We sat down with Art Cashin, managing director of UBS Financial Services who’s patrolled the floor of the New York Stock Exchange for more than 50 years, at Bobby Van’s Steakhouse to chat about what’s ahead in 2020.
Here are three predictions the veteran Wall Street trader offered for 2020:
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.”
So how did Cashin do with his 2019 predictions?
Prediction one: No Fed rate hikes in 2019 — Correct.
Prediction two: A final China deal on trade and tariffs was unlikely but something that approximates it may happen — Right again.
Prediction three: Stocks will be flat in 2019 after being down in the first half of the year — Whoops. The S&P is up 28% this year, it’s best year since 2013. Still, two out of three isn’t bad.