In the following post, D’Amore-McKim School of Business Professor Jeffery Born answers questions about his recent research that examines the impact that tweets from President Donald Trump have on a Semi-Strong Form (SSF) Efficient Market.
Q: Which tweets by Trump did you investigate?
A: We focused on tweets by President Donald Trump, which mentioned publicly traded firms (n=10) from the date of his election on November 8, 2016, to his inauguration on January 20, 2017. Fifteen tweets were separated by enough time for the stock market’s response to the information to be considered independent.
Q: Why did you look at these events?
A: In real time, there were many in the press who reported that the President-elect’s tweets were driving the firm’s stock price in a significant fashion. None of the press reports contrasted these movements against the same day movement in broad market averages, nor did the press report how risky the firms were (compared to the broad market). Failing to control for movements in the broad market and risk limits the conclusions one can draw the firm responses.
Recent bullish stock market activity signals that concerns of a near-term recession are low. Given the use of gold in a number of manufactured goods, it is likely that Trump’s influence will bring balance to gold prices.
Copper prices have already jumped in anticipation of stronger demand during the Trump administration. The infrastructure spending that Trump is calling for is going to spill over into demand for industrial metals, and several have already incorporated this into their prices since the election. Thus, I don’t seem much upside in copper.
The ‘sleeper’ since the election has been silver. Silver isn’t the metal of choice when fears start to rise—gold is. Silver is much more of an industrial metal, and I think it is best poised to benefit from the expansion the market expects during the early Trump administration.
In the following post, D’Amore-McKim School of Business Associate Academic Specialist Steven Kursh discusses how technology will influence the future of the financial and insurance services industries.
We stand today on the precipice of significant changes in the ways that financial and insurance services are provided to businesses and consumers. Many of us are already familiar with Apple Pay or Samsung Pay mobile payments solutions. Some of us may have heard about BitCoin, a peer-to-peer technology for managing transactions between parties; Blockchain, a decentralized database that enables transparency with the potential to reduce fraud; or, perhaps, RoboAdvisors, which automates investment management. And you may well have already made some personal investments through crowdsourcing sites like Kickstarter.
These are all examples of what is broadly called FinTech, an evolution in the financial services and insurance industries that will impact nearly all of us, even consumers and enterprises in emerging economies.  Read more…