Stocks fall as inflation hits 30-year high of 6.2%

  (10 November 2021) US stocks fell for a second straight day on Wednesday after the latest CPI data release showed a stunning 6.2% annual rise in inflation.  The rise in inflation to its highest level in 30 years prompted investors to dump both stocks and bonds in favor of safe havens such as the dollar and gold.  The soaring inflation rate belies the Federal Reserve's more benign view of inflation as merely transitory.  With inflation likely to stay elevated into 2022, more observers now believe the Fed will be forced to hike rates sooner than expected.  Of course, this would be bad news for stocks which have come to depend on the Fed's near-zero interest rate policy.

The sell-off comes as no surprise as I highlighted a particularly bearish alignment of Mercury, Mars and Saturn in last week's update.   As alignments go, it was a fairly high probability bearish pattern since it involved malefics Mars (upset, frustration) and Saturn (loss) and both were in close connection with Mercury (commerce).  Moreover, Saturn was casting a difficult, 90-degree square aspect to the Mercury-Mars conjunction.  The fast-moving Moon may have acted as a trigger as it conjoined Saturn today just in time for the larger 1% decline.

Another dimension of this decline is that the Mercury-Mars-Saturn pattern also closely aligns with the natal Venus (14 Aries) in the NYSE horoscope.  Since Venus is a benefic planet, alignments involving Mars and Saturn are more likely to manifest as declines around the date of the exact angle.  Saturn (13 Capricorn) is within just one degree of its tense square aspect to Venus while Mercury and Mars are also just one degree from being in opposition to Venus. 

 

The Mercury-Mars-Saturn alignment is now separating.  As a general rule, separating alignments are weaker than when they are applying.  This suggests that additional downside in the near term is far from certain.  That said, other factors should also be considered. 

First, we should note that Saturn will form an exact square with natal Venus (14 Aries) in two more weeks.  This is one factor that suggests that volatility could remain elevated.  However, the picture is complicated by the fact that bullish Jupiter is quickly approaching its exact 30-degree angle with Pluto.  The effect of this more positive alignment will likely offset some of the Saturn influence.  Taken together, the competing influence of Jupiter and Saturn could indicate a choppy market in the coming days.


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Photo Credit: Michael Jastremski