(21 April 2023)  Stocks fell again last week as fears of a wider war in the Middle East dimmed prospects of an interest rate cut.  The S&P 500 fell 3% on the week to 4967 while the Nasdaq-100 slumped 5% to 17,037.  The broader averages fared somewhat better as the NYSE Composite lost just 1% on the week.  This bearish outcome was very unexpected as I thought the influence of the Jupiter-Uranus conjunction would have coincided with some gains, especially later in the week.

The rally is finally taking a breather after the extended up trend following the October low.  While many investors hit the sell button on the prospect of an unpredictable Israeli-Iran conflict, inflation concerns may well still underpin geopolitical risks.  If the conflict escalates further, oil prices are certain to rise which will likely act as a catalyst for increases in other commodities, including gold and copper.  The picture is further complicated by a relentless rise in bond yields despite the uncertainty.  While Treasuries are usually seen as safe havens during risk-off environments, many investors are dumping their bonds as 10-year yields closed at a new short-term high of 4.63%.  The rise in yields is more evidence that inflation is now the core problem in financial markets as Fed rate cuts are being pushed out further into the future.  The rise in yields was one reason why the rate-sensitive tech sector suffered larger declines last week.  The outlook for bonds seems fairly bleak since this election year is likely to see even more government borrowing and thus an increase in supply of debt issuance.  While de-escalation in the Middle East would be welcomed by markets, bond yields may have to reverse lower before any stabilization is possible.

The planetary outlook leans bearish.  While last week’s sell-off was unexpected given the apparently bullish Jupiter-Uranus conjunction, the larger picture still looks bearish.  The progressions in the NASDAQ chart still look increasingly bearish as Mercury separates further from its bullish conjunction with Jupiter while Mars approaches its opposition with Saturn.  This bearish Mars-Saturn opposition is clearly manifesting now and could continue to exert a negative influence until May 7 when the opposition is exact.

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This week (Apr 22-26) has continued downside risk.  The early week has a chance for a bounce, however.  Venus will align with Jupiter and Uranus on Monday and Tuesday and could generate some buying…

At the same time, however, there is a bearish alignment of Mercury, Rahu and Saturn which will be within range for most of the week. This is likely to translate into one or more significant down days this week…