The Trump Effect: How the President shapes the Covid economy
So begins another week in isolation. Are you doing ok? It’s time to take a break from the baking, grab your coffee and take 5 with us as we ease you into the trading week as gently as we possibly can. Today, we’re going to be looking at the Trump Effect and the impact that the Commander-in-Tweet has on companies and stocks. We’ll then give you a quick overview of all the events you should be keeping an eye on this week. Let’s get going.
The Trump Effect
You’re probably no stranger to this one. You may have noticed that the current occupant of the Oval Office isn’t shy when it comes to telling people what he thinks. Nor is he one to waste a single character when tweeting. It’s in these small, yet ever-so public tweets that the man really shows his influence. Let’s dig in to some of the most recent examples.
Reckitt Benckiser Group Plc (RB)
What happened: Mr. Trump suggested that people try injecting themselves with disinfectant to help fight coronavirus. This was, of course, followed by “DO NOT do that under any circumstances” statement by literally every health body in the known universe. Reckitt Benckiser, worryingly however, certainly benefitted. The owner of popular brands Dettol and Hysol, posted their best-ever quarterly revenues in Q1.
Pre-Trump: 64.04 GBP (23.04)
Post-Trump high: 66.30 GBP (30.04)
The Trump Effect: +3.53%
RB, April 2020
Tyson Foods, Inc. (TSN)
What happened: The Don signed an executive order that compelled slaughterhouses to remain open and working throughout the lockdown.
Pre-Trump: 59.71 USD (27.04)
Post-Trump high: 63.81 USD (29.04)
The Trump Effect: +6.87%
TSN, 27.04–01.05.2020 (5 days)
Hormel Foods Corp (HRL)
What happened: See above! The impact was industry-wide.
Pre-Trump comment: 45.99 USD (27.04)
Post-Trump comment high: 47.81 USD (28.04)
The Trump Effect: +3.96%
HRL, 27.04–01.05.2020 (5 days)
Gilead Sciences, Inc. (GILD)
What happened: Trump announced that the FDA had been granted emergency use authorisation for Gilead’s remdesivir drug to help treat coronavirus patients.
Pre-Trump comment: 78.67 USD (28.04)
Post-Trump comment high: 84.00 USD (30.04)
The Trump Effect: +6.78%
GILD, 27.04–01.05.2020 (5 days)
The Dow Jones Industrial Average (DJI)
What happened: Trump revived the threat of new tariffs against China in response to the COVID-19 pandemic, essentially blaming the virus on them.
Pre-Trump comment: 24,400.93 USD (30.04)
Post-Trump comment low: 23,668.14 USD (01.05)
The Trump Effect: -3%
DJI, 27.04–01.05.2020 (5 days)
So, as you can see, Trump has a sizeable impact on the economy and the performance of company stock. There is a clear link between his comments and their rise or decline. It’s worth keeping an eye on what he says. Who are we kidding, you can’t afford to take your eyes off the guy for one second!
What else is going on this week?
Here are all the super-important trading events coming up this week.
● On Monday, we’ll hear from the EU re. the Harmonised Index of Consumer Prices (YoY)(EUR).
● Tuesday brings us the Chinese Consumer Price Index (YoY) (CNY), as well as the UK’s GDP (QoQ) GBP; and the US’ Consumer Price Index ex Food & Energy (MoM + YoY) (USD); and finally Japan’s GDP (QoQ) (JPY).
● The Reserve Bank of New Zealand is due to announce its latest Interest Rate Decision (NZD) on Wednesday.
● We’ll get a couple of important Australian (un)employment updates (AUD) on Thursday; as well as the US’ Initial Jobless Claims (USD).
● Finally, a bumper Friday will include a couple of EU GDP releases (QoQ + YoY) (EUR); as well as the US’ Retail Sales Control Group figures (Apr) (USD), NFP (US Nonfarm Payroll) and also the Canadian Retail Sales figures (MoM) (CAD).
The Contentworks team