The seasonal rally that many are expecting may be delayed as the market tries to find a bottom, closely followed trader Art Cashin told CNBC on Tuesday.
While November historically tends to be a strong month for stocks, Cashin said the market needs to stabilize after its recent sell-off.
“It had a terrible shock in October, and it hasn’t fully recovered,” the UBS director of floor operations at the New York Stock Exchange said on “Closing Bell.”
“Until you show some signs of bottoming, it’s going to be tough to get Santa Claus or anybody else to the rally.”
A so-called Santa Claus rally typically occurs the last week of December through the first two trading days of January.
Lingering trade war fears and concerns about rising interest rates and possible global economic slowdown have been weighing on investors.
October’s rout saw the Dow Jones Industrial Average end down 5.1 percent for the month, its biggest one-month fall since January 2016. The S&P 500 lost $1.91 trillion in October, according to S&P Dow Jones Indices analyst Howard Silverblatt. It was the worst month for the S&P 500 since September 2011.
On Tuesday, U.S. stocks ended lower in volatile trading, after suffering steep losses in Monday’s session.
Cashin would wait to see what happens in the market after Thanksgiving.
Quincy Krosby, chief market strategist at Prudential Financial, is also cautious right now, calling this a “nervous market.”
“Look for quality, good cash flow” when investing right now, she said on “Closing Bell.” “You want to wait and see what’s going to happen.”
— CNBC’s Fred Imbert contributed to this report.