- Nov 14, 2017
On Tuesday, major stock indexes plummeted more than 3 percent on renewed fears of a trade war with China — just days after Trump tweeted, following a steak dinner with Chinese President Xi Jinping, that “Relations with China have taken a BIG leap forward!”
“It doesn’t seem like anything was actually agreed to at the dinner,” JPMorgan wrote in a note to clients later that day, adding that Trump’s tweets “seem if not completely fabricated then grossly exaggerated.”
“It’s a judgment call about which announcements should be taken seriously,” said Maria Vassalou, portfolio manager for Perella Weinberg Partners’ $685 million global macro strategy.
“This situation certainly creates unnecessary volatility and complications to the investment process.”
More in the link, including several funds who have incorporated the new volatility into their investment strategy. It would seem that the financial markets have come around to the reality that the emperor does not, in fact, have clothes on.Daniel Lowen, chairman of Quantedge Capital USA Inc, said his approximately $1.5 billion hedge fund firm’s algorithms do not try to anticipate market movements from Trump administration pronouncements. “We make no attempt to interpret what we read in the news as input to our investment decisions,” Lowen said.