Stocks surged Friday after a boost in durable goods ordersand despite news that home sales had their second-worst month on recordin August. Art Cashin, director of floor operations at UBS Financial Services, discussed his market outlook.
“What you saw coming in was yesterday’s Volcker-related selloff [that] left the markets slightly oversold,” Cashin told CNBC.
Stocks pulled back on Thursdayafter Paul Volcker, special adviser to President Obama, said that while the Fed's purchases of long-term Treasurys are "understandable," the U.S. central bank must be careful not to set the stage for future inflation.
In addition, Cashin said other factors helping the market included the weakening dollarand its boost to multinational companies, the downsizing of the GM deal, and Petrobras' plans to raise $70 billion in what would be the biggest initial public offering in the world.
“All of these things are making a wonderful cocktail for the market,” he said. “Things aren’t truly fixed, but once we start to see money pick up velocity and once we start to see some real hints of inflation, then the tune is going to change and we’ll see things begin to work maybe in the old-fashioned way,” he said.
Scorecard—What He Said:
- Cashin's Previous Appearance on CNBC (Sept. 23, 2010)
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- Bond Picker's Market Looms for Fixed-Income Investors
- 6 Investments for Nouriel Roubini's 'Less Gloomy' Outlook
- Forget Low Volume—Stocks Are Underbought: Manager
CNBC Data Pages:
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No immediate information was available for Cashin or his firm.