Investing

Cramer: You're going to be on the 'wrong side of the trade' if you invest based on Trump’s tweets

Key Points
  • CNBC's Jim Cramer on Wednesday warned investors not to buy or sell stocks based on what President Donald Trump tweets.
  • The "Mad Money" host cites Tuesday afternoon's tweets from Trump saying he was ending broad stimulus talks and then Tuesday night's tweets supporting a piecemeal approach.
  • "Can people be that ignorant? He's arbitrary and capricious on Twitter. So if he says 'sell' on Twitter, you buy," Cramer advised.
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Jim Cramer: Don't invest based on Trump's tweets

CNBC's Jim Cramer on Wednesday warned investors not to buy or sell stocks based on what President Donald Trump tweets.

The "Mad Money" host cites Tuesday afternoon's tweets from Trump ending broad stimulus talks, which sank stocks, and then Tuesday night's tweets supporting a piecemeal approach, which boosted stocks.

"This is what happens if you invest by tweet," Cramer said on "Squawk on the Street," as most stocks in the S&P 500 opened higher Wednesday. "If you're just going to look at the president's tweet, you're just going to end up on the wrong side of the trade."

Cramer suggested that trading on a presidential tweet is a risk because there's no way to discern nuance in Twitter posts. "Can people be that ignorant? He's arbitrary and capricious on Twitter. So if he says 'sell' on Twitter, you buy," he advised.

On Tuesday night, hours after signaling the end to stimulus talks, Trump's tweets expressed an openness to providing U.S. airlines with billions of dollars in aid and extending the small business assistance effort known as the Paycheck Protection Program. He also said he was ready to sign a standalone bill to provide stimulus checks to Americans. 

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke on the phone Wednesday morning about a potential standalone relief bill for airlines, according to Pelosi spokesperson Drew Hammill. Pelosi asked Mnuchin to review a previously rejected bill and then continue the conversation, Hammill said on Twitter.