A Trump tweet can move markets.
After President Trump slammed Lockheed Martin on Dec. 23 for the “tremendous cost” of its fighter jets, the company’s stock price dropped $2.75 (2 percent). Less than two weeks later, he blasted General Motors for assembling cars in Mexico, and the automaker’s share value fell 24 cents (.7 percent). Then he took aim at Toyota for building a new Mexican plant, delivering an apparent 64-cent blow (.07 percent).
But Nordstrom, Trump's latest Twitter target, seems largely immune to the president’s public bashing. On Wednesday morning, he criticized the retailer for dropping Ivanka Trump products — and its stock value climbed.
My daughter Ivanka has been treated so unfairly by @Nordstrom. She is a great person -- always pushing me to do the right thing! Terrible!
— Donald J. Trump (@realDonaldTrump) February 8, 2017
Nordstrom shares took a slight dive before quickly recovering. Less than two hours later, the price had crept past its pre-tweet standing. By 4:20 p.m., it was up more than 4 percent:
So, is the Trump tweet losing its power? Not necessarily, said Kimberly Whitler, a marketing professor at the University of Virginia.
Nordstrom, for example, is no Lockheed Martin, which sells aircraft to the United States. This time, Trump wasn’t coming to the defense of taxpayers, who ultimately foot the bill for the fighter jets the president called overpriced. He looked to be standing up for his daughter, whose business relationship with the retailer has come to a halt. That has nothing to do with economics or public policy.
Of course, nobody knows exactly why stock prices go up or down on any given day. And perhaps Nordstrom will take a slide later.
While Trump could theoretically threaten Lockheed Martin’s federal contracts, however, or push measures that shake the auto industry — moves that could dampen a firm’s performance and therefore sting shareholders — ranting about a clothing line is less likely to unnerve investors, Whitler said. Plus, she added, Trump regularly hurls insults.
“Over time, consumers become numb to a message,” she said. “At some point, with the velocity of Trump’s tweets, it’s likely that investors may become more ‘numb’ to his tweets and react in a more muted fashion.”
After the president’s Nordstrom barb, the company began trending on Twitter. People began voicing their desire to shop:
I guess I now exclusively shop at Nordstrom
— sonia saraiya (@soniasaraiya) February 8, 2017
I didn’t NEED an excuse to shop at Nordstrom but...
— Ana Marie Cox (@anamariecox) February 8, 2017
Have I mentioned recently that @Nordstrom is one of my favorite department stories. Must shop there more, starting, you know, today.
— Deborah Blum (@deborahblum) February 8, 2017
I'm shopping at @Nordstrom today! If you can't get to one, shop online--they have free shipping and free returns. Wonderful!
— Gloria Fallon (@GloriaFallon123) February 8, 2017
Everyone shop at Nordstrom this weekend please. If you can't think of anything to buy, I'm a Large. Thank you. https://t.co/JOFHx6dW7e
— Jeff Dwoskin (@bigmacher) February 8, 2017
It’s unclear how social media, particularly partisan social media, could influence investors. Nordstrom’s true armor, though, could be its customers. The company’s target shoppers are generally women, above-average earners, millennial to middle age. Trump voters, meanwhile, were overwhelmingly older men, most of whom lacked college degrees (which are tied to higher salaries).
Mary Embry, a retail merchandising professor at Indiana University, said investors who understand Nordstrom probably sense a Trump tweet wouldn’t deter the company’s consumer base.
“Politics certainly do matter in fashion,” she said, “but the strength of the Nordstrom stock validates the strength of the decision making of that retailer that is based on absolutely knowing its customer.”
Also, she said: “The president is not seen as having any particular expertise on fashion.”
Lockheed Martin has flourished since the Trump tweet, growing from $250.06 in share value to $257.33 on Wednesday afternoon. Toyota has also bounced back, from $113.26 to $120.58. General motors has held steady ($35.24 to $35.46).
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