Volfefe index
The Volfefe Index is a stock market index of volatility in market sentiment for US Treasury bonds caused by tweets by President Donald Trump.[1][2][3]
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Bloomberg News observed Volfefe was created due to the statistical significance of Trump tweets on bond prices.[1] ABC News Online posited Volfefe could help analyze interest rate risk in the face of "unpredictable" activity on social media by Trump.[2]
Etymology
The name "Volfefe" references the "covfefe" tweet by Trump.[3][4][5] Vol stands for volatility.
Creation
Volfefe was launched by JPMorgan Chase on September 9, 2019.[1][3][4]
Methods
In forming the basis of the methodology behind Volfefe, JPMorgan Chase used software to analyse the corpus of Trump's tweets.[6][7][8] 14,000 tweets were used in the analysis to form the initial projections for their software.[6] Their analysts determined that there were direct correlations between tweets and subsequent market movements.[5][7][8] These market movements were most notably evidenced when the tweet specifically references financial matters including the US Federal Reserve.[2][9][10] The tweets issued during the working day of the New York Stock Exchange were more likely to cause a change in market sentiment; however, it was noted that the tweets can come at any time of day and thus have an effect on markets around the world.[2][9][10] Key words in tweets often include "China", "billion", "products", "Democrats", "great", "dollars", "tariffs" and "trade".[2][9][10]
Analysis
Bloomberg News noted, "JPMorgan’s 'Volfefe Index,' named after Trump’s mysterious covfefe tweet from May 2017, suggests that the president’s electronic musings are having a statistically significant impact on Treasury yields."[1]
ABC News Online commented JP Morgan created Volfefe, "to measure how much impact Mr Trump's unpredictable tweets have on US interest rates".[2]
See also
- Black swan theory
- Economic Policy Uncertainty Index
- Greed and fear
- Hemline index
- Market trend
- Probability of default
- S&P/ASX 200 VIX
- SKEW
- Twitter diplomacy
- Use of Twitter by public figures
- VIX
References
- Alloway, Tracy (September 9, 2019), "JPMorgan Creates 'Volfefe' Index to Track Trump Tweet Impact", Bloomberg News, retrieved September 10, 2019
- Chau, David (September 10, 2019), "Donald Trump's impact on market volatility tracked by new JP Morgan 'Volfefe' index", ABC News Online, retrieved September 10, 2019
- Ahmed, Saqib Iqbal (September 9, 2019), "'Volfefe': a volatility index for the Trump era", Reuters, retrieved September 10, 2019
- Gibson, Kate (September 9, 2019), "'Volfefe index' tracks market impact of Trump's tweets", CBS News, retrieved September 10, 2019
- Horowitz, Julia (September 9, 2019), "JPMorgan has created a 'Volfefe Index' to track how Trump's tweets move markets", CNN, retrieved September 9, 2019
- Khan, Yusuf (September 9, 2019), "A JPMorgan bot analyzed 14,000 Trump tweets and found they're having an increasingly sharp impact on markets", Business Insider, retrieved September 10, 2019
- Kollmeyer, Barbara (September 9, 2019), "J.P. Morgan made a 'Volfefe' index to track how Trump tweets move the bond market — here's what it shows", MarketWatch, retrieved September 10, 2019
- Ashworth, Louis (September 10, 2019), "The Volfefe Index aims to track just how Donald Trump's tweets move markets", The Daily Telegraph, retrieved September 10, 2019
- Newburger, Emma (September 8, 2019), "JP Morgan has created an index to track the effect of Trump's tweets on financial markets: 'Volfefe index'", CNBC, retrieved September 10, 2019
- "How much do Trump tweets swing the market? Check 'Volfefe'", Yahoo! Finance, Associated Press, September 9, 2019, retrieved September 10, 2019
External links
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Wikimedia Commons has media related to Donald Trump and Twitter. |
- President Trump (official) on Twitter
- Donald Trump (personal) on Twitter
- Trump Tweets at CNN
- List of Donald Trump deleted tweets on Factbase
- Trump Twitter archive Searchable database
- Trump2Cash (stock trading bot) on Twitter