The U.S. market might be down nearly 4 percent Thursday, but Art Cashin thinks stocks may not have hit bottom yet.
"We may wind up retesting the bottom," said the director of floor operations for UBS Financial Services.
"You never bet on the end of the world. That only happens once and the odds of something happening once an eternity are pretty long," he said. "But I think you want to be careful. I think we’re seeing selling across broad asset classes here."
China's announcement that its factory sector contracted for the third straight monthin September on flagging overseas demand is the "third leg of the trouble stool," with Europe and the U.S. affecting the stock market this morning, said Cashin. China's news had a major effect on companies that do a lot of business there, including Freeport-McMoran and other mining companies.
"So it’s the U.S. economy, lack of leadership on two continents, and now China’s been added to it," he said. "It hit so severely that not only the miners and others, but the Australian dollar at one point went to parity with the greenback."
Cashin thinks a small part of Wednesday's massive selloff was reaction to the U.S. Federal Reserve'smove to rebalance its bond portfolio, with the rest on "rumors out of Europe that things might change in Italy."
On the Fed's plan to sell $400 billion of its shorter-term securities to buy longer-term holdings, "what you’ve got to watch is the reimbursement of the mortgage-backed money," Cashin added. "They’re gonna try and push to get this real estate market going and I wouldn’t be surprised to see a major mortgage refinancing program from the way that the Fed set itself up."
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Disclosure information was not available for Art Cashin or his company.