MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING JUNE 27, 2022 ©

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The Dow Jones Industrial Average rallied more than 800 points on Friday, rebounding off the lows of the bear market last week and capping its first weekly advance since May. Those moves followed the worst weekly decline for the S&P 500 since 2020. –Sarah Min and Jesse Pound, “Dow Rallies 800 Points on Friday to Cap Big Comeback Week,” www.cnbc.com, June 24, 2022. 

The Supreme Court in a 5-4 decision on Friday overturned Roe v. Wade, the landmark ruling that established the constitutional right to abortion in the U.S. in 1973. The court’s controversial but expected ruling gives individual states the power to set their own abortion laws without concern of running afoul of Roe. Almost half the states are expected to outlaw or severely restrict abortion as a result of the Supreme Court’s decision. The laws will affect tens of millions of people around the country, who may have to cross state lines to seek reproductive health care. – Dale Mangan and Kevin Breuninger, “Supreme Court Overturns Roe V. Wade,” www.cnbc.com, June 24, 2022. 

The overturning of Roe versus Wade may not have a lot to do with financial markets (yet), but it does reflect the transits to the July 2, 1776 chart of the United States. Continue reading…

MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING JUNE 20, 2022 ©

NOTE: U.S. markets are closed Monday in observance of the Juneteenth holiday 

The Nasdaq Composite and S&P 500 led a mixed market Friday, while the Dow Jones Industrial Average pulled back as investors wrapped the worst stretch since the pandemic amid inflation and recession fears. In commodities, oil fell 9.2% to $109.56 per barrel for the week. – “U.S. Stocks Close Our Worst Week Since the Pandemic,” www.foxbusiness.com, June 17, 2022.

The Fed has a classic dilemma. Inflation is mainly driven by either prices it cannot control (commodity related) or prices no one pays (owners’ equivalent rent, which is signaling a rising price of home ownership when most US homeowners pay a lower price than two years’ ago). Many prices the Fed can influence are in disinflation or outright deflation (over 3% of the CPI basket has year-on-year deflation). The Fed’s dilemma is how much more deflation to create in prices it can control, to offset the inflation in prices it cannot control. Dr. Paul Donovan, economist, “How Much Deflation?” UBS Morning Audio Comment, www.ubs.com, June 13, 2022. 

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This is getting pretty ugly. You get the feeling that Jamie Dimon and Elon Musk might be right when they stated in the last couple of weeks (and quoted here), regarding financial markets, something like: “Houston. Houston! We have a problem.” Continue reading…

MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING JUNE 13, 2022 ©

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The consumer price index rose 8.6% in May from a year ago, the highest increase since December 1981. Inflation has been a political headache for the White House and President Joe Biden. How much the central bank will have to raise rates remains to be seen. Former Treasury Secretary Larry Summers recently released a white paper with a team of other economists that suggests the Fed will need to go further than many are anticipating. The paper asserts that the current inflation predicament is closer to the 1980s situation than it appears because of differences in the ways that CPI is computed then and now. – Jeff Cox, “Inflation Rose 8.6% in May, Highest Since 1981, www.cnbc.com, June 10, 2022.

Ah, yes! The current inflation situation is closer to what we saw going into the 1980’s. The economic and stock market path under President Joe Biden is following a very similar pattern to that of Jimmy Carter, the U.S. president who served under the last 45-year Saturn/Uranus waning square cycle. Continue reading…

MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING JUNE 6, 2022 ©

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The U.S. economy added 390,000 jobs in May, better than expected despite fears of an economic slowdown and with a roaring pace of inflation. At the same time, the unemployment rate held at 3.6%, just above the lowest level since December 1969. Average hourly earnings increased 0.3% from April. The year-over-year increase for wages of 5.2% was in line with expectations. – Jeff Cox, “Payrolls Rose 390,000 in May, Better Than Expected,” www.cnbc.com, June 3.

Tesla CEO Elon Musk says he has a “super bad feeling” about the economy and wants to cut about 10% of jobs. – Ken Martin, “Musk Says Tesla to Pause Hiring, Wants to Cut 10% of Staff: Report” www.foxbusiness.com, June 3, 2022.

JP Morgan CEO Jamie Dimon warned of a coming economic “hurricane” that requires preparation. “Right now, it’s kind of sunny. Things are doing fine. Everyone thinks the Fed can handle this. That hurricane is right out there down the road coming our way. We just don’t know if it’s a minor one or a superstorm.” What is likely giving Dimon pause for concern, aside from persistent inflation, is the Fed’s quantitative tightening program. That includes interest rate hikes and a reduction of its $9 trillion balance sheet. – Matthew Fox, “Brace Yourself: Jamie Dimon Warns of a Coming Economic Hurricane.” https://finance.yahoo.com, June 1, 2022. 

The end of Mercury retrograde, the Trickster, brought the Mars/Jupiter in Aries U.S. stock market rally to a grinding halt on Friday, June 3. This was also one day before Saturn, the Buzzkill, turned retrograde. Despite the recent rise in equity markets around the world since the recent low recorded on the midpoint of Mercury retrograde, May 20, several high profile corporate executives (i.e., Elon Musk, Jamie Dimon) are now warning of economic trouble ahead. The market took notice of the worries on Friday. Continue reading…

MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING MAY 30, 2022 ©

NOTE: U.S. markets are closed Monday for the Memorial Day Holiday. 

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Last week marked the Dow’s first eight-week losing streak since 1923, while the S&P 500 capped a seven-week losing streak, its worst since 2001. – Samantha Subin, “Stock Futures Rise After Dow falls for 8th Straight Week in Relentless Sell-off,” www.cnbc.com, May 22, 2022.

A report showing inflation slowing a bit helped give stocks a boost on Friday. The core personal consumption expenditures price index rose 4.9% in April, down from the 5.2% pace seen the previous month. This particular report is watched closely by the Federal Reserve when setting policy. ­­– Tanaya Macheel and Hannah Miao, “Stocks Rise on Slowing Inflation Report, Dow to Snap 8-Week Losing Streak,” www.cnbc.com, May 27, 2022. 

The midpoint of Mercury retrograde on Sunday, May 22, proved once again to be an important market timing signature. Continue reading…

MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING MAY 23, 2022 ©

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Rising recession fears pushed U.S. stocks briefly into a bear market on Friday with the S&P 500′s decline from its all-time high in January reaching 20% at one point. A dramatic late-day reversal pushed the benchmark slightly into the green for the day at the closing bell. – Sarah Min and Fred Imbert, “Stocks Close Flat in Wild Session Friday that Saw S&P 500 Briefly Fall Into a Bear Market,” www.cnbc.com, May 20, 2022.

It was another wild and wacky week as the Trickster (Mercury retrograde), continued his penchant for teasing the bulls and then quickly pivoted back to serenading the bears, messing with their psyches too, along the way. Continue reading…

MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING MAY 16, 2022 ©

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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…

MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING MAY 9, 2022 ©

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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…

MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING MAY 2, 2022 ©

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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…

MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING APRIL 25, 2022 ©

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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…