In typically British style, the Royals displayed a stiff upper lip and rolled out a banquet of Windsor lamb for Donald and Melania on Monday night.
By morning, the commoners were assisting with a down-trou of a tweeting Trump, under the watchful eye of Lord Nelson atop his very large column.
British wit never disappoints.
The President of the United States and his First Lady each has a Twitter account. His is called POTUS and hers FLOTUS. To confuse things, he has a second account "@realdonaldtrump". The first account has 26 million followers and the second has 60 million. Melania attracts 12 million.
There is much grumbling as Obama is still more popular, with 106 million followers.
Tweeting is the favoured form of communication and the "Twump" show began with London's mayor labeled a loser and the nation being told to leave Europe without a deal.
Back onshore in New Zealand, how does this political tweeter affect us?
Quite simply, Trump has the ability to move markets. He creates mini-shocks and rallies, adding or wiping millions or billions of dollars off sharemarkets in 140 characters.
Within our KiwiSaver accounts we own international shares – especially those with balanced or growth portfolios. Seeing the media headlines after a Trump tweet can be terrifying for anyone's future retirement hopes.
Here are a few examples:
1. Boeing and Lockheed Martin (Dec 2016). Trump criticises cost-over runs of Air Force One and F-35. Lockheed lost $6 billion in value and Boeing lost $1.5 billion. Both companies' share prices have outperformed the market since these tweets due to a government defence spend of $120 billion.
2. Toyota: (January 2017). Trump tells Toyota they'll face border taxes if they make Corolla cars in Mexico. Within five minutes $1.8 billion was wiped off their share price. In January 2019 Trump congratulated Toyota for investing in the US and creating 4000 jobs. It hardly made market headlines.
3. Amazon: (August 2017). Trump says Amazon is damaging tax-paying retailers and costing jobs. Amazon shares fell 1 per cent, or $8.6 billion, but recovered half these losses on the same day.
4. Oil prices: (April 2018). Trump says oil prices are artificially high. Brent Crude fell 0.6 per cent, but recovered by the end of the day
5. Trade wars: (March 2018). Trump tweeted that trade wars are good and easy to win. The Dow Jones Industrial Average fell 300 points, but ended the day only 71 points down. Several trade-war tweets have caused widespread movements in currency markets.
Market "twumping" has become such a phenomenon, Bloomberg, the financial data company, has a page where tweets are displayed on a phone and a chart shows sharemarket movements as you scroll through.
Trump is not alone. In 2018 Kylie Jenner (one of the Kardashians) mused over social media itself."So does anyone else not open Snapchat anymore? Or is it just me…"
Two billion dollars was wiped off the share price of Snapchat. Whoops. Unlike Trump, she possibly didn't mean for that to happen.
Trump changes technical market theory
Efficient Market Hypothesis is well-trodden ground for finance students.
Developed by Eugene Fama in 1965, it states that all public information is instantly absorbed into share prices before an investor has time to trade.
A 2018 paper by Nottingham University student Krishan Rayarel carried out a study of Trumps tweets and discovered they disrupt this hypothesis.
The study shows "the effect of positive and negative tweets on abnormal returns is statistically and economically significant". It was found that the market is inefficient as it takes two to three days to incorporate tweet-info into prices.
On a practical level this seems to make sense. An earnings announcement provides traders with measurable financial data. A Trump-tweet has a large abstract bubble around it. Is he serious? Is this just hot air and he'll deny he meant it that way? No wonder the market dithers and splutters.
Don't invest with a political view
When Trump came to power half of America was elated and half depressed. Studies by the US National Bureau of Economic Research have shown in the six months following the election, Republicans increased their exposure to markets, while the Democrats swung towards bonds and cash. Political emotion drove asset allocation.
The S&P 500 is up 23 per cent since Trump took over in 2017, but this doesn't show his supporters were clever and the opposition stupid. It shows both sides were mad.
Political beliefs shouldn't sway asset decisions. Warren Buffet, ranked third on the 2019 Forbes Rich List (net worth $120 billion) recently pointed out he'd successfully invested under 14 presidents; seven Republican and seven Democrats. He commented that most investors could put aside religion, but very few manage to ignore their political bias.
Should investors worry about Trump?
The short answer is no. Social media seems to create more volatility and market inefficiencies for small snapshots of time. Over-reactions from tweets tend to correct fairly quickly as markets adjust to real facts and actions. Love him or hate him, don't let the twumps put you off international investments.
Janine Starks is a financial commentator with expertise in banking, personal finance and funds management. Opinions in this column represent her personal views. They are general in nature and are not a recommendation, opinion or guidance to any individuals in relation to acquiring or disposing of a financial product. Readers should not rely on these opinions and should always seek specific independent financial advice appropriate to their own individual circumstances.