Summary Of Last Week’s Influences:
The major indices chalked up their fifth straight week of gains last week, with the Dow and the S&P reaching their highest levels since late September 2008. “Anything but cash,” as Societe Generale advised in an asset allocation note last week worked well for most markets during the first quarter of 2010. In fact, the S&P had its best quarter since 1998 - the last time Jupiter was in Pisces.
Pisces rules oil which gained 5.5% during the first quarter. Jupiter in Pisces describes an abundant supply of crude oil which in 1998 was trading below $20 a barrel (and gasoline was slightly over a $1 a gallon). But that was when the Fed funds rate spent most of the year over 5% as higher interest rates make it too expensive to speculate by stockpiling crude in Cushing or offshore. Fundamentals do not justify crude hovering close to $85 a barrel, but 0% interest rates for an “extended period” of time do.
The mantra of “anything but cash” should be stirring feelings of déjà vu as the Federal Reserve has engineered yet another asset price bubble as we go from one financial crisis to another under the Greenspan-Bernanke stewardship. The desperation for yield has driven up the prices of junk bonds, commodities, equities, and the return of covenant lite and PIK toggles* in debt financing.
Libra represents alliances, partnerships, and arrangements and the Full Moon represents a culmination point. The March 29 Libra Full Moon brought an end to the 40 year benchmark contract for iron ore when miners BHP Billiton and Vale reached agreement with Chinese and Japanese steelmakers to switch to quarterly contracts based on an average spot level rather than a negotiated annual contract.
The new system will create greater price volatility. Mars rules iron and steel, and Mars in speculative Leo helped push prices higher. More importantly will be what happens when Jupiter (June 6) and Uranus (May 27) temporarily enter Mars-ruled Aries and conjoin on June 8. Jupiter conjoining Uranus raises the potential for action at both ends of the extreme: the rapid rise up and the abrupt and unexpected crash landing. This goes beyond iron ore as Jupiter and Uranus will be opposed by Saturn and squared by Pluto in Capricorn over the summer, most actively during late July/early August.
While the Federal Reserve believes that inflation “is likely to be subdued for some time,” iron ore prices have increased between 80 to 100% in the past year and are set to climb higher. As a front page story in the Financial Times pointed out, 95% of iron ore consumption goes into making steel, and the steelmakers are raising prices up to a third. Consumers will pay higher prices for all types of goods, especially appliances and automobiles.
As described in last week’s Forecast, Friday’s employment report showed a gain of 162,000 jobs in March which was less than the 200,000+ Wall St. expected, but included a higher than anticipated amount of private sector jobs. February’s report was revised to reflect a gain of 62,000 jobs despite the severe snowstorms covering many parts of the country.
While Friday’s report was the best since May 2007, the unemployment rate remained unchanged at 9.7%. Saturn moving back into Virgo the sign representing the labor force (see below), could elevate the unemployment rate as people who gave up looking for work or are doing part time work seek full time employment motivated by improving economic conditions.
Summary Of This Week’s Influences:
Pluto and Saturn are the dominant planetary players this week. As mentioned in last week’s Forecast (see link above), Pluto’s intense and powerful energies (think nuclear) are pronounced April 1-10 as it turns retrograde on late Tuesday until September 14.
Pluto rules debt/deficits, bonds, mortgages/loans, opaque financial derivatives, insurance, taxes, trusts, wills, and bankruptcy. Pluto in Capricorn (2008-2024) is transforming the nature of all of these things as the structures (Capricorn) that support them (government and corporations) go through their own metamorphosis. First comes the initial crisis as all the problems related to these things are exposed, then comes the manipulation and corruption by those in power to keep the status quo in place, followed by more destruction and collapse in order for transformation to occur. When Pluto in earth element Capricorn is prominent, the ground can literally open up.
Pluto turning retrograde highlights all of these issues and the need to review where we are in the process. There is a greater opportunity for what’s been kept under the surface to get exposed and for existing issues to face more scrutiny. Pluto is turning retrograde opposite the USA’s natal Jupiter in Cancer reflecting that the biggest financial issues affecting the nation have yet to be addressed.
The Federal Reserve with its Sun in Capricorn opposite Pluto has been pushing to maintain its power, independence, and secrecy since Pluto in Capricorn began affecting it in 2008. On Tuesday the Fed will release the Minutes from its March 16 meeting. The Fed’s specialty has been to create bubbles and mop up afterward. This summer as the Fed is bombarded with the energies of Jupiter, Saturn, Uranus, and Pluto, Bernanke will have to show the world the Fed can tighten in time to prevent yet another collapse of its own making.
Capricorn is ruled by Saturn which has been retrograde since January 13 and is now shifting back into Virgo until July 21. Although Saturn squaring Pluto raised concerns about sovereign debt, agreement has yet to be reached over what to do about it. Saturn in Virgo for the final round up is all about accountability and the need to clean up the unfinished work of instituting new regulations, particularly in financial standards and healthcare reform.
The Moon (sentiment) in Capricorn Monday and Tuesday reinforces the energies of Pluto in Capricorn and Saturn in Virgo this week. Saturn’s energies are strong all week as even though the Moon moves into Aquarius Thursday and Friday, this sign was ruled by Saturn before Uranus was discovered. This is why Aquarius can represent the extremes of Saturn’s cautious conservatism and the progressive and innovative energies of Uranus. This push-pull between the two planetary energies will become stronger as Saturn in Virgo opposes Uranus in Pisces on April 26.
Monday, April 5, 2010
Positive bias; strongest in the morning but begins to weaken as day progresses and could turn negative.
Tuesday, April 6, 2010
Choppy/mixed to mostly positive.
Wednesday, April 7, 2010
Thursday, April 8, 2010
Seesaws between moderately negative to positive.
Friday, April 9, 2010
Positive bias weakens and could reverse in late afternoon.
*Covenant lite means there are less restrictions on the terms and requirements of the loan. A PIK (payment in kind) toggle allows a company to issue more debt in substitution for a loan payment in cash.