U.S. stocks will be in a holding pattern until the Fed meets this month, but equities and oil have bottomed out, says Peter Cardillo of First Standard Financial.
You must onstage you retreat this by the stimulus move by the European Central Bank. When this from the floor and NYC to explain market action Peter card bill O and chief market economist for standard and kill. While the petered out stuff started an up note so that dollar too after the ECB cut rates and boosted its stimulus program why the sudden change in sentiment. Well I think you know the initial reaction from the stock market was. Was to be EC ECB staff decision to do exactly what we expected them to do. In fact my the other ragged little bit more than we expected to do and of course I think what happened was. During the press conference he indicated. That they probably will not. Cut rates. Further and that I think here dampen market enthusiasm. Is certainly. Sent the Euro. Skyrocketing against the dollar and as a result. It weighed on stocks. Well here is do you think the market has just write that as you as you mentioned John you did have. Not put Paulson as much bigger than the street had expected in yet. Now there's sort of upset. What's going to write the thing. Well you know we have to also realize that he did say that he still has a lot of ammunition. So he's not but dealt dole has caused just have yet but I think the fact that. You know he had mentioned. That they wouldn't cut rates anymore off is what spooked the market but again it could it be in this interpretation. By investors today most likely and I kind of think another factor is oil prices are weighing on the market and that's what. Oil and I thought we've seen earlier some signs of a breakdown between in that correlation between oil prices and stocks but. I equity investors are on the still being held hostage by order. Well you know when the market. Wants to cut it wants to focus on oil but today it's a double combination. It's the ECB and oil prices and oil prices are down because. It seems to be. Word out that perhaps. If I ran doesn't. Begin to make them positive comments and joining via. The rest of the OPEC. Members for a meeting this month that. The meeting is not likely to be handled himself as a result of that. It was heating oil prices this pressure but let's not forget that oil prices that have done. Pretty. Nicely over the past week in fact that they've been very strong so. My guess is that. They chatter about. I ran is probably just an excuse. To take some profits off the table. You senior a weekly note that they used to the S&P 500 rise in the twenties on the 52100. In the intermediate term. What do you see stocks going over the short term wheel drive. Why they go to short term basically we're headed higher I think we go higher before we go law. I think you know the market might be on hold different the next week or so when do we get the F the most team meeting out of the way. But there again I don't expect. Defense to raise rates this time around. Most likely we're looking at a rate hike. High gas. Perhaps in the third quarter and a lot of part of the third quarter so I I kind of think that gives we're doing room for Stockton via. Do you sense in the week may have bottomed out in February it was another down leg to come. Oh no I think we've seen the lows for the year I think we've made a bottom and I think we've made a bottom and oil as well. But you know the market has done quite nicely and so. Without any. Real exciting news from time to time the market is going to be subject to profit taking. Okay will not take it checked again what with the Fed meeting coming up in March thanks again Peter. Thank you our thanks to fear card to look first standard financial I'm Fred Katayama and this is Reuters.