Does the Financial Media Affect the Stock Market?

A listener asks:

I was curious if you ever wrote topics focused around the media‘s influence on the capital markets.

Yes, I have written about the financial media in the past, and I think that now would is a good time to revisit this topic, given the comments that Bill Ackman made last week.

Back on March 18th, the stock market had fallen more than 30% in record time. That morning, with the Dow down 7% at the open, Ackman went on CNBC and said “Hell is coming.”

And later on in the segment, seemingly contradicting himself, he said:

That’s a very very bearish thought and I’ve been super bearish, but I got bullish, and the reason why I got bullish, and I’ve been aggressively buying stocks, including Hilton today, and I’ve been buying all the way down…

Which clip do you think was played over and over for the next 24 hours,”Hell is coming” or “I got bullish”?

I saw that interview in real time. I listened to him say he was buying stocks, but all I heard was we’re about to enter another depression.

Last week he was back on the air and said “I really blame CNBC. They took 15 seconds of my interview and ran around scaring people because it was good Television.”

I don’t blame CNBC for this and neither should Bill Ackman. Their job is to make good television. He’s been doing this for a long time, he knows how the game is played.

Back to the original question, does the financial media affect capital markets?

They’re a player on the field, no doubt, but I don’t know how much power they wield. Sure, stocks might move when certain pundits disclose a position, but, and I have zero evidence of this, I would guess those short-term pops don’t have long lasting affects.

The biggest influence the financial media has is at the micro level, not the macro. Here’s what I mean: It’s highly likely that certain viewers saw Bill Ackman on March 18th, heard the word depression, and sold all of their stocks. However, it’s highly unlikely that Ackman’s words moved the entire stock market.

If you’re interested in learning more about how CNBC came to be, I highly recommend The Fortune Tellers: Inside Wall Street’s Game of Money, Media and Manipulation, by Howard Kurtz. I’ll leave you with this quote:

When journalists cover politics, their outsider role is clearly defined. No single reporter can affect White House policies or a candidate’s campaign through mere analysis or commentary…In this realm, journalists are scorekeepers and second-guessers and naysayers, and their influence is ephemeral and diffuse. In the business arena, however, financial journalists are players. They make things happen instantaneously, and their impact is gauged not by subjective polls but by the starker standard of stock prices.


This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

The Compound Media, Inc., an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here:

Please see disclosures here.