May 13, 2022
REVIEW AND PREVIEW
The world of crypto has had another of its periodic convulsions. Does the bursting bubble (again) matter? Building a bubble transfers genuine wealth from bubble buyers to bubble sellers. Someone who sold Bitcoin at USD 70,000 locked in the wealth they received, and they now hold an asset (dollars) of economic value. The buyer, who thought they had something worth USD 70,000, now holds something that, if not worthless, is worth less. Normally economists worry about wealth loss. Sudden drops in wealth make people feel very bad. Loss aversion exaggerates the importance of the loss. This encourages higher savings and lower consumption. – Dr. Paul Donovan, “Does Bursting the Bitcoin Bubble Matter?” UBS Weekly Blog, www.ubs.com/cio, May 13, 2022.
Anyone can create a virtual currency, market it to investors and use the money as he pleases. While fiat currencies such as the dollar are backed by governments, crypto currencies are backed by the faith in their developers. What could go wrong? Investors found out this week.( Editor’s note – fiat currencies are also only backed by people’s faith in their government). –Wall Street Journal Opinion Page, “Warnings From the Crypto Crash,” May 13, 2022.
It may have been Friday the 13th but the equity markets weren’t spooked by the Dr. Jekyll/Mr. Hyde show that’s been playing recently. Or maybe this was an inverted case of being spooked because of Mercury retrograde. Many markets will appear upside down under the Trickster’s reign. In any case, the carnage of the past six weeks paused after Thursday’s new cycle low. Friday reversed all that and was a strong up day. But will it last or just be another one-day wonder as the market’s personality changes again?
For many indices, the sell-off that ended Thursday represented a new yearly low. For others, it was a challenge to the previous lows made between January 24 and March 9 of this year. It was a nervous week for investors and traders, every bit as wacky and wild as the Trickster turning retrograde in the wild and wacky sign of Gemini (its ruling sign) would suggest – and even more so following the even more disruptive nature of the Sun/Uranus conjunction the week before on May 5. That just happened to also be in the middle of the two-week eclipses (April 30 and May 15-16). In other words, this is an intense schizoid cosmic time band. Continue reading…
May 06, 2022
REVIEW AND PREVIEW
The U.S. economy saw solid job growth in April, suggesting the labor market is still strong despite headwinds from rising interest rates, soaring inflation, a worsening labor shortage and fears of a slowdown. Employers added 428,000 jobs in April, the Labor Department said in its monthly payroll report released Friday, beating the 391,000 jobs forecast by Refinitiv economists. It marked the 12th consecutive month that job gains topped 400,000. The unemployment rate, meanwhile, held steady at 3.6%, the lowest level since February 2020. – Megan Henney, “US Economy Sees Healthy Job Growth in April as Payrolls Jump by 428,000,” www.foxbusiness.com, May 6, 2022.
It was the return of the taper tantrum last week as the next act of this Dr. Jekyll and Mr. Hyde stock market drama got underway. Is it going to finally slay the bull? Or will the bear finally go into hibernation and let the stock market come back to life. Last week it seemed to vacillate between both possibilities as the plot thickens, or sickens, depending on who you are rooting for. Continue reading…
April 29, 2022
REVIEW AND PREVIEW
Gross domestic product unexpectedly declined at a 1.4% annualized pace in the first quarter, marking an abrupt reversal for an economy coming off its best performance since 1984, the Commerce Department reported Thursday. A plethora of factors conspired to weigh against growth during the first three months of 2022, which fell off a cliff following the 6.9% gain to close out last year. Rising Covid omicron infections to start the year hampered activity across the board, while inflation surging at a level not seen since the early 1980s and the Russian invasion of Ukraine also contributed to the economic stasis. – Jeff Cox, “U.S.” GDP Fell at a 1.4% Pace to Start the Year,” www.cnbc.com, April 28, 2022.
He (Harvard University professor Kenneth Rogoff) argued that if the Federal Reserve does not “hike a lot, there is going to be inflation and if they do, there is going to be a massive recession.” The economist made the comment shortly after it was revealed that gross domestic product (GDP), the broadest measure of goods and services produced across the economy, fell at a 1.4% annualized rate in the three-month period from January through March, noting that the number is “even below the worst” he thought it might have been.– Talia Kaplan, “U.S. Economy Shrinking at Start of 2022 is ‘Shocking:’ Harvard Economist” www.foxbusinesnews.com, April 28, 2022.
It’s not like readers of this column and prior webinars were unaware of the economic danger before Thursday’s “shocking” report on the negative GDP. Last week’s column had reiterated this outlook, stating, “Something is not right in the world of financial markets today. As the Fed continues to loudly again wave the flag of its commitment to fight inflation by raising rates aggressively (while at the same time reducing liquidity by ending its quantitative easing programs), thereby risking an economic downturn…”
In the upside down reality of today’s dangerous, fragile economic situation, the bad news was good news for the stock market. This “Dr. Jekyll, Mr. Hyde” market behavior is not a promising sign for the bulls. A characteristic of a bear market is to see sharp rallies that don’t last, followed by a plunge to lower lows. Continue reading…
April 22, 2022
REVIEW AND PREVIEW
The Dow Jones Industrial Average fell 980 points or 2.8%, while the S&P 500 and Nasdaq Composite dropped 2.7% and 2.5%, respectively. Federal Reserve Chairman Jerome Powell, on Thursday, said the policymakers would likely move faster than previously stated to tackle high inflation.– “Dow Falls 980 Points, S&P and NASDAQ Crater 2% on Rate Hike Fears,” www.foxbusiness.com, April 22, 2022.
Friday’s action followed a dramatic reversal Thursday after a speech by Federal Reserve Chairman Jerome Powell dented market sentiment. Powell said during an International Monetary Fund panel that taming inflation is “absolutely essential” and a 50 basis point hike is on the table for May. –Tanya Macheel and Yun Li, “Dow Plunges More Than 900 Points for its Worst Day Since 2020.” www.cnbc.com, April 22, 2022.
When it is not euphoria and irrational exuberance, transits involving Jupiter and Neptune may instead manifest as hysteria and panic. That is what happened on Friday as Venus is approaching its conjunction to Jupiter and Neptune next week, April 27-30, following the 14-year conjunction of Jupiter and Neptune in Pisces the previous week on April 12.
At first, it looked like the Venus-Jupiter-Neptune stellium of next week might manifest as a grand rally. The DJIA and other equity markets surged into Thursday morning, April 21, to their highest level since the Russian invasion in Ukraine on February 24. But then the selloff began, with the DJIA falling 700 points off that high on Thursday into the close, followed by a 981-point plunge on Friday, April 22.
The optimism of early Thursday quickly turned to panic as Fed Chairman Powell deemed the fight against inflation to be more important at the moment than the risk of an economic contraction. Maybe he believes the fight against inflation will actually spare the nation from recession, which is like saying that I will stop spending so much money in order to overcome the depression of my debts. Continue reading…
April 15, 2022
NOTE: There will be no weekly column this week. In its place, we are sending a section from Forecast 2022 on “JUPITER IN ARIES,” a geocosmic signature that will begin May 10, 2022 and is relevant to today’s events. This was written in October 2021 for Forecast 2022.
JUPITER IN ARIES: COMPETITION AND COMBAT
Whereas Pisces is moist, Aries is fiery. Jupiter in Pisces may correspond with rains and floods, but Jupiter in Aries is more apt to coincide with fires and droughts.
Jupiter will ingress (enter) Aries in two stages. Its first foray into the sign of assertion, aggression, competition, and combat will take place May 20-October 27, 2022, and then a second time December 21, 2022, through May 16, 2023. Aries is the pioneer, exhibiting principles of exploration, venturing into new areas that are just waiting to be discovered, like outer space, or some new business endeavor. With Jupiter, it can be very athletic and competitive, setting about to achieve new records in various aspects of human activity, like sports, debate, and political contests.
With Aries, it is a “win at any cost” mission. We are referring to a “warrior mentality,” Continue reading…
April 08, 2022
NOTE: There will be no weekly column next week. The U.S. stock market will be closed on Friday, April 15, Good Friday, a national holiday.
REVIEW AND PREVIEW
Larry Summers, who can credibly claim to have been right from the start (regarding inflation), writes that the Fed’s current policy “is likely to lead to stagflation with … unemployment and inflation both averaging over 5% over the next few years – and ultimately to a major recession.” William A. Galston, “How Will Inflation End?” Wall Street Journal, April 6, 2022.
Modern Monetary Theory (MMT) is an economic theory that suggests that the government could simply create more money without consequence as it’s the issuer of the currency. – Melanie Lockert, “What is Modern Monetary Theory?” www.busnessinsider.com, October 6, 2021.
It was fun while it lasted. But the party is over, and the punch bowl that had been filled and refilled by proponents of the now discredited Modern Monetary Theory has been emptied.
The passage of the triple conjunction between Venus, Mars, and Saturn, March 29-April 5, had a sobering effect on world stock markets last week. Reality (Saturn) began to sink in that inflation is not going to be subdued without aggressive monetary contraction (higher interest rates, reducing the Fed’s balance sheet). Continue reading…
April 01, 2022
REVIEW AND PREVIEW
Nonfarm payrolls expanded by 431,000 for the month, while the unemployment rate was 3.6%, the Bureau of Labor Statistics reported Friday. Economists had been looking for 490,000 on payrolls and 3.7% for the jobless level. To combat inflation, the Federal Reserve is planning a series of interest rate hikes that further would slow growth. Markets now are anticipating rate increases at each of the six remaining Fed meetings this year, likely starting with a half percentage-point move in May and continuing to total 2.5 percentage points before 2022 comes to a close. There was little in Friday’s report that would alter that outlook. – Jeff Cox, “Economy Added 431,000 Jobs in March Despite Worries Over Slowing Growth,” www.cnbc.com, April 1, 2022.
U.S. 5-year and 30-year Treasury yields on Monday briefly inverted for the first time since 2006, raising fears of a possible recession. This is the first time the shorter-dated 5-year Treasury yield has risen above that of the longer-dated 30-year U.S. government bond since 2006 — just a couple of years before the Global Financial Crisis. – Maggie Fitzgerald and Vicky McKeever, “5-Year and 30-Year Treasury Yields Invert for First Time Since 2007, Fueling Recession Fears,” www.cnbc.com, March 28, 2022.
It was a big news week for economic matters. The news sounded mostly grand in the short-term, but more worrisome longer-term. That may be fine for traders, but ought to raise warning flags for investors that the outlook for sustained economic growth is not so rosy.
Several world stock indices paused their impressive multi-week rallies last week as Venus and Mars entered the time band of their conjunctions to Saturn, March 29-April 5. But then, as I discussed in last week’s YouTube interview on Antonia Langsdorf’s monthly New Moon Outlook (see Announcements), the Russian/Ukraine conflict escalated. That, along with the inversion of the yield curve, does not bode well for either inflation or the economy. The probability of a brief recession by the end of this year just increased. Continue reading…
March 25, 2022
REVIEW AND PREVIEW
The rate for the most common kind of mortgage just surged again. The average rate on the 30-year fixed mortgage shot significantly higher Friday, rising to 4.95%, according to Mortgage News Daily. “That’s the second time this week, and it puts this week on par with the worst week from the 2013 taper tantrum — a record we didn’t see being legitimately challenged a few days ago,” said Matthew Graham, COO of Mortgage News Daily. – Diana Olick, “Mortgage Rate Soars Closer to 5% in its Second Huge Jump This Week,” www.cnbc.com/, March 25, 2022.
U.S. stocks rebounded for a second consecutive week as investors gained confidence that the economy can withstand the escalating war in Ukraine and the Federal Reserve’s plans to lift interest rates to control inflation. The S&P 500 climbed 1.8% for the week, extending its gains over the past two weeks to 8.1%, the strongest run since late 2020. – Ben Eisen and Anna Hirtenstein, “Stocks Cap Largest Two-Week Gain Since Late 2020,” www.wsj.com/, March 25, 2022.
Knowledge of the two Venus/Mars conjunctions between February 16-March 7 has proven to be a value worth its weight in Gold – or Silver, Dollars, or any currency. It was during this period that most world equity markets bottomed, either on February 24, the day that Russia invaded Ukraine, or on March 7, when a secondary low occurred. It was right at the end of this period on March 8, that Gold, Silver, and Crude Oil topped out as well. Continue reading…
March 18, 2022
REVIEW AND PREVIEW
The era of ultralow mortgage rates is over. The average rate for a 30-year fixed mortgage topped 4% for the first time since May 2019, Freddie Mac said Thursday. – Orla McCaffrey, “Mortgage Rates Rise Above 4% forth First Time Since May 2019,’ Wall Street Journal, March 18, 2022.
Federal Reserve officials voted Wednesday to lift interest rates and penciled in six more increases by year’s end, the most aggressive pace in more than 15 years in an escalating effort to slow inflation that is running at its highest levels in four decades. – Nick Timiraos, “Fed Lifts Rates and Signals Six More Increases,” Wall Street Journal, March 17, 2022.
Due to preparations for this evening’s Webinar on China’s stocks market, Gold, and Crude Oil, I will not be able to provide our normal review on last week’s financial markets.
However, our three-star CRD (geocosmic critical reversal date) of March 4-7 can now be confirmed as coinciding with the primary cycle trough or secondary low in many world stock indices, and possibly primary cycle crests in Crude Oil and precious metals. We will update those markets in tonight’s webinar and this weekend’s weekly reports. Continue reading…
March 11, 2022
REVIEW AND PREVIEW
Prices rose 0.8% in the month (of February), the fastest rate in four months. That’s 7.9% over the last 12 months and 8.4% over the last three months. That’s the bad news from Thursday’s consumer price index report and the White House can’t blame Vladimir Putin for this one, though it is trying. “It’s Joe Biden’s Inflation: He Blames Putin, But His Policies and the Federal Reserve Are at Fault,” Wall Street Journal Editorial, March 11, 2022.
In the week that witnessed Gold and Crude Oil testing their all-time highs, while stocks and Treasuries continued to be pressured by the relentless bombardment of Ukraine by Russian military forces, as well as further economic signs of rising inflation, our three-star geocosmic critical reversal period of March 4-7 +/- 3 trading days has coincided with at least a pause – if not a major reversal – in several financial markets. Continue reading…