WallStreetWeather.net Forecast For Week Of June 8, 2009
Summary Of Last Week’s Influences:
Monday’s news of GM’s bankruptcy filing was old news to a market addicted to growth (Jupiter) and its reflationary (Neptune) prospects. Bears view the ever expanding supply of Treasuries to be sold and the Federal Reserve monetizing the flood as increasing inflation through higher Treasury yields and higher commodity prices. By Friday commodities were dropping and the dollar was strengthening on the belief that the Fed could tighten monetary policy as soon as September (which is when the Fed stated in March it would complete its purchases of up to $300 billion of longer-term Treasury securities).
Jupiter conjoining Neptune in Aquarius has taken investor sentiment from deflation to inflation, as I wrote in a post last June. Now that a new government sponsored bubble has formed, will the Federal Reserve have the guts to prick it in time by raising interest rates as the usually dovish San Francisco FRB president Janet Yellen suggested in a speech Friday?
Summary Of This Week’s Influences:
Venus, the planetary ruler of banking and material assets, has now moved into its “home” sign Taurus until July 5. Venus had been in Aries since February 2, due to the planet from Earth’s vantage point appearing to move retrograde from March 6 to April 17.
Venus turning retrograde in Aries on Friday, March 6 corresponded with the S&P’s intraday low of 666.79 that initially spooked Wall Street. Retrograde planets tend to reverse trends, and after the DJIA and the S&P’s 12+ year closing lows the following trading day, the stock market has proven since then that 666 was truly a revelation of a market revival. Contrary to the propaganda spread by certain cultures and religions, 666 and Fridays resonate to the energy of Venus.*
The cycle of Venus in enthusiastic and fast moving Aries reflects the rapid rise of global stock markets and commodities. Aries likes to get in on the action first before others climb aboard. And since Venus rules banks, the banking sector was one of the biggest beneficiaries of the gains. The DJIA has gained almost 35% since the March low, but the KBW Bank Index (BKX) has gained close to 90%. I wrote in last week’s Forecast that Taurus the bull likes nothing better than watching their money grow. This energy’s weakness is being too slow to respond to changing conditions, and must keep in mind that as a pragmatic earth sign,** a paper profit is not an actual profit.
While Venus is just getting comfortable in Taurus, Mercury will complete its extended stay in Taurus, moving into its “home” sign Gemini late Saturday until July 3. The planetary energy of communication and movement has been in Taurus most of the time** since April 9, due to being retrograde May 7-30.
Due to Mercury’s retrograde cycle, this week will mark the third time that Mercury in Taurus will interact with Uranus (previously on April 24 and May 21) and Neptune (April 25 and May 20) on Tuesday, followed by Jupiter (April 22 and May 20) on Wednesday. The May dates listed represent Mercury’s retrograde encounter with these planets that reversed April’s upbeat thoughts. News can be conflicting and confusing (because it might just be a rumor); Jupiter’s tendency is to overreact.
With Mercury, Venus, and Mars in Taurus this week, a great deal of the market’s news and action will be related to banks and bankers.
While all the largest banks received a passing grade when the government released the results of the stress test on May 7 (the day Mercury went retrograde), Monday is the deadline for banks that were told to raise additional capital to submit their plans outlining how they will do so. (Banks have until November 9 to raise the additional capital.)
When the market opens on Monday, Citigroup (C) and General Motors will be replaced in the DJIA by Cisco Systems (CSCO) and The Travelers Companies (TRV). It is appropriate that Travelers replaces Citi in the Dow, since Citigroup was formed by the merger of Citicorp and Travelers Group in 1998. Citi spun off Travelers in 2002, and on April 2, 2004 the merged St. Paul Insurance Companies and Travelers Property Casualty began trading under the symbol STA. On February 27, 2007 the company was renamed Travelers and began trading under the ticker symbol TRV after reaching an agreement to reacquire its red umbrella logo from Citigroup.
Transiting Saturn in Virgo opposing Citigroup CEO Vikram Pandit’s progressed*** Sun in Pisces along with Pluto in Capricorn conjoining his natal Venus and challenging natal Jupiter in Libra, reflect the FDIC putting pressure on Pandit to resign, according to a report in Friday’s Wall Street Journal.
The WSJ cites the origins of the animosity between Citi and the FDIC emanating from the FDIC’s original consent to the shotgun marriage between Citi and Wachovia until FDIC Chairman Sheila Bair substituted higher paying suitor Wells Fargo (WFC) to marry Wachovia. I wrote about how the planetary energies were temporarily altering Pandit’s usually calm public persona then; subsequent articles about Pandit in New York magazine and now the Journal article confirm his anger did go off the deep end at the time.
While there are things Pandit could have done quicker and differently, he inherited the mess at Citi. As Chairman of the FDIC, Sheila Bair was against raising FDIC deposit insurance. Had FDIC insurance on bank deposits been raised permanently and early in the crisis it would have prevented the bank runs at IndyMac, Washington Mutual, Wachovia, and National City that particularly caused tremendous damage to the financial system and to consumers and small businesses.
I wrote back in January that I thought Bank of America CEO Ken Lewis might be forced into retirement in April. Lewis was forced to give up his Chairmanship on April 29, and the pressure is still on Lewis and the bank’s Board for management changes. Friday former Federal Reserve Governor Susan Bies and three other new members were added to BofA's Board.
On Thursday at 10 AM Ken Lewis will appear before a House Oversight Committee hearing on “Bank of America & Merrill Lynch: How Did a Private Deal Turn Into a Federal Bailout?” . Committee members will press Lewis to explain discrepancies between his public statements about the deal and what he said at his deposition in February to New York AG Cuomo. Fed Chairman Bernanke will be conspicuously absent at the hearing, although the Committee has requested numerous documents from the Fed. I guess Bernanke’s too busy meeting with the Fed’s new lobbyist to attend. Now that’s what I call transparency!
The Treasury will auction a total of $127 billion in short and longer term securities this week, and the market will be closely watching the results of Wednesday’s $19 billion in 10 year notes and Thursday’s $11 billion in 30 year bonds to see if investors continue to be concerned about all the government debt and the Fed’s excess liquidity stoking inflation.
Monday, June 8, 2009
Indices open down and improve to choppy/mixed to mostly positive.
Tuesday, June 9, 2009
Swings from negative to choppy/mixed to positive.
Wednesday, June 10, 2009
Thursday, June 11, 2009
Friday, June 12, 2009
Negative trend bias; improving conditions in afternoon.
*All of these so-called negative energies such as 666, the number 13, and in particular, “Friday the 13th” are energies that relate to females and feminine energy.
**Mercury was briefly in Gemini April 30 to May 13.
*** A mathematical calculation that moves the planets forward in time as a method of prediction.
Posted 6/07/2009 03:12:00 PM