![]() These algorithms can detect tweets that are of interest to investors. Due to the enormous amount of potentially important information that can be shared on Twitter, algorithms were developed after Twitter became a valid public disclosure source. The regulation makes sure that all investors have access to the same information and no selective groups are favored. Before this approval, Twitter was not considered a legitimate outlet for communication since it violated Regulation Fair Disclosures, which relates to regulations that seek to eliminate selective disclosure. The Securities and Exchange Commission (SEC) approved dissemination of information by companies via Twitter in 2013. Twitter is a social medium widely used to broadcast and share information about activities, status, and opinions. Social media enable president Trump to share information with the public real-time. These media channels have been studied extensively. News reaches the public via channels such as newspapers, television, social media, and official statements. We investigate if the presidential tweets affect stock market returns in the first two years of his presidency and whether the sentiment of the tweet makes a difference. As tweets can be freely accessed and, assuming market analysts monitor the Twitter account of president Trump and his comments on publicly traded companies, investors may react to the tweets as if they were public news event releases. Another issue with event studies is that the information is available to market participants. We argue that this is the case with president Trump’s tweets, as they relate to the president’s mood and feelings about companies, which are difficult to predict. A key assumption in this type of study is that the event is unexpected. ![]() The account has no tweets naming publicly traded companies, and the account shows only one tweet mentioning a publicly traded company (Lehman Brothers) during president Obama’s presidential term.ĭoes president Trump move the markets with his tweets? To examine this question, we use an event study. Compared to president Obama, president Trump names publicly traded companies regularly. But the president is much more active on his own personal account, Therefore, our study considers only the Twitter messages posted on this account. It was previously used by president Obama and is now reserved for the exclusive use of president Trump. is the official presidential Twitter account. President Trump is one of the most influential people on Twitter, with more than 58 million followers and some 40,000 tweets. As such, we study the short-term impact of this method of communication on the value of these firms. This study investigates whether and how president Trump’s tweets influence the stock market returns of mentioned companies. President Trump has outspoken opinions that often lead to extensive coverage in the media. Although president Barack Obama also used Twitter, president Trump is the first president to extensively communicate with the public in a personal and informal manner using social media. In this respect, president Trump is the second US president to use Twitter to disseminate his thoughts. To exert this influence, one of the means is communicating with the public. The US president can have a significant influence on the American economy. President Trump won the elections of Novemas the Republican candidate, and became the 45 th president of the USA. Terrible! ” is a tweet from the Twitter account of the president of the United States of America, Donald J. “My daughter Ivanka has been treated so unfairly by is a great person-always pushing me to do the right thing! Data is in a repository ( )įunding: The authors received no specific funding for this work.Ĭompeting interests: The authors have no competing interests. We also retrieved Standard & Poor’s 500 (S&P 500) daily return indexes for each event from this database. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.ĭata Availability: We retrieved daily return indexes of individual companies from Thomson Reuters DataStream, a database of global financial and macroeconomic data. Received: SeptemAccepted: FebruPublished: March 11, 2020Ĭopyright: © 2020 Brans, Scholtens. PLoS ONE 15(3):Įditor: Alexandre Bovet, Universite Catholique de Louvain, BELGIUM Citation: Brans H, Scholtens B (2020) Under his thumb the effect of president Donald Trump’s Twitter messages on the US stock market.
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