UBS’s Art Cashin said the solid gains in the market at the start of the year could mean that more muted action in the next couple of months. “The upside surprised a lot of veteran traders,” he said Wednesday on CNBC’s ” Squawk on the Street .” “We have a mild seasonal pattern call where if you get a strong January like this one, it’s good for the rest of the year, but it usually means that strong January ate up a good deal of the strength of the first quarter. So in February in particular and then March to a lesser degree, things kind of stall out.” The S & P 500 gained 6.2% in January, notching its best start of the year since 2019. The Nasdaq Composite added 10.7% during the period for its best monthly performance since July. January has been a key barometer for the full year. .SPX 1Y mountain S & P 500 However, Cashin, director of floor operations for UBS Financial Services at the New York Stock Exchange, said he’s skeptical that the rally has legs. He cautioned that if the S & P 500 breaks below 4,100, there could be more downside. “I’m a little suspect here. The bulls have the momentum in the short run, but I would watch out. If they rollover and break below 4,100, I’d be very careful,” Cashin said. “The bulls are in charge. They impressed everybody with the overtrade in late January. But [in terms of ] seasonality, we should be due for a bit of a rest here.” Cashin said he’s closely watching comments from regional Federal Reserve presidents, who might be more hawkish and signal more tightening action ahead. “Some of the regional guys are frustrated that the market has not believed them,” Cashin said.
