The business mogul has caused several stocks to slump — including Boeing, Lockheed Martin, General Motors and, most recently, Toyota — and later rebound, thanks to his Twitter commentary.
In lieu of this new stock market phenomenon, investment monitoring app Trigger has come up with a new feature called “Trump Triggers” which gives users the ability to trade stocks based on Trump’s tweets about publicly traded companies.
The feature will notify you, in real time, when Trump tweets about one of your stocks; you can then move or manage your holdings based on the market’s reactions to his musings.
“No one anticipated that a single tweet could potentially eradicate billions of dollars in market cap from large companies,” read a company blog post announcing the feature.
“This increased political ‘tweet’ risk is familiar to professional investors and hedge funds on Wall Street, which have traders 24/7, smart algorithms and models to account for this tweeting risk. However, individual investors do not have the appropriate tools to react in an automatic fashion.”
Trump’s market moving power was put on display earlier this week after he took aim at GM, threatening to impose a “big border tax” on the carmaker for allegedly sending “Mexican-made” Cruze models to the U.S.
General Motors’ stock fell almost immediately.
WATCH: President-elect Donald Trump is using Twitter to single out General Motors, which he says is sending Mexican-made cars into the U.S. without paying a penalty. Kenneth Craig reports from New York.
Shares of GM, which were at $34.38 in pre-market trading, fell about one per cent; however, shares bounced back, rising one per cent before the market opened.
In December, Trump tweeted about the “tremendous cost of the Lockheed Martin F-35,” causing the aerospace company’s stock to tumble. According to The Independent, Lockheed Martin shares fell about two per cent, while Boeing shares saw a one per cent rise that day.
And that’s just two examples. Trump has also tweeted Boeing, online retailer Amazon and tech giant Apple.
Justin Connidis, a Toronto-based lawyer and expert in securities law, told Global News Trump’s tweets likely wouldn’t be in violation of securities laws in the U.S., providing they are “valid political comments, or otherwise protected by free speech.”
However, the phenomenon has raised concerns with several pundits, including LA Times columnist Michael Hiltzik who wrote, “Inevitably, pronouncements about anything by a president have an outsized effect. Sometimes that’s appropriate, but the power to move markets, like the power to deploy armies, is something to be used very sparingly, because people can get hurt by a stray remark or a stray artillery shell.”
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