe Index”, which is based on Trump's infamous 'covfefe' tweet that remains mysterious for the whole world till now.
According to J.P Morgan’s press release, “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 U.S. rates markets immediately after publication.” Further, the company added, “Finally, we fold this index into our volatility fair value model, and to demonstrate the president’s remarks on this social media platform has played a statistically significant role in elevating implied volatility.”
Another interesting fact to notice from the press release that 1 pm tweet is roughly three times as likely as one arriving at any other hour of the afternoon or evening. His tweet activity persists well into the late evening, at 3 am than 3 pm.
Meanwhile, a report from Bank of America Merrill Lynch last week that found if Trump stays off from the Twitter platform, the stock market would function better.
Currently, the global economy remains volatile since the trade war between US-China (China- a dragon economy) has begun and Trump’s tweets continuously affecting the bond market. Below is the U.S. yield curve that remains inverted when compared with the S&P 500, that is up more than 35% since Trump won the 2016 election.