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 cited Tuesday afternoon’s tweets from Trump saying he was ending broad stimulus talks and then Tuesday night’s tweets supporting a piecemeal approach.
Cramer suggested om CNBC 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,” Cramer advised.
“This is what happens if you invest by tweet,” Cramer said, as stocks soared 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.”
Meanwhile, U.S. stocks closed sharply higher on Wednesday as investors regained hope that at least a partial deal on more U.S. fiscal stimulus may happen.
After abruptly calling off negotiations on a comprehensive bill on Tuesday, Trump later that day urged Congress to pass a series of smaller, standalone bills that would include a bailout package for the airline industry battered by the coronavirus pandemic, Reuters said.
"The only reason we were down yesterday was the tweet from President Trump, which he walked back last night. That's why the market started off stronger and continued stronger. I think there's full-blown expectations that some form of stimulus agreement is going to occur sooner than later," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
Top White House officials downplayed the possibility of more coronavirus relief, while House Speaker Nancy Pelosi disparaged Trump for backing away from talks on a comprehensive deal.
Indexes held gains after the Federal Reserve released minutes from its last policy meeting. The minutes showed U.S. central bankers, having agreed unanimously in August on a broad new approach to monetary policy, were divided in September over how to apply their new principles in practice.
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