In a stunningly swift response to Trump’s remarks at a press conference on Tuesday, CEOs quit his White House councils and made statements that condemned his words.
After the CEOs abandoned him, market rumors swirled that Cohn was disgusted and would leave the White House, and there was speculation other cabinet members and aides could follow him. That led to a sharp drop in stocks Thursday. The White House denied that Cohn was leaving. Cohn is also in the running to be the next Fed chairman, and strategists say that’s one reason he won’t go.
“The market is more geared up to worry about Cohn leaving than they are rejoicing by Bannon’s departure,” said Sam Stovall, chief market strategist at CFRA.
The Wall Street Journal reported that Bannon had argued against Trump’s comments Monday against white supremacists, which he made after criticism of his tepid response last weekend to the violence in Virginia. Trump reverted back to his original words on Tuesday, blaming both sides of the demonstrators for the violence. Bannon’s influence was also seen this week when Trump criticized the removal of Confederate war monuments.
“I suppose getting rid of Bannon might assuage some of the anger, but the problem is not Bannon. The problem is Trump,” said Greg Valliere, the chief global strategist at Horizon Investment.
“I don’t see how getting rid of Bannon is more than a 48-hour story,” Valliere said “Then we’ll be off to the races with whatever Trump says in Arizona. Bannon could also do some major damage and Trump knows that.”
Trump holds a rally in Arizona Tuesday, where some strategists say he could pardon Sheriff Joe Arpaio, who was being held in contempt for not listening to a judge’s order on detaining immigrants.
Bannon’s exit just shows more dysfunction inside the White House, Valliere said.
Bannon, the former executive chairman of the right-wing media company Breitbart, is expected to return to the website, which prides itself on taking aim at government and other institutions and where some fear he could do damage to the administration. The headline of Breitbart’s story Friday about Bannon’s exit blared: “Get Ready for Bannon the Barbarian.”
Stocks gave up their gains after 1 p.m. ET, as early enthusiasm waned. But it was also shortly after Breitbart senior editor Joel Pollack, tweeted #WAR, which some traders took to mean that Breitbart was gearing up to go after the White House and other aides, like Cohn and National Security Adviser H.R. McMaster, already the subject of many Breitbart articles.
Others took Bannon’s departure as a sign the two aides would stay and things would stabilize.”I think it’s actually good because it would likely keep two people the president needs to have around him — that being McMaster and Cohn,” Stovall said. “I think he needs a moat of mightier mindsets around him.”