Investors like Chanos wonder if Trump’s positive trade talk is ploy to distract from impeachment

As U.S. stocks climb and fall in response to President Donald Trump‘s words (and tweets), some traders are voicing skepticism over the validity of the president’s claims on Wednesday about making progress in trade negotiations with China.

With the Dow Jones industrial average sinking on Wednesday and traders poring through a rough transcript of Trump’s controversial call with Ukrainian President Volodymyr Zelensky, the president told reporters that a deal with China may come “sooner than you think.” Trump’s comment sent the Dow positive, trading up more than 150 points.

The trade war between the U.S. and China has escalated steadily this year, with hundreds of billions of dollars in goods under heavy tariffs from both countries. Trump’s administration has often touted progress in the dispute – only to later impose stronger penalties on China. The two countries’ top negotiators are expected to meet in two weeks to resume talks and investors are closely watching to see if a resolution can be found.

Noted short-seller Jim Chanos, who goes by the pseudonym “Diogenes” on his Twitter account “@WallStCynic,” called out the move higher in U.S. stocks on Wednesday as a gullible response to the president’s hinting.

“And..3…2…1…The stock market falls for the “China Trade Deal” line again,” Chanos tweeted. “I have been reliably told that AI-driven trading programs are “constantly learning and adapting”. Lol, ok.”

Chanos’ skepticism has merit, KKM Financial CEO Jeff Kilburg told CNBC, as computer automated trading is “certainly uber sensitive” to any Trump reaction.

“I think he brings up a great point, that the [algorithms] do create the initial reactions but humans do have the ability overcome those reactions,” Kilburg said.

To be sure, the market may have also been helped because the Ukraine call memo does not appear to show an explicit quid pro quo by the president. But more details are sure to come out and this impeachment inquiry could grind on market sentiment for the rest of the year.

Overall, Kilburg says the intraday swings in U.S. stocks are “without a doubt” the result of Trump trying to boost the market.

“The best way to extinguish any of the impeachment conversation is to create a distraction in the markets,” Kilburg said. “It’s a little bit of a magic show.”

“Love it or hate it, his focus is on the market, and it will be his focus through 2020,” Kilburg added.

The White House did not immediately respond to CNBC’s request for comment.