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. 

As I noted in last week's post, there is good reason to be more cautious about the stock market in the coming weeks.  The planetary influences are gradually shifting from a mostly bullish pattern to a more bearish pattern here in the month of December.  The very bullish alignment of Jupiter, Uranus and Chiron forms its closest angles in mid-December right around the time of the next Fed meeting on December 11, and this potentially pivotal trade deal deadline on December 15.  Once the alignment begins to separate, the risk of a market decline increases.

So there is a possibility of disappointment here right around the time of the trade deadline.  I am reluctant to make a firm prediction in that regard, although I do think that stocks will become more vulnerable around that time and in the days leading up to Christmas.  The second half of December will see bullish Jupiter weaken through its conjunction with Ketu (South Lunar Node) while bearish Saturn become more dominant as it approaches its conjunction with Pluto in January. 

If we look at the horoscope of China (1 October 1949), we can see some significant aspects around the time of the deadline. On the plus side, the Jupiter-Uranus-Chiron alignment will highlight the Ascendant at 8 Capricorn.  This augurs well for the country as a whole, although it may not be relevant for the trade deal specifically.  The triple conjunction of Saturn-Pluto-Venus is conjunct the natal Jupiter at 29 Sagittarius.  The Venus hints at positive and constructive developments, but the presence of Saturn in the mix is not good.  It may not be a deal-breaker, but it may undermine the sustainability of any deal.  Also, transiting Mars will be conjunct Venus, the planet of diplomacy and agreement so that is a clear negative factor.

Overall, these alignments suggests a major positive breakthrough is unlikely although some minor deal is still quite possible.  The negative Mars and Saturn influences here are significant, although they may pertain to some other area such as Hong Kong, rather than the US trade deal.   Nonetheless, the outlook looks worse in early 2020 as Saturn and Pluto will conjoin Jupiter more closely and then move on to hit the Ascendant.  A particularly nasty configuration occurs in early April when Saturn and Mars conjoin the Ascendant while Ketu conjoins the 12th house cusp.  It is hard to see the Chinese economy and stock market doing well with these sorts of transits in effect. 

This suggests that China's economy will continue to struggle in 2020 and that growth could slow further.  The constraining Saturn influence on Jupiter (growth) and the Ascendant (the nation as a whole) may well mean that China could slip into recession.  Of course, official GDP data still forecasts 6% growth in 2019 although most observers see this data as manipulated and inflated.  Other data point to more serious problems in the Chinese economy.   

Weekly Market Forecast

Stocks have started off the week with a decline on renewed trade jitters and some underwhelming US factory data.  The decline coincided with a close alignment of Mars (mostly bearish) with Rahu (sometimes bearish) and Venus (mostly bullish).  We could see more downside over the next couple of days as Mars will remain in close aspect with Rahu.  But the second half of the week looks more positive as the Moon first aligns with Jupiter on Thursday and then with the Sun on Friday.  Maybe this unstoppable rally in US stocks isn't done yet.

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