(1 April 2024) US stocks pushed higher yet again last week as strong GDP data provided more evidence for the soft landing scenario. The S&P 500 gained a modest 20 points to 5254 while the rate-sensitive Nasdaq-100 finished fractionally lower at 18,254. The NYSE Composite, the Dow Jones and the Russell 2000 all finished higher, however, as the emerging growth narrative drew more investors to a broader range of stocks. This bullish outcome was in keeping with expectations as I thought the multiple Venus alignments would likely coincide with some upside.
This run of strong economic data has effectively put all the talk of recession to rest. Whatever the inverted yield curve may have indicated in years past, there is little sign of a recession now. While the US economy isn’t exactly booming, it is growing steadily. The labor market looks reasonably robust here, even if a significant part of the hiring are government jobs as the Biden administration is priming the spending pumps ahead of the November election. While more Fed members are now saying that the Fed will hold off on cuts and keep rates higher for longer, this may be less decisive for markets that rely more broadly on liquidity. Even with a historically high Fed funds rate of 5.5%, financial conditions are loose as market participants anticipate the slowing of the Fed’s balance sheet tapering. If the Fed is set to reduce the amount of assets for sale, it will provide more monetary fuel to bid up risk assets such as stocks. The end of quantitative tightening (QT) could prove to be a tailwind for markets, even if interest rates stay elevated.
The planetary outlook is mixed. The up trend would seem to be playing out according to the approaching Jupiter-Uranus conjunction on April 19. This is a strongly bullish pairing which opens up the possibility of further gains into that date. While the strength of this conjunction is such that it may give bulls the default control of the market for the next three weeks, there is some downside risk before April 19 which would suggest at least some choppiness, if not a proper pullback. The key bearish alignment in this respect is the Mars-Saturn conjunction on Apr 10 which also happens to align with Rahu (North Lunar Node) in that same week. Bulls should therefore remain cautious in the first half of April just in case. We should also mention here the upcoming total solar eclipse on April 8 that will traverse the North American continent. While I am no expert on eclipses and their worldly impact, this particular eclipse does not look particularly ominous in terms of its aspects with other planets. For this reason, I would not expect anything out of the ordinary to occur on the eclipse day. The Mars-Saturn conjunction looks more important in any event and has nothing to do with the eclipse itself. If there is going to be a negative eclipse effect, it may not occur until May 25 when Mars transits over the eclipse point at 25 degrees of sidereal Pisces…
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This week (Apr 1-5) looks mixed. Some early week gains would not be surprising given the Mercury-Venus-Neptune alignment. Monday and Tuesday look like plausible candidates for gains although Mercury’s retrograde station on Tuesday complicates that outlook somewhat. While Mercury retrograde stations are often bearish immediately after their directional reversal (Tuesday, in this case), there is a chance that any negative fallout may be delayed until later in the week. Tuesday’s Moon-Jupiter-Uranus alignment could be bullish in this respect, especially at the open…
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