If President Donald Trump wants to keep his strong stock market gains, he may want to stay off Twitter.

Days when Trump tweets a lot are associated with negative stock market returns, Bank of America Merrill Lynch said Tuesday in a report.

The brokerage’s chief equity strategist, Savita Subramanian, wrote in a note that “since 2016, days with more than 35 tweets (90 percentile) by Trump have seen negative returns (-9bp), whereas days with less than 5 tweets (10 percentile) have seen positive returns (+5bp) — statistically significant.” A basis point is 0.01 percent.

In other words, when Trump tweets more than usual, the stock market tends to fall slightly, on average.

“Trade talk, political campaigning and tweets have contributed to volatility, from China to Fed policy to tax policy,” she wrote. “And new tariffs announced in August indicate downside risk to our 2019/20 EPS growth forecasts of +2%/+7%, where indirect impacts from hits to corporate or consumer confidence could be significant.”

To be sure, while an active Trump on Twitter can disrupt markets with sudden pronouncements on China trade or the Federal Reserve, he has still been good for the stock market overall. The Dow is up 42% since the 2016 presidential election and 31% since his inauguration.

It’s down 1.6% since May 5, however, when the president shocked financial markets by announcing on Twitter that he would increase tariffs of 10% on $200 billion to 25%, dashing hopes that the world’s two largest economies were nearing a trade resolution.

Since then, Trump’s go-to report card for a strong economy has been far more volatile as his protectionist trade policies and trade war with China take an ever-growing toll on American business sentiment, capital expenditure and the stock market.

Trump doubled down on his tough trade stance on Tuesday, tweeting “We are doing very well in our negotiations with China. While I am sure they would love to be dealing with a new administration so they could continue their practice of ‘ripoff USA'($600 B/year),16 months PLUS is a long time to be hemorrhaging jobs and companies on a long-shot.”

“And then, think what happens to China when I win. Deal would get MUCH TOUGHER!” he added.

The Dow was down more than 350 points at 12:55 p.m. ET on Tuesday.



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