U.S. mortgage applications jumped last weekas rock-bottom rates lifted demand for home refinancing loans to its highest level in 15 months, according to the Mortgage Bankers Association. Art Cashin, director of floor operations at UBS Financial Services, discussed his insights.
“[The] spike in the refis may mean that the Fed’s plan is catching on,” Cashin told CNBC.
“The belief here was that the Fed’s plan was to drive rates so low that people could start refinancing their houses again and that may stimulate the economy. It’s put a little bit of a bullish buzz.”
Meanwhile, Potash shares soared on Tuesday following news that the fertilizer producer’s board rejected an unsolicited takeover bid from BHP Billiton valued at approximately $39 billion.
“It was an aggressive bid and that hints that [BHP] sees Potash and some other stocks as undervalued,” said Cashin. “And [BHP] decided to use all-cash, which means they thought their own stock was so undervalued that they didn’t want to use it as currency in the transaction—those two aspects of the deal helped motivate a little buying yesterday.”
Cashin also said while investors might want to get into stocks, he sees "significant resistance" in the euro around the $1.35 area.
"So I’ll have to wait a few more days," he said.
Scorecard—What He Said:
- Cashin's Previous Appearance on CNBC (Aug. 16, 2010)
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Wednesday's Top Dow Laggards (as of this writing):
Exxon Mobil
Chevron
3M
American Express
Pfizer
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Disclosures:
No immediate information was available for Cashin or his firm.
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