NOTE: Starting this week, the time period covered in the Weekly Forecast will be Monday to Monday.
Summary Of Last Week’s Influences:
The combination of the Virgo New Moon harmonizing with Pluto as Venus (banks) harmonized with Jupiter (in Venus-ruled Taurus) generated an abundance of optimism in the financial sector as the week began. The Sun represents confidence and Pluto rules mergers and insurance. The rally in financials began overseas on the announcement that a weaker Greek bank would acquire a less weaker bank to create AlphaEuro Bank. The news carried over in U.S. markets which were already jubilant over estimates that insurance payouts from Hurricane Irene would be lower than initially projected and provide insurers with a reason to increase premiums.
The energies of Jupiter in Taurus were particularly pronounced last week as Jupiter turned retrograde Tuesday. The major indices immediately reversed to positive when the FOMC Minutes were released at 2:00 PM Tuesday. The Jupiter energies accounted for the market’s optimism that the Fed will expand its balance sheet with QE3. But as I explained in “Is the Federal Reserve About to Overflow the Bathtub?,” the financial bathtub cannot hold anymore water without overflowing.
The reality is that the Fed is constrained at both ends of the inflation band. With too little inflation and the financial system at its limits in absorbing liquidity, additional liquidity would be a destructive force in the banking system. With too much inflation, additional liquidity would only spur additional inflation. While many people (myself included) would observe that we currently have too much inflation in necessities, overall inflation is still not enough to absorb more liquidity. Unfortunately for Chairman Bernanke, inflation is occurring in commodities rather than in more labor intensive products which would help to expand employment.
When optimism exits the market, Jupiter’s energy generates big moves in the opposite direction. Jupiter represents things at a distance, so events happening abroad had an outsized influence on Wall St. If there’s one thing that freaks Jupiter energy out it is a contraction in global growth. I have written periodically about China’s growth slowing down at a time of increasing social unrest. Although weaker at 50.6, August ISM manufacturing was virtually identical to China’s August PMI released the same day. A reading below 50 represents contraction; S. Korea reported 49.77 and Taiwan 45.2. So for all the analysts and investors in love with the Asian miracle, keep in mind that as the U.S. and Europe contracts, so will Asia. Plus China is in a housing bubble, and we’re all too well aware how that story ends.
The Sun in Virgo and Jupiter in Taurus had their harmonious hookup Friday but a worse than expected employment report described a larger than expected loss. With the Moon (sentiment) in Scorpio the sign ruling all forms of debt, market futures were already negative well before the jobs report over financial matters here and abroad. Greece’s finance minister announced the country won’t be able to meet 2011 deficit reduction targets. (Why this should be a surprise, I don’t know.)
Regulators requested that Bank of America (BAC) outline measures the bank could take if its financial condition worsened. Right before Friday’s close it was official that the FHFA filed a lawsuit (Jupiter) against 17 banks (including foreign ones) over mortgage securities they sold to Fannie (FNM) and Freddie (FRE) that soured.
While there is no getting around the fact that Friday’s jobs report was disappointing (especially with the downward revisions for June and July), media reports that no jobs were created is a bit misleading. A strike by Verizon (VZ) workers which has since been settled reduced the payroll number by 45,000. 17,000 private sector jobs were added in August while 17,000 government jobs were cut. Meanwhile the ADP Employment report which only counts private sector jobs, reported an increase of 91,000 jobs in August with 58,000 of those jobs created by small business.
The fractious debt debate closely followed by S&P’s downgrade of the U.S. credit rating as the USA experienced its Saturn return obviously did not create a confident atmosphere to in employers to hire. The unemployment rate during the USA’s previous Saturn return in October 1981 was 7.9% but rose to 10%+ between September 1982 and June 1983.
There are two solutions to the unemployment problem and the structural problems facing the nation that cannot be solved through monetary policy but only through fiscal policy:
1. Major infrastructure spending to create jobs AND bring the nation into the 21st century.
2. Radical tax reform that eliminates ALL deductions and credits across the board to lower tax rates while generating higher revenue. This would also help to reduce lobbying.
Summary Of This Week’s Influences:
As mentioned in the Virgo New Moon post, global issues are paramount with the September 4 First Quarter Moon in Jupiter-ruled Sagittarius. This is the “crisis in action” phase of the Moon’s monthly cycle which culminates at the September 12 Full Moon.
Mars in Cancer describes hot and dry conditions that create drought (since Cancer rules water). It was so blantantly obvious that I missed the forest for the trees in responding to a comment left following this post. Mars in Cancer in the sector ruling real estate in the chart for the Virgo New Moon would elevate the potential for fires that destroy homes and properties. These conditions could be alleviated between now and the September 12 Full Moon as Neptune in the sector representing the weather in the chart for Texas could bring rain either Thursday or over the weekend. If it does rain, it is likely to quickly bring flooding. Once again there is severe storm and earthquake potential for the East coast, especially the Northeast and New England.
The Sun represents self-identity and most people’s identity is tied to their work. The Sun is in Virgo, the sign ruling the labor force during the first Monday every September when the U.S. celebrates Labor Day. U.S. financial markets are closed on what is considered to be the final weekend of the summer. (Summer officially ends September 23 when the Sun enters Libra.)
It’s back to business on Tuesday with the Moon in Capricorn until 4:35 PM EDT Wednesday. Capricorn rules government and corporations. Which is why despite protestations to the contrary, neither can survive without the other. Market sentiment tends to steer more toward conservative investments (such as the “flight to safety” in U.S. Treasuries) unless there’s speculation or news about government policy that the market views as favorable to increase risk tolerance. Tuesday is unlikely to be one of those days, as it has a negative influence regardless of what is happening here or in Europe. (Although there have been situations in the past where a sharp downturn has ended the day mixed.)
The Moon in Aquarius Thursday and Friday can bring unexpected market moves. Mercury opposes Neptune for the third and final time Thursday due to Mercury’s retrograde cycle last month. This influence previously occurred on July 29 and August 8. Neptune rules oil which also sold off on those dates. It can be difficult to discern what’s really going on in an atmosphere clouded in confusion, rumors, and false or misleading information. Extra effort is required to avoid being misunderstood by others. There is potential for a major sovereign (non-U.S.) or corporate credit downgrade.
With Mercury in Leo opposite Neptune in Aquarius, the market now is particularly influenced by what leaders have to say. Mercury is a dualistic energy, reflecting that two leaders are scheduled to speak Thursday: Fed Chairman Bernanke at 1:00 PM and President Obama at 7:00 PM.
Mercury rules the labor force. Together with the Sun conjoining Venus in Virgo, President Obama will address a joint session of Congress to outline his plans to boost job growth. Originally the President was going to speak Wednesday evening at 8:00 PM, but was advised by House Speaker John Boehner to reschedule. (Hopefully future scheduling negotiations between the White House and Congress will return to taking place behind the scenes.)
President Obama might speak of a nation wounded and in need of healing through increasing employment growth. The President’s big bold plans will largely rely on infrastructure spending which will require an overhaul of the tax code to generate increased revenue to help pay for it. Numerous changes would be required in order to get the bill to pass Congress.
Mercury re-enters Virgo early Friday until September 25 after Mercury was originally in Virgo July 28 to August 8. Mercury is “at home” in Virgo, ready to give the calculator a workout to see if the numbers add up.
G7 finance ministers and central bankers meet in France Friday and Saturday to discuss plans to avert a financial crisis in Europe. The Moon entering Neptune-ruled Pisces at 3:26 PM EDT Saturday over the weekend leading up to the September 12 Pisces Full Moon (5:27 AM EDT) indicates that Monday’s market moves could either be euphoric or the financial contagion has spread. While Mercury in Virgo harmonizing with Pluto in Capricorn can indicate an announcement by the G7 to take additional steps to provide loan assistance, even if well received would likely only have a temporary effect. This influence can also bring merger announcements.
The Full Moon indicates events and situations have reached a culmination point. Occurring at 19+ degrees Pisces the sign of endings, this Full Moon conjoins the degree of the September 15, 2008 Full Moon when Wall St. erupted into a full blown financial crisis after Lehman Brothers filed for bankruptcy. Pluto issues such as debt, bankruptcy, taxes, and is emphasized now as Pluto prepares to turn direct September 16.
The Full Moon squares the USA’s natal Mars in Gemini and opposes the USA Neptune in Virgo. Besides financial crises, the Full Moon impacting the USA Mars/Neptune highlights U.S. military action that tends to relate to oil or drugs in some capacity. There's a lot of behind the scenes activity taking place that is now being reported.
Uranus in Aries which has been retrograde since July 9, squares the USA’s natal Venus in Cancer for the second time. This influence can bring unexpected developments or surprises affecting the USA’s financial system and home values. Note that Venus does not just represent financial values but also nonmaterial values. (In this context referring to the nation’s values.)
Although Uranus in Aries will make its third and final exact square to the USA’s natal Venus February 28, 2012, the influence will not begin to wane until after the end of 2012. But since the USA’s natal Venus conjoins Jupiter (which conjoins the USA’s natal Sun in Cancer), events will occur between now and 2015 that radically change and transform the nation’s financial system, values, ideology, and identity.
The first exact transit occurred on May 9, days after the major indices reached multiyear highs. S&P downgraded Greece to B-, home values in the first quarter of 2011 experienced their biggest decline since the end of 2008, and House Speaker John Boehner addressed the Economic Club of NY. The Speaker’s remark that cuts to the federal deficit should be greater than the amount Congress approves to raise the debt ceiling unsettled some in the business community then. Now as this transit repeats, Speaker Boehner is scheduled to outline the GOP’s plans for job creation at the Economic Club (September 15 at 1:00 PM EDT).
It’s worth repeating my premise that the closer we get to the September 23 Autumnal Equinox and the five planet Libra lineup surrounding the September 27 New Moon, the greater the potential for worldwide events to unravel that once again create fear of counterparty risk.
Even though Mercury in Virgo is moving forward, it might seem like déjà vu all over again as the evidence builds up that the world is undergoing a global contraction. This would indicate the stock market is overpriced.
Tuesday, September 6, 2011
Negative, but likely to improve later in the day.
Wednesday, September 7, 2011
Positive and strongest early before becoming choppy/mixed to negative; improves to close moderately negative to mixed.
Thursday, September 8, 2011
Friday, September 9, 2011
Choppy/mixed to positive; ends mixed.
Monday, September 12, 2011
Large moves in either direction; negative.
Related Post: 2011 Summer Solstice