(7 September 2022) Following their August decline, stocks have traded mostly higher so far this week following the Labor Day holiday in the US.  Markets rebounded on Wednesday as plunging oil prices took the pressure off bond yields as borrowing costs fell.  The stock market needs lower yields if it is to have any hope of mounting a sustained recovery — a difficult task to be sure in this inflationary environment.

Of course, lower yields aren’t always good news, especially if they are falling because markets are worried about a recession.  That could well be the case here as slowing data out of China due to Covid lockdowns are forcing traders to re-evaluate their economic projections.  As long as China’s zero-Covid policy continues to randomly lockdown major cities for the foreseeable future, it will become harder for the world to avoid recession.

But it is unclear how long the rebound in stocks can last since Mercury is due to turn retrograde just before midnight Friday, September 9 (EDT).  Mercury retrograde has a deserved reputation as a bearish influence on the collective sentiment that drives the ups and downs of the stock market.  As the planet that governs trading and commerce, Mercury’s condition in the sky is one of the key determinants to stock market movements.  When Mercury is well-placed by sign and aspect, markets are likely to rise, at least for the short term.  But if Mercury is associated with malefic planets like Saturn or is retrograde, it becomes that much harder for markets to rise, especially around the 2-4 day window around its retrograde and direct stations when it is reversing its direction.

Of course, it is important to keep the influence Mercury retrograde in perspective.  While it is an important influence, there are other planets placements can also sometimes limit or offset its affliction.  And not all Mercury retrograde stations are created equal.  If Mercury is in hard aspect with malefics, then its retrograde and direct stations are likely to be very bearish indeed.  But if Mercury turns retrograde while in alignment with, say, Jupiter, then positive outcomes become more likely.

The Mercury retrograde station this Saturday looks fairly benign as these things go.  First off, the fact that it stations over the weekend while markets are closed means its negative impact will be mitigated.  We could see some bearish fallout to end the week, but this does not look overly strong.  Monday will therefore be the first trading day with Mercury retrograde and the aspects that day actually don’t look that bad.  And its close opposition with Jupiter is somewhat bullish.

While some bearishness must be assumed by virtue of Mercury’s apparent backward motion, there are no other strongly bearish influences upon Mercury to start the week.  Other planets are more bearish, however, such as the Sun-Saturn alignment and the Mars-Uranus alignment.  Moreover, the Mars square aspect to Venus is another bearish influence to be reckoned with, although it will be still three degrees from exact on Monday.  Overall, the start of next week is more likely to bring some downside even if retrograde Mercury is only part of the reason for it.