News of Steve Bannon’s exit from the White House sent up a round of cheers on the floor of the New York Stock Exchange.
The cheers were loud enough that they could be heard in the background of CNBC’s broadcast from the NYSE headquarters in lower Manhattan.
The joy among the traders didn’t last long. Shortly after the news broke, the major stock indexes all began to slide. They had been rising since about 11 a.m.
You can watch the video from CNBC’s broadcast here.
It may have been a classic case of “buy the rumor, sell the news.” Rumors of Bannon’s departure had been circulating all morning and several of CNBC guests and anchors had attributed the rise to the rumors. The day before a similar scene had played out, when the market’s second largest downturn all year was blamed for rumors that White House chief economic advisor Gary Cohn might resign.
In the mindset of many financial journalists and analysts, as well as many of the floor traders at the NYSE, the success of globalists like Gary Cohn and the setbacks of economic nationalists like Bannon should be good for equity prices. That theory was severely tested, however, when stocks began sliding immediately following confirmation that Bannon was out.