When I was attending Boston University in the 1970s, my MIT buddies on the other side of the Charles River would regale me with tales of this mysterious Pentagon project known as ARPANET, the precursor to the Internet. The World Wide Web and the laptop PC didn’t exist. To produce my term papers, I used a Stone Age relic known as a “typewriter.”

Of course, the market-moving power of Twitter was never taught in my finance classes. Now we live in a Brave New World of investing, in which impulsive tweets pecked out on a smartphone can directly affect trillions of dollars.

Stocks rose yesterday, underscoring the resilience of bullish sentiment. In pre-market futures trading this morning, the three main U.S. stock market indices were all poised to open in the green. Looming over it all, you’ll find the Tweeter-in-Chief.

President Trump yesterday took to Twitter to resume his criticism of monetary policy. Trump on Tuesday again pressured the Federal Reserve to further lower interest rates, saying it would boost exports. Trump tweeted:

“Would be sooo great if the Fed would further lower interest rates and quantitative ease. The Dollar is very strong against other currencies and there is almost no inflation. This is the time to do it. Exports would zoom!”

Last week, the Fed held interest rates steady and suggested that monetary policy would not change soon. Trump was not happy with the central bank’s decision. As the president gears up for re-election, he would like to see stimulus applied to the economy (as any politician would).

However, Fed Chair Jerome Powell and his colleagues have been careful not to overstimulate our economy. That’s their job. The Fed operates under a mandate from Congress to “promote effectively the goals of maximum employment, stable prices, and moderate long term interest rates.” It’s commonly called the Fed’s “dual mandate.” Regardless, the president persistently uses Twitter to challenge the Fed’s autonomy.

The Wall Street establishment recognizes the market-moving power of Trump’s tweets. JPMorgan Chase (NYSE: JPM) announced in September that it had created what the bank calls its “Volfefe Index,” named after Trump’s infamous and still inscrutable “covfefe” tweet. JPMorgan’s new Volfefe Index dissects how Trump’s tweets affect the financial markets.

As JPMorgan analysts explained in announcing the index:

“Trade and monetary policy have become an increasing focus for the executive branch … via this carefully scrutinized social media platform. In response, a broad swath of assets from single-name stocks to macro products have found their price dynamics increasingly beholden to a handful of tweets from the commander-in-chief.”

The bank said its findings allow it to “construct statistical aggregates — a Twitter-vol index — with which to monitor and quantify shifts in the market environment.”

Read This Story: Volatility…in 280 Characters or Less

Since his surprise election in 2016, Trump has on average posted more than 10 tweets a day (13,000 tweets since taking office) to his nearly 64 million followers. JPMorgan’s Volfefe index tracks and precisely explains Trump’s ability to move markets through his steady stream of daily tweets.

President Trump’s predictable cause-and-effect capability to send stocks up or down by virtue of tweeting also has raised concerns in the media and Congress about potential market manipulation and insider trading. It only stands to reason, if you knew about a presidential tweet in advance, you could make a killing.

Fed bashing boosts the S&P 500…

According to a study released on December 5, “Trump’s tweet frequency has a positive correlation with increases in the S&P 500, and this relationship is statistically significant.” The study, released by the research group Clever, assessed the past three years of the president’s Twitter posts and compared them to changes in the stock and bond markets.

Notable excerpts from the report:

• 10-year Treasury yields drop when Trump tweets at the Federal Reserve, and this relationship is statistically significant. Declines in 10-year Treasury yields also correlate to dips in mortgage rates.
• The Federal Reserve is affected by political pressure from Trump’s tweets, according to the National Bureau of Economic Research (NBER).
• The Fed’s reactivity to the president’s tweets can cause market turmoil, as their autonomy is questioned (NBER).
• China’s manufacturing economy, measured by the HSBC Manufacturing Index, dips when Trump tweets include terms like “China.”

The bull market still lives, but it’s increasingly vulnerable. We’re witnessing a global asset bubble and the longer it goes on, the more susceptible it becomes to unexpected external shocks. Never lose sight of the fact that a single tweet has the ability to drastically affect the markets or individual stocks.

Read This Story: Are We Witnessing a Market Melt-Up?

When Trump tweets more, the stock market typically does better. S&P 500 stock prices rise an average of 19.5 points for every additional daily tweet.

When Trump tweets about the Federal Reserve, S&P 500 stock shares tend to close 43 points higher (see chart).

Holding Big Pharma accountable…

Trump doesn’t just tweet about finance and the economy, of course. Everything is fair game. A regular topic of Trump’s tweets is the opioid crisis. The president recently tweeted:

“My Administration is fighting hard to end the Opioid Crisis. Join with us by disposing unused or expired prescription medications at over 4,000 locations across this great Country.”

Which brings me to an historic wave of opioid-related lawsuits against Big Pharma that’s funneling billions of dollars in reparations into 46 U.S. states.

According to news reports Tuesday, the Sackler family withdrew more than $10 billion from their company Purdue Pharma, which has been embroiled in the opioid scandal.

The Sacklers distributed the money among trusts and overseas holding companies, to avoid massive settlements. More than 2,800 lawsuits seek to hold Purdue accountable for the opioid crisis.

The Centers for Disease Control reports that 115 Americans die from opioid-related causes, every single day, outpacing the number of deaths from vehicular accidents or firearms. The Sacklers and other Big Pharma payers now face an expensive day of reckoning.

But amid this horrific mess, here’s the good news: Our research team has discovered a way to collect high-dollar monthly payouts from state governments whether there’s a drug settlement or not…and no matter which state you reside in. Click here for details.

In the meantime, pay attention to President Trump’s tweets but don’t get rattled by them. Fundamentals and hard data eventually win the day.

Questions or comments? Drop me a line: mailbag@investingdaily.com

John Persinos is the managing editor of Investing Daily.