Art Cashin: "I've Never Seen Anything Like Today's Market Before"

Market veteran Art Cashin, the head of NYSE floor operations for UBS, made an interesting observation earlier today just minutes before the close, as US stocks headed for another record finish after shrugging off the worst mass shooting in US history.

Asked by CNBC’s Kelly Evans to explain how US stocks have continued to outperform while the 10-year Treasury yield has remained anchored below 2.5%, Cashin acknowledged that, during a career that's spanned more than six decades, he's never seen anything like today's market.

“I’ve been doing this for over 50 years and I’ve never seen anything like it so it is rather odd.”

And given global stocks’ strong performance this year, with markets weathering a series of political crises, natural disasters, terror attacks and other nominally destabilizing events (with a little help from central banks, of course) – Cashin says the outlook isn’t as dire as some would believe.

“Right now, Europe’s doing all right emerging markets are okay, and maybe they’re not going to take away the punchbowl that quickly - so we’ll see,” Cashin said.

In September, the Fed suggested that while it would likely raise interest rates more quickly than previously believed during the coming quarters, median forecasts for the Fed funds rate in 2019, as well as the longer-run median target, declined compared with a set of forecasts released in July.

Art Cashin breaks down Q4 outlook from CNBC.

 

Looking ahead to the fourth quarter, the most pressing questions that investors should be asking themselves is ‘is this the quarter where tapering – or the expectation of further tapering – finally triggers a market correction.

“What’s really going to be interesting to watch in this final quarter, is will there be an impact of quantitative tightening. As Peter Boockvar points out…it’s only going to be a token amount. But when we had the taper tantrum they hadn’t even done anything yet they’d just threatened to taper.”

When asked what it would take to spark a meaningful correction in stocks, Cashin said he expects investors will take notice once the 10-year yield climbs above 3%.

“I think we’ve got to get a bit higher. Probably up around 3% you start to get everybody’s attention and you’ll start to hear that in the conversation more and more.”

However, with GDP growth accelerating 3.1% in the second quarter, Cashin says he’s surprised yields haven't already reached that level.

“If anything, it should be much higher given the GDP number,” Cashin said.

Of course, with the Fed set to start allowing some of its $4.5 trillion balance sheet to roll off beginning in October, the invisible ceiling over yields might disappear sooner than some complacent traders realize.  
 

Comments

Manthong Shlomo Scheckelstein Mon, 10/02/2017 - 19:00 Permalink

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  It’s OK Art, just be nimble. That’s what playing hoops at the gym is for. Just duck and weave around Jamie, Lloyd, Janet and their team.

In reply to by Shlomo Scheckelstein

Clock Crasher abyssinian Mon, 10/02/2017 - 18:53 Permalink

All the money in the world wont touch sovereign debt with a ten foot poll.  That's for the toxic waste depositories known as central banks.  All the money in the world is side stepping negative nominal and real rates and flooding into US stocks.  They are attractive because they pay dividends, doesn't matter the companies borrow printed out of thin air money to cash your dividends out to you.  They are also attractive because they are backed by physical plant and equipment.  The share holders of assets in equities can never go to zero (maybe snap chat and such but no blue chips).  Stocks double from here.  So when we say manipulation and disagree we disagree about semantics.Paraphrasing Martin Armstrong.As a perma bear I didn't want to agree with the man but he makes a really good point.

In reply to by abyssinian

buzzsaw99 Mon, 10/02/2017 - 18:36 Permalink

When asked what it would take to spark a meaningful correction in stocks, Cashin said he expects investors will take notice once the 10-year yield climbs above 3%. imo he's not wrong about that.  3% is the sell a kidney and buy more number for me.

Bam_Man Mon, 10/02/2017 - 18:41 Permalink

Go marinate some ice cubes, Art.BTW, we both went to the same High School.And if he had gone to college (which he obviously didn't need to), he probably would have gone where I went.

Clock Crasher Mon, 10/02/2017 - 18:46 Permalink

We are officially in Hell.Here is the score.67 Trillion US Total Debt4 Trillion Fed Balance Sheet107 Trillion US Unfunded Debt242 Trillion US Banks DerivativesThat sums to 420 Trillion in Debt that wont stop compounding.I'll spot you 20 Trillion in liquid assets.So this market is either pricing in hyperinflation and goes higher from here or is going to shut down and re-open -90% for X-mas. Or maybe Silver is pricing in hyper-deflation and is getting ahead start on a $1 per ounce price point.You do the math.

Theos Mon, 10/02/2017 - 18:47 Permalink

What ya'll dont get is that the ppl who own stocks now-a-days dont panic sell, or sell period. When you goto work tomrrow, look around at who owns stocks and see if they really care about a 50% drop. You can line up all the curves you like, but your nonsense about all those 'retail dumb money idiots' who were short vol last week that just mopped the floor demonstrates your bias. Who gives a shit about a shooting?

jmack Theos Mon, 10/02/2017 - 20:20 Permalink

Not believing it CAN drop 50% is not the same as not caring if it does drop 50%.  but to your point,  they probably dont care ABOUT a 50% drop, because they dont believe it is possible without the FED stepping in and propping up prices again.  Which makes it inevitable.

In reply to by Theos

Zepper Mon, 10/02/2017 - 18:47 Permalink

Its all fucking controlled ... a small group of tribesmen see their end coming by noose if the markets crash and burn like they did in 2007. They understand how fucked up the last 30 years of their extremely bad policies(from allowing China into the WTO, to massive credit bubbles) have destroyed the middle class and the country as a whole and they are trying to repair it. How are they trying to repair it... BY FUCKING GIVING THE WEALTHY MORE FUCKING MONEY! What a bunch of fucking parasites. I really hope thier day of reckoning comes soon. Talk about a bunch of people that need to be rounded up and put in prison, families included.

Son of Captain Nemo Mon, 10/02/2017 - 18:54 Permalink

Art

You're a fucking pathological liar if you believe that the rest of U.S. believes what you are saying that this is the "weirdest day" in financial markets you have seen in your "storied" career!

AlZo Mon, 10/02/2017 - 18:59 Permalink

The central bankers are using fake money to buy real shares of the big companies on the stock markets. Why should they care what the price is ? For them, it's free ! And the more they buy stocks with free money, the more they demonstrate that they have things in control as they keep pumping the prices. These guys must be laughing their a** off that nobody is exposing their scam. Nobody demanding an audit of the central bankers. People who think the central bankers will sell the stocks later to close the positions they have against nothing are completely delusory. The central monetary controlers are evil, parasitic thieves and they are stealing the publicly traded companies of the western world.When they will own most of the stocks because all investors are out THEN, they will crash the system, planning to reboot, but this time as owners of most of the valuable, productive assets.  

pump and dump Mon, 10/02/2017 - 19:10 Permalink

Everyone blames it on the fed. But do not forget the dark pools have more money than the market by 4 times and they can make it do what-ever they want,when ever they want.

Giant Meteor Nomad Trader Mon, 10/02/2017 - 20:55 Permalink

"Dark pools, a type of alternative trading system, give investors the opportunity to place orders and make trades without publicly telegraphing their intentions until the sale has been executed. They are mostly used by institutional investors for block trades involving a large number of securities.The primary advantage of dark pool trading is that institutional investors making large trades don't have to show their hand during the process of finding buyers and sellers. This prevents heavy price devaluation which would otherwise occur. If it was public knowledge, for example, that an investment bank was trying to move 500,000 shares of a security, the security would almost certainly have decreased in value by the time the bank found buyers for all of their shares. This has become an increasingly likely risk, with electronic trading platforms helping prices respond much more quickly to market pressures. If the new data is reported only after the trade has been executed, however, the news will have a much smaller impact on the market"Thanks Investopedia!Whiteboard presentation, Senior Editor Paddy Hirschhttps://www.youtube.com/watch?v=hq9waP7goScPaddy Hirsch, I shit you not ..

In reply to by Nomad Trader

pauhana Mon, 10/02/2017 - 19:18 Permalink

Anyone remember the John Paul Satre play No Exit?  The play has a bunch of people sitting around a living room telling the other people what their lives are like.  They tell wonderful, grandiose tales of their conquests and riches but while they do, their real lives are played out on the walls behind them so the others in the room can see just how depraved and debauched they really were when they were alive.  This is HELL, folks.   

HRH Feant2 pauhana Mon, 10/02/2017 - 20:10 Permalink

I regret to say that I actually read some of that assholes books.

BTW it is Jean-Paul Sartre. I think I still own the translation of "Nausea" and have no idea if I still have "Being and Nothingness" around.

What a fucking poser. "Being and Nothingness" ended up incomplete. Good.

As for the play / movie it sounds like Sartre stole Plato's idea in the Allegory of the Cave about people sitting around watching shadows on the walls while being chained as slaves and thinking those shadows are real.

I think about this often. Why do we sit around watching a TV and think it is anything close to reality? Shadows, only. Thin shadows.

In reply to by pauhana

shizzledizzle Mon, 10/02/2017 - 19:22 Permalink

All of these clowns are slowly coming to the realization that the tin foil hat crowd is right. The FED is and has been strait up buying stocks and manipulating commodities. Most of them just quietly accept the fact and buy with both hands. The few are left scratching their heads because the FED "doesn't buy stocks". The cognitive dissonance is amazing considering many are bright guys... Just unable to deduct the only rationale remaining.