(4 March 2024) Stocks extended their winning streak last week as PCE inflation data came in near consensus estimates while Q4 GDP stayed strong at 3.2%. The S&P 500 gained 1% on the week to 5137 while the Nasdaq-100 added 2% to reach a new record high at 18,302. This bullish outcome was not unexpected as I thought the late week alignments of the Sun-Mercury-Jupiter and Venus-Chiron-Rahu would be bullish and could well offset any early week selling on the Mars-Jupiter square.
Last week’s macro data was more evidence for the soft or no landing scenario. Despite a recent uptick, inflation still seems to be under control, albeit at a level that is stubbornly above the Fed’s 2% target. Nonetheless, the 10-year yield edged lower last week to 4.19% and moved back into a potential sweet spot near 4% that reflects lower inflation against a backdrop of decent growth. While there are no signs yet of a second 1970s-style inflation spike, the Fed will be entirely within its rights to keep rates steady here as long as core inflation is above 2%. With Fed Chair Powell due to testify before Congress this week, the market will have another opportunity to gauge the Fed’s commitment to its 2% target. But even if inflation remains higher than the market would ideally like, the growth story is now providing most of the fuel for the rally. As long as the unemployment stays low, the threat of recession will continue to recede into the distance.
The planetary outlook is uncertain. The recent bullish trend is still very much intact as any short term bearish alignments involving Mars or Saturn tend to produce only modest dips which are then dutifully bought. While the source of all this bullish energy is still somewhat unclear, it seems that the ongoing Jupiter-Saturn alignment may still be exerting an influence on collective sentiment, even if this alignment has been separating since Feb 12. At least, subsequent gains have been more modest and still leave open the possibility that the rally may soon run out of gas. The month of March holds out some possibility for a pullback as Saturn forms alignments with Rahu and Chiron (36 degrees each; 360/10) as well as with Pluto (40 degrees; 360/9). Even if these alignments are less powerful due to their higher divisor, they nonetheless could coincide with an increase in volatility in the near term…
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This week (Mar 4-8) looks mixed with some downside risk. The early week looks more bearish in this respect as the Sun and Mars align with Rahu (North Lunar Node). Monday morning leans bearish on the Moon-Neptune square and makes a negative start to the week a bit more likely. Tuesday’s Moon-Jupiter alignment may be bullish, however, and could mitigate some of the bearish influence of the Sun-Mars-Rahu pattern. Wednesday is Day 1 of Powell’s testimony and could move markets. The Sun-Mars-Rahu alignment is at its closest on that day so that suggests a negative reaction is more likely…
