Trump tweets, markets move

U.S. leaders are used to having their words move markets, but president-elect Donald Trump may be taking it to a different level.

A single Trump tweet criticizing Lockheed Martin Corp.’s F-35 fighter jet program on Monday sent shares of the defence contractor down by as much as four per cent, at one point shaving more than US $4 billion off the company’s market capitalization.

“The F-35 program and cost is out of control. Billions of dollars can and will be saved on military (and other) purchases after January 20th,” Trump wrote at 8:26 a.m. on Monday.

Lockheed shares regained some of that drop and closed down about 2.5 per cent at US$253.11 in New York.

“Here’s the challenge with Trump ... because he’s a tweeter, he likes thinking out loud,” said Walid Hejazi, an associate professor at the University of Toronto’s Rotman School of Management.

“So he keeps sending these tweets about what he is thinking and as we see, it has real, real effects on the markets.”

Trump’s tweets can be beneficial for companies, too.

On Dec. 6, the billionaire tweeted about his meeting with Masayoshi Son, chief executive of the Japanese telecommunications and Internet giant SoftBank Group Corp. “Masa (SoftBank) of Japan has agreed to invest US$50 billion in the U.S. toward businesses and 50,000 new jobs,” Trump tweeted.

Since then, SoftBank shares in Tokyo have risen 15 per cent to a year-high of 7,825 yen on Dec. 9, on hopes that the company will have better luck striking a mega-deal in the U.S.-mobile phone market with Trump in the White House.