Fed hikes rates 75 basis points amid recession talk; stocks rally

(27 July 2022) What is a recession?  Up to now, economists have defined it as two straight quarters of negative growth.  But if the Biden White House has its way, that could be changing.  Tomorrow's GDP report is expected to deliver a negative Q2 print which would fulfill the definition of a recession since Q1 was also negative.  But this week White House officials such as Treasury Secretary Janet Yellen and even Fed Chair Jerome Powell have suggested that the US is not in a recession and the definition should be more flexible to account for a relatively healthy job market. To be sure, unemployment remains under 4% although numbers are beginning to creep higher.

Stocks surged higher today as the Fed hinted it could pause rate hikes if inflation shows signs of moderating.  The rally was not hugely unexpected given tomorrow's Jupiter retrograde station.  Jupiter, the most bullish planet, stations twice a year wherein its direction appears to reverse from our perspective on the Earth.  The five-day periods around these stations can often coincide with positive market outcomes since Jupiter's unusually low velocity increases its positive influence.  As expected, we saw some early week selling on the Mercury-Mars square but once that alignment had moved past exact late on Tuesday, sentiment became more positive as Jupiter's energy could shine through unimpeded. 

I would note that tomorrow's New Moon aligns fairly closely with that stationary retrograde Jupiter and therefore could well coincide with more optimism.   The Moon exactly conjoins the Sun around 2 pm EDT in New York, while Jupiter will turn retrograde around 4.30 pm, shortly after the close of trading tomorrow.    But just to muddy the waters, there is a bearish contraparallel due tomorrow also, as Mars (15N00) aligns with Saturn (-15S00) and introduces the possibility of a reversal lower, later in the day or perhaps on Friday.

However, my attention is more focused on the triple conjunction of Mars, Uranus and Rahu (North Lunar Node) set for Monday, August 1.  On paper, this is a nasty-looking set up involving two malefics (Mars and Rahu) that suggests high-energy and unpredictable events which could bring some significant troubles.  While this alignment looks bad, a quick check of the historical record shows that previous similar triple conjunctions in January 1992 and April 2007 did not coincide with any major market moves.  And the late April 2007 alignment was actually bullish for the market.  Therefore, we should be careful not to jump to any conclusions. 

And yet there is still some downside risk associated with this triple conjunction since the transit of Mars in particular could activate the ongoing Saturn-Neptune-Uranus-Chiron alignment.  As I have previously noted, this four-planet alignment is one reason why markets have been declining in recent months.  The difficulty stems from the fact that the Saturn-Uranus midpoint (12 Pisces) is conjunct the Neptune-Chiron midpoint (12 Pisces). This conjunction of midpoints sets up a bearish resonance since Saturn is the decisive negative influence amid the other three neutral planets.

Another way of understanding this alignment is that the angular separation of Saturn (29 Capricorn) and Neptune (1 Pisces) is 32 degrees, which is the same distance between Uranus (24 Aries) and Chiron (22 Pisces).  Since all four of these planets move very slowly, they usually require faster-moving trigger planets to activate the other four planets either by conjunction or by other alignments with 32 degrees of separation.  This is what happened last Friday July 22, as the market fell by more than 1% when Mercury and Venus were separated by the same 31-32 degrees.   With Mars due to conjoin Uranus (and Rahu) next week and thereby setting up a potential 32 degree trigger of the larger Saturn alignment, there is good reason to be cautious.  Let's see what happens.

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.

Markets push higher ahead of ECB and Fed meetings

 (20 July 2022) Financial markets are still in rebound mode this week as investors await the outcome of tomorrow's ECB decision and next week's FOMC meeting on July 27.  Since the low of 3636 on the S&P 500 on June 17, stocks have been attempting to recoup some of their losses as investors consider the possibility that inflation has peaked.  Certainly, falling commodity prices are one reason to think that inflation may be cooling off, and if that is the case, then the ECB may only hike a minimum 25 basis points and the Fed may be satisfied with just another 75 point hike. 

Regardless of the rate decisions, it remains to be seen if this is the end of the correction or just a bear market rally that will ultimately fail and lead to lower lows.  On the whole, the planetary influences do not look overly positive for the coming months and suggest that lower lows are very possible.   But could this current rebound last a while longer?

We can look for clues in the horoscope of the NYSE (May 17, 1792).  As I have noted previously, the decline since April has been closely correlated with the 30-degree alignment of Saturn and Neptune.  The influence of this alignment was exceptionally strong since 1) Saturn stationed retrograde in early June and 2) it also formed a larger midpoint-based alignment with Uranus and Chiron.  Since the angular separation of Saturn and Neptune as well as Uranus and Chiron is approximately 30 degrees, their negative impact has lasted for an unusually long time.  As a rule, any alignment involving Saturn is a negative influence on sentiment and its effects can be magnified if slower moving planets are involved as is the case here. 

We can see an additional source of a pessimism since Saturn (29 Capricorn) forms a close 60 degree aspect with the natal Moon (28 Pisces).  This Saturn-Moon aspect will be exact on August 8 although it is already within effective range and may only require a faster-moving planet to act as catalyst.

And yet even though the bearish Saturn alignment remains within range both by transit and natally, we still are in the midst of a sizable rebound.  Why?  One reason is that bullish Jupiter has become stronger in July ahead of its retrograde station on July 28.  Markets tend to do well when Jupiter is strong, either when it is aspecting other planets and/or if its velocity is low.  Planetary velocity is much lower during the period around the direct and retrograde stations and thus we should not be surprised to see some upside here as Jupiter slows down before turning retrograde. 

The other factor I would note here is that Jupiter (14 Pisces) forms a kind of hidden alignment with Uranus (24 Aries).  While Jupiter does not form a conventional Vedic aspect with Uranus, it is conjunct in the navamsa, 9th divisional chart.  This is the same thing as forming a 40 degree aspect in the rasi natal chart (360/9 = 40).   The 40-degree aspect is also a divisor of the circle and thus should be taken seriously as a possible angle of resonance between planets.  It is also broadly bullish that Jupiter forms similar navamsa-type alignments with Uranus (24 Cancer) and Chiron (24 Gemini) in the NYSE chart.

It is therefore possible that markets can avoid another decline at least until the Jupiter retrograde station on July 28 -- just one day after the FOMC meeting.  In this scenario, the positive Jupiter influence could largely offset the underlying negative influence of the Saturn-Neptune-Uranus-Chiron alignment. Once Jupiter begins to move backwards, however, it could shift the balance of planetary energies and give bears the edge once again.

More immediately, I do wonder about the rest of this week.  Tomorrow's Moon-Mars conjunction doesn't seem very positive although the Mercury-Venus alignment seems more bullish.  By itself,  the Mercury-Venus alignment could coincide with some upside since both planets are benefic by nature, and that could well be the case later this week. 

However, I would note that Mercury and Venus will be separated by 30 degrees on Thursday and 31 degrees on Friday.  This is close enough that it could set up a negative resonance with the Saturn-Neptune alignment (= 32 degrees) which could bring further weakness.   Market direction is therefore somewhat uncertain, although the closeness of the alignments suggests a large move is more likely.  Some increased volatility is more likely early next week ahead of the Fed meeting as Mercury squares Mars.


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.

Euro falls to parity with US dollar as energy crunch cuts growth

(12 July 2022) It was an historic day on currency markets today as the Euro fell to parity with the US dollar for the first time since 2002.   After briefly trading at 0.998 to the dollar today, the Euro has fallen more than 20% since its pandemic high in January 2021.  The European economy has been struggling with the double whammy of post-pandemic inflation and severe energy shortages that have resulted from the Russia sanctions following the war in Ukraine.

The reference to 2002 is no coincidence, of course, since that was also a time of financial disruption and recession following the the bursting of the tech bubble.  US stock markets have lost about 20%  of their value this year following the pandemic bubble as the Fed attempts to bring inflation under control by raising short term interest rates.  However, the ECB's efforts to fight inflation have been hamstrung by the crippling effects of the energy shortage as higher rates are a non-starter in an economy quickly sliding towards recession.  As a result, the currency is taking a beating as the ECB lags further and further behind the Fed as capital flees in search of higher yields, most notably the US. 

The Euro woes are clearly seen in its horoscope.  Signed into existence on December 31, 1998, the Euro is getting hit hard by this ongoing Saturn-Neptune alignment.  Saturn (0 Aquarius) is the major culprit here, but its 30-degree alignment with Neptune (1 Pisces) only serves to magnify its effects.  And there is further magnification of the Saturn influence since it just stationed retrograde in early June within a one-degree alignment with the Euro Ascendant at 0 degrees of sidereal Taurus.  It is hard to imagine a more difficult protracted influence in a chart.  Due to their slow velocities, Saturn and Neptune have been sitting very close to 0 degrees of their respective signs since April.  This not only accounts for the decline in the Euro but also most risk assets such as stocks and an increasing number of commodities.

But with Saturn re-entering Capricorn on Thursday, there could be some temporary relief coming to the Euro.  This week may also be pivotal since Venus and the Sun align with the Ascendant and could act as additional triggers for the bearish Saturn-Neptune energy.  Wednesday's Venus-Saturn-Neptune alignment could see a significant move and Friday's Sun-Saturn alignment also looks potent. But as Saturn moves further into Capricorn, it should reduce its influence on the Ascendant in the Euro horoscope.  

As it happens, all eyes will be on tomorrow's US CPI report.  If the CPI comes above last month's 8.6%, then we could see the dollar rally further at the expense of the Euro.  That is certainly possible, since Venus makes its exact alignment with the Euro Ascendant tomorrow.  However, I am uncertain about how the market will react since Venus is often a bullish influence when it aspects major chart points such as the Ascendant, the Moon or the Sun.  Certainly, there is some downside risk if only because Venus may act more as a conduit for the negative Saturn influence.  Friday's Sun-Saturn-Neptune alignment looks somewhat more negative, however, both for the Euro and for stocks. 

Even if the Euro rebounds from here in the coming days, it is hard to be too optimistic going forward.  The nasty triple conjunction on August 1 of Mars, Uranus and Rahu aligns with the Moon (24 Taurus) and Mars (24 Virgo) in the Euro and is very likely to see more selling.  And if that isn't enough, Saturn will station direct at 24 Capricorn in October thus setting up another exact alignment with the natal Moon-Mars.  The bottom line here is that the Euro seems likely to fall further in the weeks and months ahead. 


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.

Photo Credit: shankar s.

Bond yields fall on recession fears

 (5 July 2022) It seems we've entered in a good news, bad news economic situation for the moment.  The good news is that bond yields have finally started to fall amid early signs that inflation may have peaked.  The bad news is that yields are also falling in anticipation of a possible recession as the latest data is coming in below expectations.  While the US job market remains robust, manufacturing output is down and consumer spending has also take a hit in response to sharply rising prices. 

In this respect, the bond market is a useful indicator on the overall state of the economy.   Surging inflation forced yields higher in the first half of 2022 and forced the Fed to quickly abandon its dovish policy and tighten its monetary policy.  But after peaking on June 14 at 3.49%, the 10-year Treasury yield has since moved below 3%, closing today's session at 2.82%. 

If yields continue their retreat, the odds of a recession will rise as investors begin to factor in slower growth and diminishing inflation risk.  The silver lining in that case would be that the pressure would come off the Fed to hike rates.  Even if another 75 point hike on July 27 is already baked into the market, significantly lower bond yields could help the Fed take a "pause" at its September meeting. 

Using financial astrology, we can make some speculative inferences about the future direction of interest rates and bond yields.  The horoscope of the first trade of US Treasuries (Aug 22, 1977) is especially helpful in this respect.  In terms of interpretation, the basic rule of thumb is that an afflicted chart would suggest lower prices for bonds and thus higher yields, since they have an inverse correlation.  A more favourable chart pattern would indicate increased demand for Treasuries and hence, lower yields. 

Currently, the chart is running the Venus-Saturn dasha period.  Venus is a benefic planet, of course, and its placement in the 11th house of gains is even more positive. This suggests that the Venus major dasha period (2007-2027) should be generally favourable for bond prices.  Indeed, bonds have generally done well since the 2008 meltdown aa yields have been kept artificially low by the Fed's QE policy.   At the start of the Venus period in Sep 2007, the 10-year Treasury yielded 4.5%.  Interest rates have been in a downtrend in the 15 years since, with the 2020 Covid low at just 0.5%. 

But the other part of the dasha equation is Saturn.  The Saturn minor dasha period (July 2020 - Sep 2023) looks less positive for bonds.  Saturn is a natural malefic and it is very badly placed in the 12th house, and just one degree away from the equal house cusp.  It's wide conjunction with the Sun across signs doesn't seem very helpful, nor does the aspect from Ketu in the 8th house.  Overall, the Saturn period should be bearish for bonds.   And indeed it has been very bearish since the 10-year yield stood at just 0.65% in July 2020 at the start of the Saturn minor period, and has now increased all the way to about 3%.  Bonds have been a terrible investment during the pandemic as the central bank money printing has increased inflation risk and pushed investors into equities and other risk assets. 

With the Venus-Saturn period due to end in Sep 2023, it seems likely that yields will remain fairly high for another year at least.  While interest rates could resume their upward climb over the next year, it is also possible that yields could stabilize here, albeit at much higher levels than in 2020.  In that sense, the bearish promise of the Saturn minor period would be fulfilled as long as 10-year yields are significantly higher than they were in 2020 (0.65%).   But that seems almost a given at this point. 

Just to round out the dasha analysis, we can also see how the preceding Venus-Jupiter period (2017-2020) was very bullish for bonds as yields fell sharply from 2.5% to 0.65% over that three year period.  Looking ahead, the Venus-Mercury period (2023-2026) should be more bullish for bonds than the current Venus-Saturn period since Mercury is a benefic and it is well-placed on the Ascendant.  However, the square aspect from Mars is close enough that it could introduce some significant volatility at various points in the Mercury minor period. 

We can look at the transits for a more short term perspective.  The recent dip in yields has coincided with some favourable influences from Jupiter and Venus.  Jupiter (13 Pisces) forms a very nice 120 degree aspect with the natal Moon (12 Scorpio). Since Jupiter is due to station retrograde in late July and will again set up that same aspect in late August, there is good reason to think that yields could fall further in the coming weeks. 

The transits of Venus usually are less significant due to its relatively high speed.  But as the major Dasha lord, its transits hold a greater potential importance.  We can also see that the transit of Venus through its own sign of Taurus coincided almost exactly with the fall in yields after June 14.  Since Venus usually does well in Taurus, it stands to reason that bonds would also rally during this transit.  Venus entered Taurus on June 17 -- just three days past the peak in yields -- and will leave this sign on July 13 and enter sidereal Gemini.  Therefore, there could be a bit more room on the downside for yields to fall while Venus is well-situated over the next week or so.  


Weekly Market Forecast

Stocks remain somewhat weak after the holiday break, although tech and growth stocks rallied on the decline in yields.  The rest of the week looks mixed as the Venus-Sun alignment with Uranus and Chiron should see some upside, however temporary.  While this is normally a very positive set up, it could end up triggering the ongoing bearish Saturn-Neptune alignment since their respective angular separation will be equal later in the week.  The Saturn-Neptune alignment is very slow-moving and bearish and is one reason why market sentiment has been so poor over the past two months.

Taking a closer look, we can see that Saturn and Neptune are 31 degrees apart this week, Uranus and Chiron are 31.5 degrees apart and Venus and Uranus will be 31 degrees apart on Friday.  Generally speaking, planetary separations that mirror a prominent Saturn alignment often indicate a bearish market outcome.   Perhaps that makes Friday the most vulnerable day for a decline this week.


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.