Stocks tumble as Biden signals support for Fed rate hikes

(19 January 2022) Stocks fell again today after President Joe Biden voiced his support for the Fed's intention to raise interest rates in order to fight inflation.  The political cover from the White House will give the Fed a freer hand to hike rates, even if there is some economic fallout in highly-leveraged sectors such as real estate and tech stocks.  US stocks have fallen 6% so far in January as the specter of rising inflation has forced investors to price in multiple rate hikes in 2022. After an extended period with rates stuck at the zero-bound, investors are having to recalibrate their expectations as monetary policy gradually returns to normal for a post-Covid world.

Part of the reason for this January pullback is due to the simultaneous retrograde periods of Venus (Dec 19-Jan 29) and Mercury (Jan 14-Feb 4).  Since both of these planets are considered natural benefics, their backwards motion can negate their typically positive influence and make markets more vulnerable to declines. 

In addition, we note that there are currently four planets transiting the sign of sidereal Capricorn.  While Capricorn is not inherently bearish, it is ruled by Saturn, which is the most bearish planet in the solar system.  And of course, we should note that Saturn itself is currently transiting Capricorn, along with Pluto, the Sun and Mercury retrograde. 

The Sun and Mercury are more important in this respect since they are hemmed in between malefics Saturn and Pluto and thus form an inauspicious papa katari (scissors) yoga.  Mercury entered into a weakened hemmed in state on Dec 30 while the Sun became hemmed in on Jan 16.  As a modern planet, Pluto is not normally considered in traditional Vedic yogas, but here I would nonetheless suggest that its inherently malefic nature makes it more difficult for the Sun and Mercury exhibit a more positive influence.

Market sentiment could therefore remain vulnerable as long as the Sun and Mercury are stuck between Saturn (20 Capricorn) and Pluto (2 Capricorn).  The faster-moving Sun isn't due to pass the slower-moving Saturn until Feb 4 while retrograde Mercury will briefly pass back over Pluto on Jan 29 and remain outside of the Saturn-Pluto scissors until Feb 10. Interestingly, Venus is also due to end its retrograde cycle on Jan 29, so that day could prove significant.  Of course, with Mercury due to end its retrograde cycle on Feb 4, there are multiple reasons why stocks could rebound beginning in late January or early February. 

Next week's planets do not look particularly favourable.  Mars (6 Sagittarius), Mercury (7 Capricorn) and Rahu (5 Taurus) are all in fairly close alignment and thus could coincide with further downside.  While the three planets are never quite exact in their 30-degree multiples, they are nonetheless close enough to signal some difficulties.  The probability of declines is increased since Rahu will be in a close conjunction with the natal Sun (6 Taurus) in the NYSE horoscope.  It is also worth noting that this alignment is closest before the Wednesday FOMC meeting on Jan 26.

For more details, check out my weekly subscriber newsletter which is published every Saturday afternoon (EST).   In addition to reviewing the key planetary and technical influences on US and Indian stocks for the short and medium term, I also provide an astrological analysis of potential upcoming moves in currencies, gold and oil.