After Chaotic 4 Years, Wall St. Is Itching to Unfollow @realDonaldTrump
President Trump turned his Twitter feed into a singular source of market volatility. Now, investors are looking forward to markets free of presidential tweets.
By Matt Phillips
Nov. 24, 2020, 3:00 a.m. ET
In the closing weeks of the presidential campaign, President Trump began telling his supporters that if former Vice President Joseph R. Biden Jr. was elected, market mayhem would follow.
“If Biden wins,” he told a cheering crowd at an airport near Reading, Pa., on Halloween, “you’re going to have a stock market collapse the likes of which you never had.”
That didn’t happen. Instead, the stock market has notched new record highs since Mr. Biden emerged as the winner, as investors celebrated both the prospect of an end to election-year political uncertainty as well as progress on Covid-19 vaccines. And as Inauguration Day approaches, Mr. Trump’s grip on the collective psyche of investors appears to be receding, too.
Investors of all political persuasions say they are ready to turn the page on what was a profitable but extraordinarily politicized and stressful period for the financial markets, where they had to contend with an unpredictable force whose pronouncements frequently moved stock prices. For the most part, investors supported Trump administration policies; it was the president’s unpredictable tweeting they found hard to stomach. In the past four years, Mr. Trump used his bully pulpit to praise and berate companies, escalate a trade war with China and signal the economy’s strengths ahead of official announcements. In the process, his Twitter account became a singular source of market volatility.
“I just want my life to go back to normal,” said Barry Ritholtz, a money manager in New York who did not vote for Mr. Trump. “And I don’t mean pre-pandemic normal. I mean pre-golden-escalator-to-hell normal,” he said — a reference to Mr. Trump’s famous 2015 ride down the escalator in Trump Tower, at the end of which he announced his candidacy. “I just want the noise level to quiet down.”
The weekend Mr. Biden became president-elect, Mr. Ritholtz went to Twitter with one goal in mind: unfollow as many accounts in the Trump orbit as possible. In recent years, Mr. Ritholtz’s Twitter timeline had grown crowded with accounts — such as those of Mr. Trump’s children or press officers — that he felt he had no choice but to follow as he managed roughly $1.7 billion in client assets.
Like No Other President
U.S. presidents and political leaders don’t often train their focus on individual companies — at least in public. In 1962, concerned about rising inflation, President John F. Kennedy publicly excoriated steel executives for planned price increases. At a news conference in which he singled out U.S. Steel by name, President Kennedy said those executives showed “utter contempt” for the American public. The episode, which was followed by threats of antitrust investigations of the industry, spooked investors and helped set off a significant market slump.
But in recent decades, even as stock ownership became much more widespread, presidents such as Ronald Reagan and Bill Clinton — who both presided over booming stock markets — shied away from direct commentary on companies or markets. Probably, they calculated that the political reward of closely associating themselves with a bull market wasn’t worth the risk of being blamed for a potential bust that could — and in both cases did — come.
Not Mr. Trump. Almost from the moment he was elected, he adopted the stock market as a kind of real-time, multitrillion-dollar barometer of his own performance. Since taking office, he has sent tweets or retweets with stock market references more than 200 times, and made scores of statements spotlighting the market’s rise under his administration.
“Broke all time Stock Market Record again today,” he wrote on Twitter last December. “135 times since my 2016 Election Win. Thank you!”
When stocks have slumped, the president publicly framed falling prices as the work of those he considers political opponents, including the Federal Reserve, congressional Democrats and the news media. He has publicly threatened and castigated major American companies, facing off with Amazon.com over its tax payments and deals with the U.S. Postal Service; with General Motors, Ford and Carrier — then a subsidiary of United Technologies — over plans to shutter plants; and with Lockheed Martin and Boeing over the costs of fighter jets and replacements for Air Force One.
Mr. Trump has disclosed market-moving information after private discussions with executives and appeared to hint at upside surprises from economic data that his office was privy to. He has demanded that the Fed cut interest rates to prop up the market. He has treated serious policy developments — such as the twists and turns of his trade war with China — with his typical flair for showmanship, unveiling his changing positions in a hail of unexpected tweets that sent share prices tumbling on multiple occasions.
“He is very much an outlier in terms of his focus on the stock market,” said B. Dan Wood, a professor of political science at Texas A&M University, who has compiled a database of presidential statements on the economy. “I think no former president and likely no future president will emphasize the stock market as much as Trump has,” he said.
(Continues)
President Trump turned his Twitter feed into a singular source of market volatility. Now, investors are looking forward to markets free of presidential tweets.
By Matt Phillips
Nov. 24, 2020, 3:00 a.m. ET
In the closing weeks of the presidential campaign, President Trump began telling his supporters that if former Vice President Joseph R. Biden Jr. was elected, market mayhem would follow.
“If Biden wins,” he told a cheering crowd at an airport near Reading, Pa., on Halloween, “you’re going to have a stock market collapse the likes of which you never had.”
That didn’t happen. Instead, the stock market has notched new record highs since Mr. Biden emerged as the winner, as investors celebrated both the prospect of an end to election-year political uncertainty as well as progress on Covid-19 vaccines. And as Inauguration Day approaches, Mr. Trump’s grip on the collective psyche of investors appears to be receding, too.
Investors of all political persuasions say they are ready to turn the page on what was a profitable but extraordinarily politicized and stressful period for the financial markets, where they had to contend with an unpredictable force whose pronouncements frequently moved stock prices. For the most part, investors supported Trump administration policies; it was the president’s unpredictable tweeting they found hard to stomach. In the past four years, Mr. Trump used his bully pulpit to praise and berate companies, escalate a trade war with China and signal the economy’s strengths ahead of official announcements. In the process, his Twitter account became a singular source of market volatility.
“I just want my life to go back to normal,” said Barry Ritholtz, a money manager in New York who did not vote for Mr. Trump. “And I don’t mean pre-pandemic normal. I mean pre-golden-escalator-to-hell normal,” he said — a reference to Mr. Trump’s famous 2015 ride down the escalator in Trump Tower, at the end of which he announced his candidacy. “I just want the noise level to quiet down.”
The weekend Mr. Biden became president-elect, Mr. Ritholtz went to Twitter with one goal in mind: unfollow as many accounts in the Trump orbit as possible. In recent years, Mr. Ritholtz’s Twitter timeline had grown crowded with accounts — such as those of Mr. Trump’s children or press officers — that he felt he had no choice but to follow as he managed roughly $1.7 billion in client assets.
Like No Other President
U.S. presidents and political leaders don’t often train their focus on individual companies — at least in public. In 1962, concerned about rising inflation, President John F. Kennedy publicly excoriated steel executives for planned price increases. At a news conference in which he singled out U.S. Steel by name, President Kennedy said those executives showed “utter contempt” for the American public. The episode, which was followed by threats of antitrust investigations of the industry, spooked investors and helped set off a significant market slump.
But in recent decades, even as stock ownership became much more widespread, presidents such as Ronald Reagan and Bill Clinton — who both presided over booming stock markets — shied away from direct commentary on companies or markets. Probably, they calculated that the political reward of closely associating themselves with a bull market wasn’t worth the risk of being blamed for a potential bust that could — and in both cases did — come.
Not Mr. Trump. Almost from the moment he was elected, he adopted the stock market as a kind of real-time, multitrillion-dollar barometer of his own performance. Since taking office, he has sent tweets or retweets with stock market references more than 200 times, and made scores of statements spotlighting the market’s rise under his administration.
“Broke all time Stock Market Record again today,” he wrote on Twitter last December. “135 times since my 2016 Election Win. Thank you!”
When stocks have slumped, the president publicly framed falling prices as the work of those he considers political opponents, including the Federal Reserve, congressional Democrats and the news media. He has publicly threatened and castigated major American companies, facing off with Amazon.com over its tax payments and deals with the U.S. Postal Service; with General Motors, Ford and Carrier — then a subsidiary of United Technologies — over plans to shutter plants; and with Lockheed Martin and Boeing over the costs of fighter jets and replacements for Air Force One.
Mr. Trump has disclosed market-moving information after private discussions with executives and appeared to hint at upside surprises from economic data that his office was privy to. He has demanded that the Fed cut interest rates to prop up the market. He has treated serious policy developments — such as the twists and turns of his trade war with China — with his typical flair for showmanship, unveiling his changing positions in a hail of unexpected tweets that sent share prices tumbling on multiple occasions.
“He is very much an outlier in terms of his focus on the stock market,” said B. Dan Wood, a professor of political science at Texas A&M University, who has compiled a database of presidential statements on the economy. “I think no former president and likely no future president will emphasize the stock market as much as Trump has,” he said.
(Continues)
