Is China losing the trade war?

(27 May 2019) Trump's sunny tweets notwithstanding, it may be that US-China trade war is just beginning.  Financial markets are unsettled after last week's escalation of rhetoric as China doubled down on its refusal to submit to US demands regarding intellectual property and technology transfer.   Once we pass this tit-for-tat tariffs stage, there are any number of options the Chinese could consider.  They could sell their US Treasury bonds thus forcing up US interest rates.  Or they could make it more difficult for US companies like Apple to manufacture in China.  Or they could even initiate an outright ban on US products entering the country.  Chinese media have already begun a soft campaign to embarrass owners of the iPhone.   

If a compromise deal is not reached soon, then China could begin these Phase 2-type actions against the US.  And let's not forget about the possibility that the trade war could morph into a more aggressive geopolitical confrontation.  Taiwan would be an obvious target in the event that the trade war escalated further. 

For now, I think China is losing the trade war.  Its stock market is down 25% since it began whereas the US market is only down 2%. since Trump launched the first tariffs in January 2018.  Recent Chinese economic data has generally been lower than expected suggesting slowing growth.  Moreover, the slower growth in recent months has occurred despite a $1 Trillion government stimulus undertaken in late 2018 and early 2019.  The Yuan has seen a significant decline in value, partially by design as the government is looking for any way to boost trade, even if it means depreciating its currency. 

A look at the national horoscope of China shows the problem.  In the first months of 2019, Pluto, Saturn and Ketu (South Lunar Node) were in an approximate conjunction with Jupiter (29 Sagittarius).  Saturn is the key planet in this respect.  Whereas Jupiter is the planet associated with optimism, expansion and growth, Saturn is its polar opposite.  A Saturn conjunction with Jupiter suggests constraint and pessimism.  Another negative influence of growth in early 2019 was Saturn's square 90-degree aspect with Mercury in Virgo, as well as the Sun, Neptune and Ketu.   The Ketu transit influence upon Jupiter hints at how sudden and surprising this slowdown has been.  Pluto's role in this triple conjunction indicates the role of power and coercion (i.e. Trump) in the slowdown in the Chinese economy.

The trade war is causing many middle class Chinese to worry about their future.  This has caused an increase in capital flight as money goes offshore in search of safer assets (e.g. Western real estate).   The chart suggests the trade war and the economy is likely to worsen in the months ahead as retrograde Saturn moves back into a very close square aspect with Mercury (20 Virgo) in the late summer.   Mercury is the planetary significator of trade and commerce so its affliction by Saturn in the August-September period is a very dark omen indeed.  Saturn will station direct at 19 Virgo at that time and therefore subject Mercury to an unusually long negative influence. 

An additional problem is that Ketu will exactly aspect natal Saturn (20 Leo) since the Saturn-Ketu conjunction will remain in force from now until September.  This is a very damaging configuration.  The Ketu influence on natal Saturn could reflect the destabilization or transformation of major institutions in China. 

I would expect China to at least enter a recession by this time, and it could be much worse than that.  Of course, official statistics in China are notoriously unreliable.  Some China observers insist that official GDP growth figures have been overestimated by at least 2 percent a year for the past decade.   The irony is that the possible collapse of the Chinese economy may well take the US economy down with it.   So if there is a recession in the US later in 2019 and 2020, who will have won the trade war then?  We will have to see how it all shakes out. 


Weekly Market Forecast

The stock market outlook this week still doesn't look very good, at least not in the US.  The early week Mercury-Venus alignment is somewhat positive but it may not last long.  Monday was generally positive in global markets while US markets were closed for Memorial Day.   However, Mercury and Venus will move into an alignment with Saturn and Ketu later in the week that looks likely to correspond with some downside.  Thursday in the US in particular may have a greater risk of some selling as the Moon enters Ashwini nakshatra around midday while aligning with Mars and the Sun.

For a more detailed analysis of the markets, please check out my weekly subscriber newsletter which is published every Saturday afternoon (EST).   I outline the key technical and planetary influences for US and Indian stocks for the short and medium term, as well as currencies, gold and oil. 

Modi to return as PM: Indian exit polls

(20 May 2019) Exit polls suggest that India's PM Narendra Modi is likely to return to power.  While India's Lok Sabha election result will be formally announced on Thursday May 23, Sunday's closely-watched exit polls pointed towards an even bigger majority this time for Modi's NDA alliance.  Markets soared on the exit poll news as the BSE-Sensex gained almost 4% in Monday's session.

The national horoscope for India shows why Modi is likely to return as Prime Minister.  In my experience, sitting incumbent leaders are typically re-elected if the Sun is well-aspected in the national chart.  The Sun represents the government as a whole as well as the head of the executive branch.   The 10th house should also be strong at the time of the election or the announcement of results. 

Immediately, we can see why the planets favour Modi at this time: Jupiter (27 Scorpio) is closely aspecting the Sun (28 Cancer) within one degree of a benefic 120-degree trine aspect.   That is a very solid indication of a return to power for a sitting PM.  I would also note a helpful Sun-Mercury conjunction to the India Ascendant at 7 Taurus.  These transits highlight this particular week as significant for the country in a general sense and give added weight to the Jupiter-Sun alignment.

However, we should note that there are some intriguing alignments in play this week.  Specifically, Rahu (26 Gemini) is exactly trine natal Jupiter.  As a natural malefic, Rahu (the North Lunar Node or 'Dragon's Head')  is often associated with confusion, deception and disruption of the status quo.  In a national chart, Jupiter symbolizes law and legal matters, and secondarily as wealth and the economy.  This Rahu-Jupiter aspect could bring some unexpected developments into the political mix this week. 

In legal terms, it could indicate some significant disputes or conflict that come to the surface around this election result.  In that sense, Rahu's tendency to erase boundaries integrates poorly with Jupiter's legal side which seeks to uphold stability and order.  However, Rahu works better with Jupiter's economic side since it symbolizes acquisitiveness and materialism.  It is possible that this aspect could also reflect the rising India stock market as investors welcome the BJP's promise of greater reforms and less regulation. 

In addition, Mars (10 Gemini) is prominent on Thursday May 23 as it aligns with Jupiter through its 135-degree aspect.  (This is the degreewise Rasi expression of the D-8 Asthamsa chart where Mars is aspected by the transiting Rahu and hence also with the natal Jupiter in the India chart.)   A positive interpretation of this Mars transit to natal Jupiter would simply be that Thursday is the decision (action) day for the central legal institutions of the country as the result is formally announced.

However, a negative interpretation is also possible, especially given the placement of Rahu.  Since Mars is negatively associated with conflict, we have to be open to the possibility that the election result may generate significant opposition.  This is perhaps always the case to some extent as the losing party inevitably cries foul.  And yet the positioning of Mars and Rahu here suggests some unexpected developments are, at least, possible and worthy of consideration.

Ultimately, I don't know what the final result of the election will be.  Probably Modi and the BJP will return to lead a majority government.  But this week's position of Mars and Rahu in the national horoscope opens the door to some potential surprise or disappointment on Thursday.  Maybe the exit polls overestimated the NDA seat totals, or perhaps Congress will challenge the result.


Weekly Market Forecast

While Indian stocks soared Monday, most other global markets went sideways or lower.  The Dow in New York suffered a modest loss on Monday, after posting another losing week last week.  In last week's Monday update, I thought markets might have some further difficulty given the alignment of Mercury with the Saturn-Ketu conjunction.  That proved incorrect as stocks generally rebounded after Monday's big sell-off on the deepening US-China trade war. 

Collective sentiment seems to be caught between the bearish Saturn-Ketu conjunction and the bullish Jupiter-Pluto alignment. Given the low velocity of all the planets concerned, these are ongoing influences lasting several weeks at least.  I tend to think that the Saturn-Ketu alignment is more dominant (hence it has a greater width in the timeline chart below) so this could be a time for caution.  Some passing influences this week could also induce some selling, especially around midweek as Mercury aligns with Mars.  It is unclear how close Indian markets could follow these global transits given the separate logic of the election results, however.

For a more detailed analysis of the markets, please check out my weekly subscriber newsletter which is published every Saturday afternoon (EST).   I outline the key technical and planetary influences for US and Indian stocks for the short and medium term, as well as currencies, gold and oil. 

Trump surprises markets with new China tariff threat

(6 May 2019)  He who lives by the Trump, dies by the Trump.  Some market participants may have been contemplating some adapted biblical wisdom today as stocks fell sharply after the mercurial US President tweeted Sunday that tariffs on Chinese goods would be raised to 25% on Friday.   Despite months of reassurance by the White House that a US-China trade deal was just around the corner, Trump has suddenly decided to play hardball after accusing China of reneging on what had already been agreed upon.

While stocks partially recovered by Monday's close in New York, confidence has been shaken.  It is unclear where the trade deal stands now as the China delegation is due in Washington for another round of negotiations on Wednesday. 

One perspective on this question can be found in the combined horoscopes of Donald Trump and  Xi Jinping.  We can combine the charts by taking the midpoint in time and space and arriving at a relationship chart cast for 14 December 1949.  It should be noted that we don't have a birth time for Xi so his noon chart is used as an approximation.
 
Immediately, we can see the source of today's tensions.  The Mars-Jupiter opposition sets up exactly on the natal Sun (29 Scorpio) of this combined chart.  Jupiter is usually a positive and harmonious influence especially in matters involving wealth and money, while Mars symbolizes frustration, anger and conflict.  The role of Mars here essentially overrides the Jupiter influence and makes outcomes worse, at least temporarily.  Interestingly, the two men were born one day apart in different years on June 14 (Trump) and June 15 (Xi). 

The ongoing Saturn-Ketu conjunction at 25-26 Sagittarius is setting up in a close 120 degree alignment with the natal Saturn in this combined chart.  This is an indication of heavy burdens and stress that can expose fundamental differences.  This Saturn-Saturn-Ketu set up has been within range for weeks and will only lessen its effect very slowly.  The fact that Saturn is barely moving in the days following its retrograde station (Apr 30) makes this Saturn-Saturn alignment all the more onerous for the Trump-Xi relationship.  It's definitely not a good time for US-China relations.

Mars will likely remain an source of problems this week as it will square its natal position at 1 Virgo 55.  Tomorrow (Tuesday) could see another spike in tensions as the Moon transits over the Mars and will reinforce the Mars-90-Mars alignment.  But I would be surprised if this represented a deal-breaker.  Mars transits are usually bad, but they don't last long and probably won't' symbolize irrevocable differences.  Indeed, we could see hope building again towards the end of the week as Venus aligns with Jupiter and the natal Sun.

But just as Mars probably isn't strong enough to deny a deal, Venus is likely not strong enough to bring forth a final deal either.   The bigger question mark concerns the role of Jupiter as a possible source of an agreement.  Jupiter retrograde gradually moving away from its conjunction with the Sun, so I'm not sure the necessary planets are in place for a deal in the near term.  And later in May Mars will oppose Mercury (May 24) and then square the Moon (May 31 approx.)  This will likely reflect another rise in conflict between Trump and Xi.  It's possible it could reflect other relevant situations like North Korea, but the risk of more trade problems will remain high. 


Weekly Market Forecast

Markets reacted quickly to the latest Trump trade tweets as futures plunged on Sunday night and then global equities fell sharply on Monday.  US stocks were down to start the week but largely recovered by the close of trading.  This decline was in keeping with expectations as it occurred just as Mars opposed Jupiter.  Last week was quite mixed as the Mars-Saturn-Ketu alignment didn't really cause too much damage when all was said and done.  I thought we might have seen a few more cracks in the bull market rally although Wednesday's Fed statement on Wednesday was bearish as expected and we got some follow-through on the downside on Thursday.  Friday's recovery was a bit disappointing but not wholly unexpected given the proximity of the Mercury-Jupiter alignment. 

This week could see more volatility.  Tuesday has a bearish bias as Mars enters sidereal Gemini while Venus squares Saturn and Ketu.    The Moon will conjoin Mars in the afternoon (EDT) so that could further elevate risk. But market bulls may get some relief along the way with the aforementioned Venus-Jupiter aspect on Wednesday and Thursday.  Perhaps this will reflect some constructive trade meetings in Washington.  Friday's Sun-Saturn-Ketu alignment may be more problematic, however. 

For a more detailed analysis of the markets, please check out my weekly subscriber newsletter which is published every Saturday afternoon (EST).   I outline the key technical and planetary influences for US and Indian stocks for the short and medium term, as well as currencies, gold and oil.