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Twitter tool sees exponential rise in business post Trump victory

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Danny Watkins, CEO of Market EarlyBird, a Twitter monitoring service, reports exponential growth in sales to banks and traders in the last six months as they try to keep up with Donald Trump and his ‘fire from the hip’ Tweets.

The firm writes that his impromptu tweets, that have the power to disrupt and move markets instantly, have panicked investment firms dedicated to proprietary trading.

“His social media rantings have prompted them to look for options to enhance their ability to quickly position assets in an advantageous direction following a tweet from The Trump. Unpredictable Twitter attacks by a world leader mean major companies, banks and traders need an incoming fire early warning system to prevent the destruction of share prices,” Market EarlyBird writes.

“Trump is cavalier and unpredictable. He might Tweet something that raises the prospects of a US company with UK suppliers; he might Tweet something that is viewed positively for international trade or he might Tweet something that will have a negative effect on global security. Any of these actions could have a significant impact on global markets including the UK,” says Watkins.

“Events such as Brexit and the US election each saw a surge in demand, and Trump’s continuing determination to ‘speak direct to the people’ has highlighted the need for traders to get Tweets first hand”.

Market EarlyBird points out that within a bank, traders can’t simply be given a Twitter account. The firm writes that critical to banks’ use of Twitter is the prevention of secret messages (think LIBOR fixing) or outgoing Tweets, but also the guarantee of confidentiality – nobody outside can track traders’ Follow lists. The challenge then becomes the sheer volume of Tweets to be monitored.”

The firm’s EarlyBird’s software analyses the form, style, and content of Tweets as well as sender reputation to identify financially-relevant Tweets. Key stories are curated as they emerge, ensuring breaking financial news is relayed to those trading or covering equities instantly, while Retweet velocity is also monitored to quickly notify users if a Tweet is about to go viral, even if they are not actively looking at EarlyBird.

The firm believes that the impact of unpredictable social media engagement can be significant, and gives the following examples where Donald Trump’s Tweets have affected share prices:

Dec 6th 2016 “Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more then USD4 billion. Cancel order!”. The market reaction was that the stock slid to a premarket low of USD149.75, down -1.6 per cent from previous market close.

Dec 7th 2016, Pharmaceutical and biotech stocks plummeted after Trump comments that the US would ‘save millions’ following a revised bidding process. The market reaction from this one was that the Nasdaq Biotechnology Index fell 3 per cent in New York, Standard & Poor’s 500 Pharmaceuticals, Biotechnology & Life Sciences Index dropped 1.7 per cent, representing the biggest one-day drops for the indexes since October. Bristol-Myers Squibb Co dropped 5.3 per cent to USD56.80 in New York, the steepest decline in three months. Novo Nordisk A/S fell 5.2 per cent to 242.10 kroner at 10:25 a.m. in Copenhagen trading. And Dr Reddy’s Laboratories Ltd lost as much as 3.3 per cent in Mumbai.

Dec 12th 2016, “The F-35 program and cost is out of control. Billions of dollars can and will be saved on military (and other) purchases after January 20th”. Market reaction was that the stock slid to an intraday low of USD245.50 down -5.4 per cent from previous market close.
 
 Jan 3rd 2017, "General Motors is sending Mexican made model of Chevy Cruze to US car dealers-tax free across border. Make in USA.or pay big border tax!" The market reaction was that shares of GM, which were at USD34.38 in pre-market trading, fell about one per cent; however, shares bounced back, rising one per cent before the market opened on the 4th Jan.

Market EarlyBird writes that from next Friday and for the next four years, potentially longer, market traders and financial bodies will have to be on their toes to react to whatever the US President throws at the US economy and globally trading companies.” With the upcoming French elections showing an early lead for Marine Le Pen and continuing uncertainty about BREXIT, financial institutions need to be prepared and armed as best they can be to take on the ever-evolving face of global markets and economics.”

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