Trading Trump: Reading Past the President's Tweets

President Donald Trump’s inconsistent politics have made trading the markets a challenge. But there’s an exception: He is consistent when it comes to self praise, which is a consistency that short-term traders can exploit.

Let’s take a look at a specific example from the first week of June: 

The President and his administration are privy to certain information prior to its public release. In this particular case, they had access to employment data.

At 8:30 a.m. EST on the first Friday of every month, the U.S. Department of Labor’s Bureau of Labor Statistics publicly releases the Employment Situation Summary, known as the “Jobs Report.” Senior administration members are briefed on the data the evening before

As we now know, Trump relishes in espousing his thoughts electronically – oftentimes in a knee-jerk fashion. On Friday, at 7:21 a.m., he tweeted:

Looking forward to seeing the employment numbers at 8:30 this morning.

— Donald J. Trump (@realDonaldTrump) June 1, 2018

Throughout his 17 months in office, Trump has taken personal credit for good news, both political and economic. Continuing this trend, the employment data was impressive.  In May , the U.S. unemployment rate dropped to an 18-year low of 3.8%, better than the forecast of 3.9%. Employers added 223,000 nonfarm jobs to their payrolls. And wages grew faster than expected, a sign the tighter labor market is prompting employers to pay workers more. In fact, May marked the 92nd straight month of job growth in the U.S.: a record streak. (See also: The Trump Bull Market Is Far Short of ‘Tremendous’)

Turning Tweets into Action

When Trump pats himself on the back before the release of any economic indicator, expect the numbers to be impressive. So consider adopting the following market strategies on a short-term basis:

 Go long the U.S. dollar. When a nation’s economy shows signs of strengthening, it makes sense to be long that nation’s currency.

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