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Trump holds an unprecedented presidential power

  • The president has a power no previous holder of the executive office wielded: the ability to move markets with a tweet.
  • On average, a negative tweet by the president caused an immediate short-term negative 1.2 percent move in the targeted company's stock price, a CNBC analysis finds.
  • Similarly, a positive tweet by the president generated an immediate short-term 1.1 percent move higher.
Donald Trump, Tweeter-in-Chief
Getty Images
Donald Trump, Tweeter-in-Chief

In the year since he was elected, President Donald Trump has been willing to blast or praise specific companies by name on Twitter, and that's doing measurable harm — or benefit — to the stock prices of those firms in the short term, a CNBC analysis has found.

We've never seen a president as willing to criticize American companies as Trump has in the year since Election Day. He's name-checked more than 15 companies on Twitter in that time, several of them more than once.

He has sparred with Boeing over the cost of the Air Force One program. ("Cancel order!") He's blasted the retailer Nordstrom after it announced it would drop his daughter's product line. ("My daughter Ivanka has been treated so unfairly by @Nordstrom.") And he lit into the pharmaceutical giant Merck after that company's CEO resigned from the president's manufacturing council in the wake of the president's racially tinged response to events in Charlottesville, Virginia. ("@Merck Pharma is a leader in higher & higher drug prices while at the same time taking jobs out of the U.S.").

The president has also praised companies by name when they take steps that dovetail with his agenda.

He lauded ExxonMobil in March when it announced new details of an expansion it began in 2013. ("Buy American & hire American are the principals at the core of my agenda, which is: JOBS, JOBS, JOBS! Thank you @exxonmobil," the president tweeted on March 6, before correcting the spelling to "principles" a few hours later.)

Trump lavished Ford with praise when the automaker announced new details of a long-running plan to invest billions in new plants in the U.S. ("Big announcement by Ford today.") And sometimes he has commended companies he previously blasted, apparently concluding the situation has turned to his benefit.

On Jan. 3, the president blasted General Motors in a tweet criticizing it for its production of the Chevy Cruze in Mexico. "Make in U.S.A. or pay big border tax," the president wrote. But all seemed forgiven by Jan. 24, when automakers went to the White House. "Great meeting with Ford CEO Mark Fields and General Motors CEO Mary Barra at the @WhiteHouse today," the president wrote.

These tweets aren't just empty pixels. They have a surprisingly large short-term impact on the company's stock prices.

On average, a negative tweet by the president caused an immediate short-term negative 1.2 percent move in the targeted company's stock price, CNBC's analysis found. Similarly, a positive tweet by the president generated an immediate short-term 1.1 percent move higher.

That has a real dollars and cents impact, although short-lived. Averaged out, positive Trump tweets generated $1 billion in market value for the companies in the short term, and the negative tweets slashed $1.3 billion in market value in trading shortly after the tweet.

To be sure, there are a lot of trends that move stock prices on a given day, and each situation is unique to the company involved.

But it does appear the president has a power no previous holder of the executive office wielded: the ability to move markets with a tweet.

Correction: This story was revised to correct that Trump's tweet was targeting Boeing about Air Force One.

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