As published on markets.business.insider.com, Thursday November 20, 2019.
Hedge funds are paying less and less attention to the president's tweets.
"I don't think we really trade on Donald Trump's tweets, for the most part," Said Haidar told Financial News. Haidar's namesake fund Haidar Capital Management manages $550 million in assets.
"The problem is, if Trump tweets he wants a weaker dollar and the dollar sells off, unless he's doing something about it, it doesn't really matter that this is what he wants," Haidar told the news outlet.
Hedge funds are dubbed the "smart money" because they're typically quicker than the market in general to spot hot trends and profitable trades.
The report comes amid increasing amounts of scrutiny on the president's tweets, due to the zig-zagging nature of US policy on China. George Papamarkakis, co-founder of London-based global macro hedge fund North Asset Management, expressed a similar sentiment.
"In the first year of his presidency we tried to, not necessarily trade, but certainly take [his Twitter] into account, and then we stopped," Papamarkakis told Financial News. "A lot of the tweets turned out to be rhetoric that didn't pan out."
As traders cast increasing doubt on Trump's bombast when it comes to tariffs, market watchers now have multiple resources to test their theories: Banks including JPMorgan created an index just to track the effects, as did Bloomberg.
"More attention is paid to Trump's tweets by discretionary managers, rather than systematic hedge funds that deploy machines to guide trading decisions," Financial News wrote.
Analysts including Neil Wilson are also starting to wonder. Trump threatened a tariff rise on China at the Economic Club of New York earlier this month, and markets didn't react for hours.
Perhaps like the perpetual drunk droning on, the regulars have stopped listening," said Wilson, chief markets analyst at Markets.com in an email to Business Insider at the time. "On trade, a phase one deal 'could happen soon.' Well, we've been hearing that for months."
Markets may be numbing to Trump's bombast.
"We're less responsive to these kinds of claims, but not entirely so," said Craig Erlam, senior market analyst at Oanda, has said to Business Insider. "It's difficult to know to differentiate between truth, lies, and exaggeration."
Han Tan, market analyst at FXTM told Business Insider that what Trump says should be viewed "with the utmost caution," adding "investors are well aware that multiple rounds of trade talks have only led to the current dismal situation, whereby repeated tariff threats have become the norm."