Don’t Expect QE3, Watch Europe: Larry McDonald

Stocks are pricing in monetary easing from the Federal Reserve, but it’s not going to happen, Newedge’s Larry McDonald said Thursday on CNBC.

“We’re looking at what’s happening next week in Europe and the systemic risk event that exists in Spain,” he said. “At the end of the day, the Federal Reserve wants to keep its powder dry. You’re not going to see out of Jackson Hole, and you’re not probably going to see something in September.”

More important in the near-term is ambiguity about the European bond-buying program, McDonald said on “Fast Money.”

“Until we get clarity on that, I think the market could drift a little lower,” he added.

Trader disclosure: On Aug. 30, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Stephanie Link is long COTT; Stephanie Link is long BMY; Stephanie Link is long GIS; Steve Grasso is long AET; Steve Grasso is long ASTM; Steve Grasso is long BA; Steve Grasso is long F; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long S; Steve Weiss is long JCP; Steve Weiss is long CLNY; Steve Weiss is long QCOM; Steve Weiss is long HK; Steve Weiss is long JNN; Steve Weiss is long AIG; Steve Weiss is long AMTG; Steve Weiss is long AMLP; Steve Weiss is long WLP; Steve Weiss is short X; Steve Weiss is short AKS; Steve Weiss is short TCK; Steve Weiss is short VALE; Joe Terranova is long VRTS; Joe Terranova is long NXPI; Joe Terranova is long EMC; Joe Terranova is long CHKP; Joe Terranova is long CSTR; Joe Terranova is long AAPL; Joe Terranova is long WFM; Joe Terranova is long SBUX.

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