For the second year in a row, Art Cashin, the head of UBS’s floor operations at the NYSE, was spot-on with his market calls in 2019.
Last December, Cashin told CNBC that he expected the Federal Reserve wouldn’t raise interest rates during the coming year. In fact, Cashin said late last year that he felt there was now “an outside chance” that the Fed would cut rates in 2019. At the time, many scoffed at that call. But Cashin turned out to be correct.
He was also correct about whether the US and China would manage to strike a long-term trade deal. “I don’t believe so,” Cashin said. “I think we will get something that approximates it, and you’ll get perhaps in midyear a relaxation rally, but – with – with the problems of – political sequencing, whatever, I don’t think it works out.”
As for whether the US would succeed in striking a lasting trade deal with Beijing before the end of the year, Cashin insisted that the answer was ‘most likely no’.
“I don’t believe so. I think we will get something that approximates it, and you’ll get perhaps in midyear a relaxation rally, but – with – with the problems of – political sequencing, whatever, I don’t think it works out.”
So, Cashin sat down with CNBC’s Bob Pisani at Bobby Van’s Steakhouse, across from the NYSE, to discuss what Cashin sees coming down the pipe for markets in 2020.
Cashin offered three predictions – that’s fewer predictions than usual: His first prediction was that there will be no Fed hikes over the coming year. His second is that the market’s winning streak will continue, and that the big US stock indexes will finish the year higher.
Finally, although Cashin expects stocks to rise next year, their ascent will be punctuated by several periods of extreme volatility, particularly during the months of January, March and July.
Prediction one: Despite a still-strong U.S. economy, there will be no Fed rate hikes in the next year.
“I think the Fed is somewhat intimidated by the market…And the market, if anything, thinks the Fed is ahead of itself on higher rates.”
Prediction two: The market winning streak will continue and the broader indexes will be up in 2020.
“Eight out of nine times that we’ve had an up year like we had this year, it’s followed by another decent up year. Not quite as strong, but still strong, and so I’ll go with history.”
Prediction three: Stocks may be up, but there will be several periods of volatility, particularly in January, March and July.
“In late January, we’ll get to see if there’s going to be a Brexit now that [Prime Minister Boris] Johnson got a sweeping move in Parliament. And will he, in fact, push through a no-deal Brexit? That could make the markets very volatile and jumpy. The next thing will be the U.S. election. Number one, in early March, we will get Super Tuesday, and one-third of the U.S. populace will vote. And we’ll get to find out where [Democat Mike] Bloomberg’s strategy is. Who looks to be the leader? Has anybody locked it up? If not, then it could be a brokered convention, and that date would be in the middle of July, when the convention will be.”
Cashin’s recent record is definitely
Watch Bob Pisani’s interview with Cashin below: