Stock Predictions In Trump Era: Beyond Hype And Headlines

I Know First Research Team LogoThis article was written by the I Know First Research Team.

Among the features most commonly ascribed to the US President Donald Trump are words like “unpredictable”, “erratic” and “disruptive”. The President himself said back in the day that unpredictability was a strategic imperative, and the United States had to stop telegraphing every move it made on the global scene. For the stock market, this means increased volatility, as stocks can surge or slump with a single tweet from Disruptor-In-Chief. But what happens when an advanced stock predictions AI and the Trump-era news face off? Is the White House unpredictable enough to beat the neural networks? Keep reading to find out…

White House, Washington DC

The I Know First Predictive AI

The use of AI is blossoming across the financial industry, its applications diverse and numerous. Among other things, AI is utilized for stock predictions, as a high-tech crystal ball for investors and traders to look in as they strategize and pick their targets. One of the leaders in this sphere is an Israeli company called I Know First. It trained its proprietary deep learning AI algorithm on a massive database covering 15 years of trading, drawing upon genetic programming and chaos theory. The term deep learning means the AI makes use of multi-layered artificial neural networks, complex functions in which the input goes through a multitude of transformations.


The AI views the stock markets holistically, as complex systems where minor events can have major repercussions. It models the behavior of thousands of assets, working with over 10,500 financial instruments, including stocks, ETFs and national currencies. These predictions are based on fully objective fresh trading data, with no human bias or emotion entering the system at any point. The algorithm’s running cycle includes a self-learning stage, where it re-adjusts its models and formulas to the market reality, if necessary. This allows it to keep track of its own performance and increase the accuracy of its predictions with every iteration.

The forecasts are presented as a heatmap with numeric signal and predictability indicators; the former shows how a stock is supposed to behave against the others on the forecast, and predictability shows how accurately the algorithm has been able to predict the previous movements of the asset. The time horizons vary in a range from 3 to 365 days, covering short-term, mid-term and long-term outlooks.

The company makes sure to keep publishing evaluation reports, monitoring the AI’s accuracy rates across various investment universes. The most recent ones have demonstrated the algorithm’s reliability in predicting AAPL and the S&P 500 index.

AI Stock Predictions In The Age Of Trump

Now, going back to the era of disruption and its turbulent information landscape, we can note that the stock market has just gone on a major plunge. The nosedive came on the back of President Trump’s decision to hit an extra $300 bln. worth of Chinese exports to the US with 10% tariffs – and its fallout. Announced on Trump’s Twitter account, these measures are to come into power in September, with more tariffs on the horizon if there is no progress in the talks with China.

This escalation of the trade war has prompted China to devaluate renminbi, its national currency, to one of the lowest levels in recent years. Washington retaliated by officially designating China as a currency manipulator. All this has prompted the stock markets to go down, as it does not seem to suggest that the US-China trade war is about to be resolved peacefully. Instead, from where we are now, it seems that the confrontation is set to continue, with more pain for both economies very much on the cards in the future.

Relying on its self-learning component, the I Know First AI has been able to anticipate all this. Just recently, the company’s clients got an advance warning that the S&P500 is about to take a plunge. At the same time, they received a positive prediction for VIX and other indexes associated with high volatility.

In the run-up to this recent uptick in tensions, the algorithm has also been able to pick up the trading signals for the optimal investment options. For example, it identified XPO Logistics, one of world’s largest transport and logistics companies, as one of the top investments. From August 1 to August 2, 2019, it surged all the way from 64,85 to 72.79 to enter another period of back-and-forth volatility, which made it a good pick for longing, with a quick sell-off in mind.

The PGP stock, in the meantime, IPG Photonics Corporation being a major player on the high-power laser market, took a slump starting on August 2, 2019, gradually sliding from $125,97 to below $120. The I Know First AI identified it as one of the best picks for shorting on August 1, before President Trump’s tweet, which is, as we can see, quite consistent with the stock’s behavior. The same forecast also included DAn among the top picks for shorting, and Dana Corp’s stock indeed plunged from above $16 to around $14 in the next few days.

A Look Further Back

What we just discussed was not the first time when the I Know First AI was able to successfully predict an upcoming storm. On May 5, 2019, Donald Trump announced that the tariffs against China will be raised from 10% to 25%.

This sent the market into a similar conundrum, sending stocks on a nosedive prompted by concerns over the ever-escalating trade war. The I Know First algorithm has been able to anticipate the upcoming plunge in its forecasts issued on May 2, three days before the tweet that sent the machine into motion.

Before that, the AI has been able to predict the negative trend that hit the markets in September and November 2018. These forecasts came amid a time when the US was enjoying a period of rampant economic growth and optimism, which gave birth to articles like this one, with a headline that credits President Trump with pretty much putting US growth on overdrive mode.    

The run-up to the 2016 elections saw quite a different picture. At the time, the US media were full of doom and gloom regarding what would happen to the US economy should Trump take the Oval Office. Trump’s win would send shockwaves across financial markets, one article warned, and would drag the global economy down. Trump’s win would lead to markets shrinking, Citigroup warned, and so did The Guardian, viewing the initial slump as a sign that Trump would be bad for growth. Politico joined the outcry, citing research showing that Trump would be a disaster for the markets.

Granted, there was also coverage that, while giving some room for apocalyptic forecasts of an imminent crash and concession, also said some industries would flourish, but the overall tone was negative.

The I Know First AI, however, went against the tide by delivering a bullish forecast for the US economy under a Trump Presidency. It has also shown high confidence in the outlook of the US steel industry and a range of other companies in a wide variety of earlier forecasts. This is indicative of an accuracy developed over years in operation, with every new iteration bringing the AI’s accuracy higher. As a result, the I Know First Ai has grown sophisticated enough to help investors navigate even the most turbulent of times.