US market unlikely to gain from IEA news: CoreStates Cap

Excerpts from Your World at 10 on CNBC-TV18 Watch the full show » ALSO READ See how Asian markets are doing

The International Energy Agency (IEA) has announced that it will release emergency oil stockpiles (around 60 million barrels of crude oil) in a bid to solve the crude crisis. However, William T Spiropoulos, President and CEO of CoreStates Capital, in an interview with CNBC-TV18, said that IEA's announcement is unlikely to benefit the US market.

Below is a verbatim transcript of his interview with CNBC-TV18's Menaka Doshi. Also watch the accompanying video.

Q: We have got all round weakness on the US markets and this surprising announcement by the IEA?

A: The markets have been in a downtrend since the end of April. At the end of April, we had seen good run, markets were up 100% in the US since their March 2009 low. We started to see no significant signs of strength anywhere and a lot of that goes back to the problems in Japan, the quake and enormous amount of damage was done there.

The whole world learned just in time to deliver even when there was no supply and I think that is problem the root cause of this pause that we are seeing. The news today doesn't give any kind of positive feeling as it creates uncertainty and again without any significant pockets of strength investors are running for the sidelines.

However, I think this is a time for smart shoppers and people with strong hands to set their wish list. The energy complex will strengthen as the Q3 and Q4 comes to show stronger US earnings and maybe some of the headwinds in the commodity and energy complex will give us a pause so we will see the drive for the next leg up has to be earnings.

Q: You saw the downgrade on US GDP growth expectation last night and you also heard Chairman Bernanke make very little mention of any possibility of QE3 or any further easing. He seems to say nothing about that. How do you think that's going to impact stocks over the next few months?

A: I am more concerned about the next three-four weeks because before you start to see pre-announcements for the second quarter, the markets right now appear to be testing their 200 day moving average so from a technical standpoint that should be accomplished in the next several days. If we start to get into early July with some favourable news, then could put in a significant bottom here. As far as QE3, I think that all of the politicians in Washington DC will be tired and fed up if there is any such serious move in that direction. I give that very little possibility this time.

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