(Posted 7 July 2012)  No matter how skilled a politician he may be, this week’s poor jobs report has forced President Obama back on his heels.  Friday’s weak US employment report showed only 80,000 new jobs were created in June, far below the +200K from earlier in the year.  The unemployment rate remained unchanged at a stubbornly high 8.2%.   The disappointing performance gave more ammunition to Republican Mitt Romney as a sign that Obama’s interventionist Keynesian-style policies aren’t working.  Things are getting so bad that some US media outlets are now started to refer to the "zombie economy" which is effectively dead.  If that term gains traction, it would be very difficult for Obama to overcome the label and win in November.  While I am fairly pessimistic about the prospects for the economy, I do think Obama will prevail in the election.  That suggests there may be other factors involved in his victory over Romney.

There was more bad economic news as we had no less than three different attempts to stimulate the flagging global economy as central banks in China and Europe both cut their interest rates, while the Bank of England undertook a new round of quantitative easing.  Markets were less than enthused by these developments as the Dow fell almost 1% on the week closing at 12,772 while the S&P 500 finished at 1354.  Indian stocks fared better as investors anticipated an RBI rate cut later in the month.  The Sensex enjoyed modest gains closing at 17,521 while the Nifty ended the week at 5316.  While the week may have ended badly, stocks did make new highs along the way.  This positive result was in keeping with expectations as I thought that the midweek Venus and Mercury aspects would produce gains.

Clearly, the global economy remains as fragile as ever.  The sense of relief from the recent European bank bailout is fading fast as Spanish bond yields have crept back up to that critical 7% level.  The Euro is hitting new lows as it is trading below 1.23 against the US Dollar. China’s rate cut was the second in less than a month and signals a growing risk of recession.  All of this uncertainty does seem like an appropriate reflection of the dominant planetary aspects that are active at this time.  The Jupiter aspect to the Uranus-Pluto square offers some prospects for gains in the short term but this will be a fairly quick alignment which may not correspond with a major move higher in the stock market. At the same time, Saturn is soon to re-enter the sign of sidereal Libra.  These Saturn ingresses are usually bearish and this could easily offset whatever positive energy may result from Jupiter’s aspect.  As I see it, the more powerful Uranus-Pluto aspect undermines the possibility for any significant economic recovery any time soon.  This aspect just had its first exact aspect in June and will likely haunt the economy for the next two or three years.  We could see some solutions offered, but they are likely to be temporary.  Perhaps the US will follow in the footsteps of Japan and its "lost decades".  Like Japan after its stock market crash in 1990, the US is attempting to stimulate the economy through additional government spending.  While this will likely prevent a worst case depression scenario, growth may remain low for many years to come. 

This week looks like we could see more treading of water.  First off, there is a fairly nasty looking Mars aspect with Ketu, the south lunar node. This could manifest at any time in the first half of the week, although there is an argument to be made for Monday given the Moon’s opposition to Mars at that time.  However, Mercury will be in aspect with Venus in midweek and after so that seems likely to correspond with some upside.  Jupiter also moves one step closer to its aspect with Pluto and Uranus so that adds to the bullish side somewhat.  Friday’s session is more of a question mark since the Sun approaches its square aspect with bearish Saturn.  The aspect won’t be exact but it may still disrupt the mood.  Gold may also suffer at week’s end as a result of this Saturn influence on the Sun.

Transits for Monday 9 July 2012  9.30 a.m. New York