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The Federal Reserve on Wednesday enacted its second consecutive 0.75 percentage point interest rate increase as it seeks to tamp down runaway inflation without creating a recession. Powell said he does not think the economy is in recession, though growth was negative in the first quarter and was expected to be barely positive in the second quarter. “Think about what a recession is. It’s a broad-based decline across many industries that’s sustained more than a couple of months. This doesn’t seem like that now,” he said. “The real reason is the labor market has been such a strong signal of economic strength that it makes you question the GDP data.” – Jeff Cox, “Fed Hikes Interest Rates by 0.75 Percentage Point for Second Consecutive Time to Fight Inflation, www.cnbc.com, July 27, 2022. 

The U.S. economy shrank in the spring for the second consecutive quarter, meeting the criteria for a so-called technical recession. Gross domestic shrank by 0.9% on an annualized basis in the three-month period from April through June. Refinitiv economists expected the report to show the economy had expanded by 0.5%. – Megan Henney, “US Economy Enters Technical Recession After Growth Tumbles 0.9% in the Second Quarter,” www.foxbusiness.com, July 28, 2022.

Two skyscraper-size asteroids are zooming toward Earth this weekend, with one making its closest approach on Friday (July 29) and the second whizzing by on Saturday (July 30). –  Brandon Specktor, “Two skyscraper-size asteroids are barreling toward Earth this weekend,” www.livesceince.com, July 28, 2022.

 Interest rates rise sharply again, GDP falls into negative territory for the second consecutive quarter, two asteroids are barreling towards Earth this weekend, and the stock market loves it! It sounds like Jupiter rising. Actually, Jupiter is peaking. That is, the Big Guy (no, not President Biden, but the king of the gods) turned retrograde in Aries on Thursday, and this weekend (July 30), he will be trined by the Sun. Continue reading… MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING AUGUST 1, 2022 ©

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The ECB meets to decide on rates and bond market intervention. The ECB has guided very clearly that it intends to raise rates by 0.25ppt. A different increase would destroy such credibility as the ECB possesses, without bringing any inflation benefit. Raising by 0.50ppt today would not alter the inflation outlook. Faster tightening can be achieved over time, without sacrificing central bank credibility. – Paul Donovan, Economist, UBS Morning Audio Comment, www.ubs.com/pauldonovan, July 21, 2022. 

The European Central Bank on Thursday increased interest rates for the first time in 11 years…  The ECB surprised markets by pushing its benchmark rate up by 50 basis points, bringing its deposit rate to zero. Traders had expected a smaller hike of 25 basis points. – Sylvia Amaro, “European Central Bank Surprises Markets With Larger-Than-Expected Rate Hike,” www.cnbc.com, July 21, 2022. 

The bulls took the lead in the tug of war for control of the trend in world stock indices last week as major resistance was broken in many markets. This was accomplished even as the European Central Bank raised rates twice as much as they had been stating that they would, and the FED continues to suggest another large rate increase will be enacted next week. Suddenly investors are buying the prospect of higher rates, when very recently they were selling on the same outlook. Why? Continue reading… MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING JULY 25, 2022 ©

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Investors are trying to assess how officials will balance the need to tame inflation with concerns over a potential recession. U.S. consumer inflation accelerated to 9.1% in June, a pace not seen in more than four decades, boosting expectations among traders that the Federal Reserve will raise interest rates more aggressively to tame it. At the same time, tighter financial conditions could weigh on growth. – Caitlin Ostroff and Justin Baer, “Dow Rises Nearly 600 Points on Retail Spending Data,” https://www.wsj.com/, July 15, 2022. 

The tug of war for control of the trend in world stock indices continues. On Thursday, it looked like the heartbeat of the bulls was barely audible. But by Friday, it showed signs of life again. The lows of June 16-20 continue to hold in many regions, which supports the bullish case for a significant rally. Yet the chart pattern continues to exhibit lower highs and lower lows of any cycle other than a 2-4 week trading cycle in the U.S., and that has to change if the bulls are going to gain control. Continue reading… MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING JULY 18, 2022 ©

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Job growth accelerated at a much faster pace than expected in June. Nonfarm payrolls increased 372,000 in the month, better than the 250,000 Dow Jones estimate. The unemployment rate was 3.6%, unchanged from May and in line with estimates. June’s gains marked a slight deceleration from the downwardly revised 384,000 in May. April’s count was revised down to 368,000. “The strong 372,000 gain in non-farm payrolls in June appears to make a mockery of claims the economy is heading into, let alone already in, a recession,” said Andrew Hunter, senior U.S. economist at Capital Economics. – Jeff Cox, “Payroll Increased 372,000 in June, More Than Expected, as Jobs Market Defies Recession Fear,” www.cnbc.com, July 8, 2022. 

It really is a struggle between the bulls and bears with global stock markets right now. The chart pattern is still bearish in many indices like the DJIA and S&P with lower highs and lower lows of each trading cycle since the all-time high of January 5, except for the token new high in the DJIA on April 21 that was not matched in either the NASDAQ or the S&P. However, the NASDAQ took out its recent high (June 28) on Friday, July 8, while the other two U.S. indices did not (yet). This same case of intermarket divergence is unfolding in other regions, too, since the possible intermediate-term cycle low that occurred on June 17, when Venus squared Saturn, is still holding in most indices. Continue reading… MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING JULY 11, 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 27, 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 20, 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 13, 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 JUNE 6, 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 8^th 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 30, 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 23, 2022 ©