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Stock Market Reactions to Presidential Statements: Evidence from Company-Specific Tweets

28 Pages Posted: 15 Jun 2017 Last revised: 27 Sep 2017

Qi Ge

Skidmore College - Department of Economics

Alexander Kurov

West Virginia University - College of Business & Economics

Marketa Halova Wolfe

Skidmore College - Department of Economics

Date Written: September 25, 2017

Abstract

When the President of the United States tweets, do investors respond? We analyze the impact of tweets from President Trump's official Twitter accounts from November 9, 2016 to July 31, 2017 that include the name of a publicly traded company. We find that these tweets move company stock prices and increase trading volume, volatility and institutional investor attention, with a stronger impact before the presidential inauguration. The initial impact of the presidential tweets on stock prices appears to dissipate over the next few trading days. Overall, the results show that investors pay attention to presidential company-specific statements even when such statements have no lasting effect on shareholder value.

Keywords: Twitter, Company-Specific Tweets, President Trump, Stock Price, Trading Volume, Volatility, Investor Attention, Event Study

JEL Classification: G12, G14

Suggested Citation

Ge, Qi and Kurov, Alexander and Wolfe, Marketa Halova, Stock Market Reactions to Presidential Statements: Evidence from Company-Specific Tweets (September 25, 2017). Available at SSRN: https://ssrn.com/abstract=2986350

Qi Ge

Skidmore College - Department of Economics ( email )

815 North Broadway
Saratoga Springs, NY 12866-1632
United States

Alexander Kurov

West Virginia University - College of Business & Economics ( email )

P.O. Box 6025
Morgantown, WV 26506
United States

Marketa Wolfe (Contact Author)

Skidmore College - Department of Economics ( email )

815 N Broadway
Saratoga Springs, NY 12866
United States
+1-518-580-8374 (Phone)

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