WallStreetWeather.net Forecast For Week Of December 6, 2009
Summary Of Last Week’s Influences:
In last week’s Forecast I wrote that “expect the unexpected” would be the mantra as Uranus appeared to be motionless in the sky.
Friday’s employment report demonstrated that the shocks, surprises, and unexpected events that Uranus brings can go either way and to either extreme. November nonfarm payrolls decreased by 11,000 and the official unemployment rate decreased to 10% compared to Wall St’s expectation of around 125,000 jobs and 10.2% unemployment. This was the lowest number of job losses since the recession officially began in December 2007. It’s good to be wrong when the news is positive!
What gives credence that this could be more than a onetime freaky Uranus event or what Wall St terms a “rogue” month (another description of the erratic energy of Uranus), is September and October’s reports were revised to reflect a much lower decrease in the number of jobs lost. The number of hours worked rose very slightly. The number of temporary workers, a sign that usually leads to permanent positions, has been increasing since July.
President Obama was correct to be “cautiously optimistic” about Friday’s good news as one month’s report could very well get overshadowed by a couple of worse reports before sustained improvement begins. And underneath the headline number is the sobering statistic that the number of people out of work for more than six months has reached record levels. In “Main St. Over Wall St. by Q3 2010” I wrote that “employment should begin to show signs of growth by the second half of 2010.”
Initially Wall St. was happy with the jobs report, pushing the indices to new 2009 highs shortly after the open Friday. But then the Street realized that a better than expected job report is a sign that the Fed will have to take measures to pull in what CNBC’s Bob Pisani calls the “ocean of liquidity,” (Uranus in Pisces the ruler of oceans and bubbles) fueling the risk trade. The Dow dropped almost 205 points from its intraday high, joining the NASDAQ and S&P in negative territory for a good portion of the day.
The dollar reversed, dropping below $1.50 against the euro, and the yield on the 10 year note went from 3.203% Monday to close at 3.483% Friday. After reaching a nominal high of $1,227.50 Thursday, gold closed down almost $50 on Friday. The major indices still closed the week with a slight gain, but true to form Uranus brought several market reversals during the week.
The health of the consumer was a concern last week as Black Friday sales and November same store sales were not as strong as anticipated. With the Moon in Taurus last Monday, banks got off to a strong start for the week. Bank of America (BAC) was the star of the show after it announced Wednesday the Treasury agreed to allow the bank to repay the $45 billion in TARP, fulfilling Ken Lewis’ wish to retire after the TARP had been repaid.
There was the surprise announcement of GM CEO Fritz Henderson’s abrupt departure from the company and Fed Chairman Bernanke’s Senate confirmation hearing. Unlike the first time when he was confirmed by voice vote, Bernanke faces a rough road ahead and might end up being called “acting Fed Chairman” for a time while the Senate delays the vote.
President Obama announced his Afghanistan strategy Tuesday evening, surprising and annoying members of both parties with an increase of 30,000 troops operating under a timetable that could start bringing the first troops home beginning in July 2011, the time of the USA’s next Mars return.*
An article in today’s New York Times describes Veteran’s Day as the “turning point” during the President’s three month Afghanistan review that led to the “escalate-then-exit strategy.” Mars in Leo was conjoining President Obama’s Sun, boosting his confidence to act on formulating a military strategy that would meet his objectives. Neptune represents our beliefs. On November 29, as the Sun in Scorpio conjoined his Neptune, President Obama prefaced his decision to his national security team with the statement: “I’m not asking you to change what you believe, but if you do not agree with me, say so now.” Stationary Uranus was also opposing Obama’s Mars in Virgo which you can read about in my post on Afghanistan.
The motto of Uranus and Aquarius is “I know” which is the meaning of the Latin origin of the word science. Mercury squaring Uranus Monday brought news that CERN’s Large Hadron Collider became the world’s highest energy particle accelerator as it smashed the world record for accelerating subatomic particles in preparation for attempting in 2010 to recreate conditions that existed when the universe was “born.”
Summary Of This Week’s Influences:
Friday’s market behavior served as a mild warning that the rally in stocks, commodities, and bonds has been fueled by zero interest rates and excess liquidity. The very thought of any economic improvement that could cause this ocean of liquidity to be contracted has the market concerned.
Bloomberg reports that investors are “waiting for BOB” (Bolt Out of the Blue) event to occur such as Dubai World (considered a “mini BOB”) that would also cause dollar shorts to cover. The Dubai government’s announcement earlier this week that it is not obligated to support Dubai World is an example of why financial markets should not assume governments will always provide unlimited and indefinite support.
Mercury entered Capricorn December 5 until February 10. Capricorn is ruled by Saturn, injecting a cautious and serious tone into thoughts and communications. Mercury in Capricorn is concerned about fundamentals, not fluff. Mercury will be spending a long time in Saturn-ruled Capricorn due to being retrograde December 26 to January 15, 2010. (More about this in an upcoming post.)
On Monday Mercury will conjoin Pluto in Capricorn and square Saturn in Libra which could bring news about government debt, the government’s relations with financial institutions, and financial regulatory reform measures. Financials and insurance companies are highlighted.
The Sun in Sagittarius harmonizes with Mars in Leo Thursday, heating up asset price bubbles and overinflated expectations that markets can still party on.
President Obama will give a speech on the economy Tuesday where he is expected to outline his ideas for creating jobs. I think the quickest job creator would be to put a one year provision in the tax code that would allow companies to fully expense capital improvements.
Monday, December 7, 2009
Swings between negative to choppy/mixed to moderately up.
Tuesday, December 8, 2009
Wednesday, December 9, 2009
Positive trend bias; strongest in afternoon.
Thursday, December 10, 2009
Positive trend bias, but concerns grow that asset prices have become overinflated.
Friday, December 11, 2009
Mixed to moderately up early before turning lower.
*When Mars in Gemini returns to the exact degree it was when the USA was born. See my Afghanistan post for more information.
Posted 12/06/2009 09:33:00 PM