Apple warns as coronavirus hits China production; Mercury turns Rx

(17 February 2020) Maybe the other shoe has finally dropped.   Today, Apple warned that revenues would likely fall short in this quarter due to the impact of the coronavirus outbreak in China.  The outbreak has wreaked havoc on the Chinese economy as hundreds of millions of people are in full or partial lockdowns.   This has created interruptions in the complex supply chain for electronics such as the iPhone with both production and sales likely to take a major hit. 

Stock markets have generally rallied in February on the hope that the virus could be contained and that the forceful actions of the People's Bank of China would prevent a crash.  They have banned short selling and injected billions of the dollars into the system to keep liquidity flowing.  This has worked so far as China's market has bounced strongly off its Jan 31 low. 

But Apple's announcement today confirms that the economic impact has only begun to be felt.  More such announcements from large companies are likely coming soon as production has been severely interrupted in the world's second largest economy.

Interestingly, the announcement came just one day after Mercury, the planet of commerce and trade, turned retrograde.  Mercury's retrograde cycle lasts about three weeks and occurs about four times a year.  It is traditionally associated with miscommunication, breakdowns, foul-ups and frustration.  It tends to have a bearish reputation in terms of the stock market, although I have found the correlation is not that strong. 

However, I have found that the time around the "stations" are most important in terms of stocks.  Stocks can be more volatile and can rise or fall more sharply than normal during the 2-3 day period around each retrograde and direct station.  If Mercury forms a significant angle with a malefic planet like Mars or Saturn, a bearish outcome is more likely.  Retrograde periods can also indicate a temporary shift in prevailing sentiment. 

Futures are down modestly at the time of writing (10 p.m. EST Monday) so it looks like we could see a down day on Tuesday when US markets re-open after the long weekend.  Using the Apple horoscope, we can see why this week may be more negative than last week.  First, we can see that transiting Mercury Rx (18 Aquarius) does form a 45 degree angle with Saturn, a malefic planet. The angle is actually 46 degrees but that is still very close since 45 is one of the divisors of the 360-degree circle.  Mercury moves very slowly around the day of its station, so we should expect some down days this week in any event.


 

The other thing to note here is that the Apple chart is getting the full brunt of a nasty-looking Moon-Mars-Ketu conjunction on Tuesday.  This is a bearish influence which just happens to align with Apple's 12th house cusp representing loss and disappointment.  I suspect shareholders could be quite disappointed this week. 

But the stars aren't all bad.  Jupiter is in a near-exact 90-degree alignment with Neptune through the week so this is likely to generate at least some upside.  In fact, some of the gains we've already seen in February are partially related to this slow-moving alignment. 

In terms of the market as a whole, while the Mercury retrograde station is a negative influence this week, the Jupiter-Neptune alignment suggests it won't be a complete washout.   Wednesday's Moon-Jupiter conjunction looks somewhat more positive, for example, and Friday's Venus-Jupiter alignment also could give the bulls some fuel.  Thursday's Moon-Saturn conjunction is another potential danger zone, however.

Generally, I would think that Apple could have some difficulty resuming its usual upward climb here.  Ketu will remain fairly close to the 12th house cusp for the next couple of months so that may well bring more downside. 

The other thing to remember is that Apple is nearing the end of its Jupiter-Rahu dasha period.  This is usually a very bullish period in any chart and that has certainly been the case with Apple over the past two years.  But the Saturn-Saturn period is scheduled to begin on April 26 (using Krishnamurti ayanamsha -- perhaps a few weeks later in Lahiri) so that is another bearish influence for the longer term.  Dashas don't work like clockwork but they are important influences that can operate in the background.  The Saturn influence here will make further gains much more difficult in 2020 and we could easily see Apple undergo a significant correction. 

For more details and potential timing scenarios, check out my weekly subscriber newsletter which is published every Saturday afternoon (EST).   I outline the key technical and planetary influences for US and Indian stocks for the short and medium term, as well as currencies, gold and oil.






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