Predictions & Forecasts

Deal or no-deal: US and China face Dec 15 tariff deadline

(2 December 2019) With the December 15 tariff deadline looming, financial markets are again contemplating if the US-China trade deal is half-full or half-empty.  A limited Phase 1 deal was supposedly in the bag in October, only to be undone by the usual cycle of fractured public negotiations on Twitter.  President Trump's support for the Hong Kong protestors angered China over the weekend and has made short term prospects worse.  So will Trump postpone these December 15 tariffs in order to keep the deal moving forward?

Both sides have cards to play.  Trump knows the trade war is probably hurting China more than it is hurting the US so China may be more willing to make a deal on terms favorable to the US.  However, China knows that Trump is in trouble politically with impeachment and with the election coming in November 2020.  Trump needs the stock market to be at or near record highs in order to have a decent chance of winning.  Failure to make a deal with China will cause stocks to fall so China may choose to wait Trump out until he caves.   Read more...


Stocks hit new highs: the bigger the bubble, the bigger the bust

(25 November 2019) As investors put a positive spin on the Fed's recent interventions, stocks have resumed their upward climb this week.  Global markets rallied again on Monday after some brief consolidation last week.  As it happened, the pullback coincided closely with the end of the Mercury retrograde cycle on Wednesday.  This was in keeping with expectations as I noted that Mercury's direct station would occur in close aspect with Rahu, the North Lunar Node.  According to the principles of financial astrology, Mercury-Rahu alignments tend to be bearish.  Monday's gain was also not surprising given the bullish Venus-Jupiter conjunction.

It seems the sky's the limit now as fundamentals like corporate earnings and macro economic data are no longer important.  What matters now is that the Fed is underwriting US bank lending by conducting $100 Billion or more in "overnight repos" and buying $60 Billion a month in Treasury Bills.   Read more...


Boris Johnson poised to win re-election in UK election

(18 November 2019) We are still three weeks away from the UK election on 12 December, but it seems that Conservative Party leader Boris Johnson is poised to win.  Recent polls show the Conservatives with a healthy 10-12 point lead over Jeremy Corbyn's Labour Party with both the LDP and Brexit Party trailing far behind.  It would seem that the election is Johnson's to lose at this point. 

The Pound and UK stock market have been rallying in recent days in anticipation of a Conservative victory.  A majority government would finally end the uncertainty over Brexit and secure Johnson's October deal with the EU.   Read more...


New high for US stocks as Jupiter enters Sagittarius

(4 November 2019) Stocks are looking good to start the month of November as the Dow made a new all-time high on Monday.  Trade optimism is in seemingly endless supply as investors are still receptive to all the jawboning coming out of the White House.  And with the Federal Reserve now quietly engaging in its 'not-QE' program of asset purchases, there are more reasons (like $60 Billion per month) to think that stocks could stay in rally mode a while longer.  Never mind that year-on-year US corporate earnings are negative for Q3 and ISM manufacturing data showed a contraction for the third straight month in October.   

After the Fed's widely-anticipated rate cut last Wednesday, the market declined on Thursday just as Mercury turned retrograde.  This was in keeping with expectations since the retrograde stations of Mercury tend to have a bearish bias.   Read more...


Mercury turns retrograde after Fed meeting this week

(28 Oct 2019)  Things are looking up for the stock market these days.  The S&P 500 hit a new all-time high today as corporate earnings satisfied buyers while the ever-elusive US-China trade deal appeared to move one step closer to reality.  While trading volumes have been low, some investors are expecting a major new leg higher as the Fed's loose monetary policy promises to keep interest rates as low as possible.  Low rates means that borrowing is cheaper and that can produce more growth in the near-term, whether or not this debt-based economy is sustainable in the long run.

The Federal Reserve meets this week on Wednesday and will issue its latest statement on the economy.  Most investors are expecting another rate cut of 25 points although the bigger question will be the forward guidance for 2020.    Read more...


Jupiter saves Justin: Canada's Trudeau wins re-election

(22 October 2019) Canadian Prime Minster Justin Trudeau has won a second, albeit smaller, mandate on Monday as voters largely forgave his scandals and personal mistakes.  With the minority win, Trudeau's Liberals will now have to share power with the left-leaning NDP in order to form a functioning government.  The limited victory likely came as relief to Trudeau whose hold on power seemed precarious as a series of scandals and a spotty governing record made defeat a real possibility. 

Trudeau's win was not surprising to students of astrology, however.  As I posted back in March during the SNC-Lavalin corruption scandal, I thought Trudeau's horoscope was strong enough that he would win re-election, although he could lose his majority.  That is exactly what has come to pass.    Read more...


Time is running out on Boris' Brexit

(14 October 2019) The tension is mounting as the UK is set to leave the European Union on Oct 31 with or without a deal.  Negotiations are intensifying in recent days as the EU is due to meet on Thursday and Friday to render a decision about any possible last-minute deals.  British Prime Minister Boris Johnson has refused to extend the deadline past Oct 31 and has asserted that he would leave without a deal if necessary.  Huge anti-Brexit protests are due this weekend as the country remains deeply divided on the whole Brexit question. 

In a previous post, I thought Boris Johnson would eventually be successful in his drive to take the UK out of the EU by Oct 31.  However, I didn't quite anticipate the level of difficulty he would have up to now as his various tactical strategies have failed.  His desire for a snap election was thwarted because of lack of support in the Commons and his proroguing of Parliament was also struck down by the Supreme Court.   Read more...



The astrology of recession: Saturn, Jupiter and Pluto in 2020

(7 October 2019) Stocks have trended lower over the past week as surprisingly weak US manufacturing data has renewed recession concerns.  While Friday's middling US jobs report offered some respite, US markets were down for the week.  European and Asian markets were also generally lower as bonds and gold rallied. 

This bearish outcome was not unexpected as I thought the midweek Mercury-Mars alignment would likely correlate with some downside.   The late week rebound in the US and Europe also fit nicely with the entry of bullish Venus into Libra on Thursday and Friday. 

As bond yields are again testing their recent lows, the market is still focused on a possible recession next year.  The 10-year US Treasury is again yielding near 1.5% and remains the only game in town for many international investors who are seeking both safety and a positive return on capital.  With most Japanese and European government bonds with negative rates, money is flooding into both US equity and debt markets.   Read more...


Stocks wobble as Dems launch impeachment inquiry

(30 September 2019) Stuff is getting real now in Washington, DC as Democratic Speaker Nancy Pelosi finally pulled the trigger on the impeachment inquiry of President Donald Trump.  The revelations in the Ukraine-Biden affair convinced Pelosi and the more moderate wing of the party to go ahead with the controversial impeachment inquiry.  Hearings are due to begin this week with the subpoena Trump's lawyer Rudy Giuliani. The eventual timing of the House votes on the Articles of Impeachment will depend on the length of the investigations but seem most likely to take place in November or December.  

In last Monday's post, I outlined a few time windows that could be decisive in this impeachment process: 1) late September;  2) late October;  3) early December and perhaps most importantly;  4) January-February.  In terms of the current transit picture, I didn't properly understand that the Mars (28 Leo) square aspect to Trump's volatile Moon-Ketu combination at 28 Scorpio could actually bring about the formal beginning of the inquiry.   It was clearly bad news for the president but it also more or less exactly coincided with impeachment launch.   Read more...


Democrats one step closer to impeaching Trump

(23 September 2019)  It never ends.   President Trump has come under renewed scrutiny over the weekend for apparently withholding military aid to Ukraine in exchange for damaging information on the family of potential Democratic nominee Joe Biden.  If there is clear evidence that Trump sought the help of a foreign power to gain advantage over a political rival, moderate Democrats in the House of Representatives would be more willing to vote to impeach. 

While calls for impeachment have been growing over the past year, House Leader Nancy Pelosi has resisted it due to the vulnerability of some moderates in the 2020 election.  The Ukrainian-Biden affair is shifting the odds towards impeachment, however, as this is a more blatant "high crime and misdemeanor".  The House can impeach with a simple majority of 218 out of 435 seats and the Democrats currently control 235 seats.   Read more...


Stocks fall after Saudi oil attack; oil rises 12%

(16 September 2019)  Stock markets ended Monday modestly negative after a sudden drone attack on Saudi oil facilities.  US stocks fell about 0.5% while bonds, gold and, of course, oil rallied on the news of the supply interruption.  While it is unclear who was responsible for the attack, the US is already pointing fingers at Iran or its Yemeni allies.  Retaliation from the US or Saudi Arabia has not yet occurred, but the situation is dangerously uncertain.  Moreover, the attack reveals a major vulnerability in Saudi oil production going forward.

The timing of the attack comes at an awkward time as stocks are within 1% of their all-time high and investors await the latest statement on interest rates from the Fed on Wednesday.  In other words, it may become harder to stocks to move to new highs given this unwelcome geopolitical development.  The Federal Reserve may also have to reconsider its default position of cutting rates in light of this possible inflationary spike in oil prices.   Read more...


Elizabeth Warren on the rise as Dems prepare for third debate

(9 September 2019) It's been a good summer for Democratic 2020 contender Elizabeth Warren.  The Democrats are due to meet in Houston on Thursday for their third debate as the field has narrowed to just (!) ten candidates.  Former VP and moderate Joe Biden still enjoys a 10-12 point lead in the polls at 29% but the progressive Warren has now moved up to second place to 18%, just ahead of Bernie Sanders at 17%.  Kamala Harris is well back at 7% along with Buttigieg (4%), Yang (3%) Booker (3%) and O'Rourke (2%).

Warren is increasingly seen as the most viable progressive option to Biden as Sanders has so far failed to grow his base of support.  While we don't know her time of birth, her chart cast for noon June 22, 1949 hints at why she has picked up momentum this summer.  The positioning of Saturn has been much better for her in the past two months.  In the spring, Saturn had stationed almost exactly opposite her Venus (25 Gemini).  This may have blocked the advancement of her candidacy as Venus symbolizes happiness, success and social contacts while Saturn translates into restrictions, limits and disappointments.   Read more...


UK PM Boris Johnson issues Brexit ultimatum

(2 September 2019)  The long Brexit melodrama seems to have entered its final act.   Prime Minister Boris Johnson has issued an ultimatum to rebel Tory members to either support him or face a snap election.  Faced with the precarious economic prospect of a no-deal Brexit, a group of Conservative Party members want to block Johnson's risky do-or-die approach to final negotiations with the EU.  If the EU rebuffs him and Johnson fails to secure a new deal, the UK will crash out of the EU on October 31 with nothing at all.  Most economists have predicted some fairly dire consequences for the UK if this worst-case scenario comes to pass.

The ongoing political uncertainty comes as no surprise to students of astrology.  As I wrote back in March, the planets looked very unhelpful for a quick or decisive resolution to the Brexit crisis under then-Prime Minister Theresa May.  Indeed, I suggested that things could intensify in September when Saturn was due to station exactly conjunct the Sun in the UK horoscope (1 January 1801; 00.00).   Read more...


Hong Kong protests complicate trade talks

(26 August 2019) The situation in Hong Kong remains tense.  Anti-government protests have been ongoing since June and have recently turned violent.  With no clear path out of the stalemate, the Hong Kong stock market has fallen 10% in August as investors seek safe havens.  Meanwhile, fears are growing that Beijing will lose patience with this affront to its authority and send in the army to crush the protest movement. 

The Hong Kong protests are something of wild card in the continuing US-China trade war.  The Chinese government is probably doubly reticent to use the army since it would complicate the trade negotiations with the US.  In all likelihood, it would scuttle the talks for good, as well as lead to a range of sanctions from most Western countries.  Of course, some analysts have concluded that the talks are already dead until after the US elections next year, no matter how much hopeful jawboning we hear from Trump and Xi.   Read more...


Stocks rebound as central banks plan new stimulus

(19 Aug 2019) Stock markets appeared to stabilize Monday after last week's fixation on recession and the imminent bond yield inversion in the US.   As the global economy slows, central banks are preparing an array of stimulus plans to generate more growth and entice more spending out of an increasingly indebted consumer.  Most government bonds in Japan and Europe now have negative yields and the ECB is considering another round of quantitative easing.   Reports also suggest this time they may even buy stocks directly as a way of luring money out of individual savings accounts and into "risky assets".   But as we have seen, the current fashion of inflating asset prices only makes rich people richer and increases social inequality.  A modern-day Marie Antoinette might say, "let them eat stocks."

Last week saw an increase in volatility despite the bullish Sun-Venus conjunction.  I thought we might have seen more upside although I had been somewhat uncertain given the possible negative influence of Thursday morning's Full Moon.  As it happened, the low in S&P overnight Futures on Thursday morning occurred within an hour of the Full Moon, after which stocks began to climb.   Read more...


Gold tops $1500: how much higher could it go?

(12 August 2019) Financial markets are on high alert for the second straight week.  Stocks fell across the board on Monday on mounting recession fears amid ongoing trade and currency uncertainty.  Investors sought out traditional safe havens such as the Japanese Yen, bonds and gold as stocks were widely sold.  The situation has deteriorated to such an extent that most European sovereign bonds now have a negative yield while 10-year US Treasury is fast-approaching its all-time low yield of 1.34%.

Gold has benefited from the worsening economic conditions as it traded Monday at a six-year high of $1531. Gold has rallied significantly over the past two months as it broke above important technical resistance at $1375 in mid-June.  With China devaluing the Yuan to mitigate the effects of Trump's tariffs, other emerging market currencies are also caught in the trade crossfire.  For now, the relative stability of gold has made it an attractive port in this financial storm.  Read more...


Stocks plunge as US-China trade war escalates

(5 August 2019) "Trade wars are easy to win."   As the US-China trade dispute escalated to new heights over the weekend, US President Donald Trump may well end up regretting his ill-chosen words.  Against the advice of his own advisors, Trump increased tariffs on $300 million worth of Chinese goods last Thursday.  The move shocked markets as stocks around the world sold off sharply.  China retaliated on Sunday by stopping the purchase of US agricultural products and, more importantly, by letting the value of the Yuan fall to the crucial 7.00 level for the first time since the 2008 meltdown.  The devalued Yuan makes China's exports cheaper and thereby is a strategy to avoid the full force of the US tariffs. 

Financial markets sold off sharply again on Monday as the trade war showed signs of getting out of control.  If a trade war is bad, a currency war is much worse, as it increases financial uncertainty and tends to diminish trade and economic activity.  The depression in the 1930s was exacerbated by competitive currency devaluations as countries sought a way out of the slowdown without having to undertake any politically difficult structural adjustment.   Read more...


Saturn-Ketu revisited; Fed meeting on Wednesday

(29 July 2019) As the Federal Reserve prepares to meet Wednesday, the US stock market continues to defy gravity with the indexes at all-time highs.   It's a perfect storm for investors as corporate earnings are generally strong, money is pouring in from abroad, and now the Fed is widely expected to cut rates to make credit even cheaper. 

The "insurance rate cut" of either 25 or 50 basis points may have an immediately calming effect on markets, but by cutting now the Fed is gambling that lower rates can prevent a recession. If it's wrong and we end up in recession anyway, then there will be fewer tools left to kick start the economy.   That would increase the risk that this massive $244 Trillion global debt bubble may finally burst through depression, hyperinflation or war.   But everything is coming up roses for now as the promise of lower rates has lit a fire under stocks.    Read more...


It's Mueller time again; stocks pullback on Fed uncertainty

(22 July 2019) It's Mueller time once again.  Former FBI Director and Special Counsel Robert Mueller is due to testify to Congress on Wednesday.   Mueller will respond to lawmakers questions in the Justice and Intelligence Committees regarding his investigation of Russia's involvement in the US 2016 election.

This will be Mueller's first full public appearance since delivering his report back in April.  His report concluded that Russians did interfere with the elections but he took a more nuanced view of Trump's role.   While no bombshells were forthcoming, he did not exonerate the Trump campaign from illegality in deference to the constitution which holds that sitting presidents cannot be indicted. 

Mueller's testimony will likely determine if impeachment will go forward.  With time running out before the primary season begins in February 2020, the pro-impeachment Democrats are now up against it.  Read more...


Trump's racist tweetstorm unifies Democrats; US stocks at record highs

(15 July 2019) How low can Trump go?  After this past weekend's racist tweets against four minority Democratic congresswomen, it seems there is no floor.  Was there ever?  Previous dog-whistles to his white nationalist base may now be evolving into out-and-out racism as Trump looks for new ways to divide the country (and the Democratic party) and provoke chaos ahead of next year's election.  It may well be his only hope.

Trump's target was the Squad -- a group of four left-wing Democrats led by Alexandria Ocasio-Cortez who have strongly criticized Trump for his immigration policy and treatment of refugee claimants on the southern border.  Last week AOC, as she is known, delivered passionate testimony of the terrible conditions facing asylum-seekers in Texas border detention camps.  Just 29 years old and elected to Congress last year, she has become the face of the left progressive wing of the Democrats.   Read more...


Will Trump be re-elected in 2020? (First in a series)

(8 July 2019) The presidency of Donald Trump has been the most controversial and divisive in decades.  Trump's radical nationalist agenda is a clear break from the more outward-looking stance of previous US administrations.  His aggressive and unpredictable tendencies have created havoc on the world scene as allies have largely rejected his transactional approach to diplomacy and trade.  His presidency is historically unpopular as his support has never cracked the 50% level and now in Year 3 remains stuck in the mid to lower 40s. 

And yet with his GOP base seemingly as loyal to him as ever, there is still a decent chance that he could be re-elected in November 2020.  So what do the stars say?

Since we are still sixteen months away from the election, I wanted to address this question in a comprehensive way over a series of posts.   Read more...










 


lotus33